AN ACT Relating to industrial insurance; amending RCW 43.22.030, 48.32.020, 41.06.070, 51.12.020, 51.12.070, 51.14.010, 51.14.050, 51.14.100, 51.14.110, 51.16.035, 51.16.060, 51.16.105, 51.16.140, 51.24.030, 51.28.010, 51.28.020, 51.28.025, 51.28.030, 51.32.050, 51.32.055, 51.32.060, 51.32.080, 51.32.090, 51.32.110, 51.32.130, 51.32.190, 51.32.200, 51.36.020, 51.36.050, 51.36.060, 51.36.070, 51.36.080, 51.44.010, 51.44.070, 51.48.010, 51.48.015, 51.48.017, 51.48.020, 51.48.040, 51.48.050, 51.48.090, 51.48.110, 51.04.020, 51.04.030, 51.04.040, 51.04.070, 51.04.085, 51.08.013, 51.08.015, 51.12.050, 51.12.110, 51.12.120, 51.12.140, 51.16.120, 51.16.150, 51.24.050, 51.24.060, 51.24.070, 51.24.080, 51.24.090, 51.28.070, 51.32.010, 51.32.015, 51.32.030, 51.32.040, 51.32.073, 51.32.220, 51.32.230, 51.32.240, 51.36.010, 51.36.040, 51.44.040, 51.52.030, 51.52.050, 51.52.060, 51.52.070, 51.52.095, 51.52.110, 51.52.130, 51.52.150, and 51.16.042; adding new sections to chapter 48.14 RCW; adding a new section to chapter 48.19 RCW; adding new sections to chapter 51.08 RCW; adding a new section to chapter 51.14 RCW; adding new sections to chapter 51.16 RCW; adding new sections to chapter 51.32 RCW; adding new sections to chapter 51.44 RCW; adding a new chapter to Title 51 RCW; repealing RCW 51.08.175, 51.14.070, 51.16.100, 51.16.110, 51.16.130, 51.32.095, 51.32.210, 51.44.020, 51.44.030, 51.44.050, 51.44.060, 51.44.080, 51.44.090, 51.44.100, 51.44.110, 51.44.140, 51.44.150, 51.44.160, 51.04.100, 51.16.090, 51.16.155, 51.16.160, 51.16.170, 51.16.180, 51.16.190, 51.48.120, 51.48.130, 51.48.140, 51.48.150, and 51.04.090; providing effective dates; prescribing penalties; and declaring an emergency.

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

NEW SECTION. Sec. 1. A new section is added to chapter 51.08 RCW to read as follows:

"Compensation" means all monetary benefits and medical and related benefits provided under this title.

NEW SECTION. Sec. 2. A new section is added to chapter 51.08 RCW to read as follows:

"Insurer" means (1) the state fund as defined in section 9 of this act, (2) any private company, corporation, mutual association, reciprocal or inter-insurance exchange authorized under the laws of this state to insure against liability for workers' compensation, (3) any employer or group of employers to whom a certificate of qualification to self-insure has been issued, or (4) any combination of the first three definitions where the context in which the word "insurer" is used would so indicate.

NEW SECTION. Sec. 3. A new section is added to chapter 51.08 RCW to read as follows:

"Manager" means the manager of the state fund as defined in section 9 of this act.

NEW SECTION. Sec. 4. A new section is added to chapter 51.08 RCW to read as follows:

"Spendable monthly earnings," at the time of injury or at any other relevant time, means the worker's monthly wages determined pursuant to the processes outlined in RCW 51.08.178, minus the deductions for federal income and social security taxes that the worker would have deducted if he or she were to receive his or her monthly wages for a year and if he or she were to take the maximum number of exemptions for dependency, blindness, and old age to which he or she is entitled for federal income tax purposes. The director shall annually prepare and publish charts which shall be used to calculate a worker's spendable monthly earnings on the basis of his or her monthly wages and of his or her number of exemptions. The joint committee on workers' compensation shall consider the impact of inflation on injured workers' benefits biennially. An assessment of the impact of increasing the amount of spendable monthly earnings as defined for each worker shall be conducted.

NEW SECTION. Sec. 5. A new section is added to chapter 51.16 RCW to read as follows:

(1) Any general casualty insurer holding a certificate of authority issued by the insurance commissioner under chapter 48.05 RCW and specifically qualified under RCW 48.11.070, and any self-insured group holding a certificate of qualification issued by the insurance commissioner under section 29 of this act, and which insurer or self-insured group is also certified by the director to have demonstrated the capacity to provide to Washington employers adequate safety engineering, loss prevention, and claims management services, is authorized to insure the general provisions of this title concerning the respective rights and obligations of workers and their employers. Obtaining of insurance from such insurer shall be deemed to fulfill the compliance required of employers to secure the payment of compensation under this title.

(2) If the director has reason to believe that any insurer has not provided Washington employers with adequate safety engineering, loss prevention, or claims management services, the insurer may be required to report to the director its activity in these areas. Upon receipt of such report, or if the report is not submitted as directed, the director may begin proceedings pursuant to section 8 of this act.

(3) In order to qualify and to hold certification by the director under subsection (1) of this section, the insurer shall in addition maintain a location within the state where application for compensation may be made and maintain with the director a list of all locations and telephone numbers where application for compensation may be made and information may be obtained about all matters relating to any claim.

NEW SECTION. Sec. 6. A new section is added to chapter 51.16 RCW to read as follows:

Every insurer, except self-insurers, transacting workers' compensation insurance under this title shall hold a certificate of authority issued by the insurance commissioner under chapter 48.05 RCW, and shall maintain such security of the kind described in RCW 48.13.040 and 48.13.050, as may be required, except that no certificate of authority shall be issued to, or exist with respect to, the "state fund" as defined in section 9 of this act.

NEW SECTION. Sec. 7. A new section is added to chapter 48.19 RCW to read as follows:

(1) For purposes of this section, the term "insurer" shall include an insurer authorized to transact workers' compensation insurance in this state and the state workers' compensation fund established in section 9 of this act, but shall not include any employer or group of employers to whom a certificate of qualification to self-insure has been issued. The provisions of this chapter shall apply to workers' compensation insurance: PROVIDED, HOWEVER, That for purposes of this chapter only, workers' compensation insurance shall not be classified as casualty insurance. Where provisions of this section conflict with other provisions of this chapter, the provisions of this section shall control.

(2) Every such insurer shall be a member of a workers' compensation insurance rating organization licensed by the commissioner and shall adhere to its manual of classifications and rules, policy forms, and statistical plans. Such rating organization shall use combined experience determined by the commissioner to be reasonably adequate for rate-making purposes.

(3) The commissioner shall promulgate a uniform statistical plan which shall thereafter be used by each such insurer in the recording and reporting of its loss and expense experience, in order that the experience of all such insurers may be made available at least annually in such form and detail as may be necessary to aid the commissioner in determining whether rates comply with the applicable standards of this chapter.

(4) Such rating organization shall file rating plans and manual rates according to risk classification with the insurance commissioner for approval on behalf and in lieu of its members and each member thereof shall determine premiums according to the rating plans and rates approved by the insurance commissioner for each risk classification.

(5) Notwithstanding subsection (4) of this section, an insurer may make written application to the commissioner for approval of a deviation from the filed manual rates applicable to the insurer.

(6) The provisions of subsections (2), (3), (4), and (5) of this section shall expire and have no effect, unless specifically extended by law, three years after the effective date of this act.

(7) Nothing in this chapter shall be construed to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by such insurers to their policyholders, members, or subscribers. A plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers shall not be deemed a rating plan or system.

NEW SECTION. Sec. 8. A new section is added to chapter 51.16 RCW to read as follows:

If the director finds, after due notice and hearing at which the insurer shall be entitled to be heard and present evidence, that such insurer has failed to provide safety engineering or loss prevention services with such frequency as to indicate a general business practice, or to comply with its other obligations under this title, the director may suspend or revoke the certification he or she has granted to the insurer under section 5 of this act. Such suspension or revocation shall not affect the liability of such insurer under policies providing coverage prior to the suspension or revocation.

Upon the petition of any employee union or association having a substantial number of employees in the employ of the insured employer the director shall hold a hearing to determine whether or not there are grounds for the withdrawal of certification of an insurer. He shall serve upon the insurer and upon any employee union or association having a substantial number of employees in the employ of said insurer, personally or by certified mail, a notice of intention to withdraw, or not to withdraw, certification of the insurer, which notice shall describe the nature and location or locations of the plants or operations involved, and the specific nature of the reasons for his decision. If the decision is to withdraw certification, it shall include the period of time within which the ground or grounds therefor existed or arose; a directive to the insurer specifying the manner in which the grounds may be eliminated; and the date, not less than thirty days after the insurer's receipt of the notice, when the certification shall be withdrawn in the absence of a satisfactory elimination of the grounds for withdrawal of the certificate.

An appeal of such notice of intention to withdraw, or not to withdraw, certification of an insurer may be taken by the insurer, or by any employee union or association having a substantial number of employees in the employ of said insurer. Proceedings on such appeal shall be as prescribed in this title. Appeal by an insurer of notice of intention to withdraw certification shall not act as a stay of the withdrawal, unless the board, or court, for good cause shown, orders otherwise.

The director may take any action deemed necessary, including imposing fines, to encourage compliance with the requirements of this title.

NEW SECTION. Sec. 9. (1) There shall be established a state workers' compensation fund, hereinafter in this title called the "state fund," for the purpose of transacting workers' compensation insurance and for the legal and administrative expenses arising out of claims made by workers or their dependents for liability fixed by the workers' compensation laws of the state of Washington pursuant to coverage obtained from said state fund by employers.

(2) The state fund may also insure or refuse to insure any other liability that the employer who has secured coverage under this title with the state fund may have to his or her workers for bodily injury arising out of and in the course of employment as fully as any other insurer, including any liability the employer may have under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. Sec. 901 to 950, or any act amendatory or supplementary thereto or in lieu thereof, and may enter into any contract or obligation relating to the transaction of its business which is permitted by law.

(3) The functions of the state fund shall be:

(a) To confer with and solicit employers and to handle, audit, and enforce collection of premiums, assessments, and fees of employers insured with it;

(b) To receive, handle, and process the claims of workers and beneficiaries of workers injured in the employ of employers insured with it and to issue warrants for the payment of its obligations; and

(c) To perform all other functions which the laws of this state authorize or which are necessary or appropriate to carry out the functions authorized, including the securing of reinsurance of any risk insured by the state fund.

(4) The state fund in its own name may sue and be sued in all actions arising out of any act or omission in connection with its business affairs, and shall be entitled to appear as a party in any proceedings involving claims payable by the fund under this title.

(5) The attorney general shall be the legal advisor of the state fund and shall represent it in all legal proceedings. Any employer may also join in any legal proceedings arising from claims for which the employer has secured coverage from the state fund.

NEW SECTION. Sec. 10. The state fund shall be under the direct supervision of a manager appointed by the governor, upon the advice and consent of the senate, for a term of four years or until a successor is appointed and qualified. The initial term of office of the manager shall commence on the effective date of this act, and the salary of the manager shall be fixed by the governor in accordance with the provisions of RCW 43.03.040. The manager's entire time shall be devoted to the duties of manager and the manager shall pursue no other calling or vocation while in that office. The manager shall execute a bond payable to the state of Washington in the sum of fifty thousand dollars, or such greater amount as may be determined from time to time by the governor, for the faithful discharge of the duties of the office, such bond to be at the expense of the state fund. The manager may be removed from the office in accordance with chapter 43.06 RCW.

NEW SECTION. Sec. 11. The manager shall manage the state fund and shall have such powers as are necessary to carry out its functions, and shall report annually to the governor not later than December 15th concerning the operations of the state fund for the preceding fiscal year.

The manager shall make an annual report to the insurance commissioner of the business done by the state fund and a statement of the fund's resources and liabilities.

The manager of the state fund shall appoint all employees of the state fund and fix their duties.

NEW SECTION. Sec. 12. No employer insured with the state fund administered by the department of labor and industries on the effective date of this act shall secure payment of compensation with any casualty insurer or self-insured group unless such insurer or group has been certified, pursuant to requirements of this title, by the director to have demonstrated the capacity to provide to Washington employers adequate safety engineering, loss prevention, and claims management services.

NEW SECTION. Sec. 13. The assets and liabilities of the following funds are transferred on the effective date of this act to the state fund:

(1) The accident fund previously maintained under RCW 51.44.010 before the effective date of this act;

(2) The medical aid fund previously maintained under RCW 51.44.020 before the effective date of this act;

(3) The reserve fund previously maintained under RCW 51.44.030 before the effective date of this act, except that portion attributable to self-insurers pursuant to RCW 51.44.140 before the effective date of this act. Such self-insurer accounts shall be transferred into separate accounts of the workers' compensation administrative fund created by section 57 of this act, and payments from that fund by the department shall be made in the same manner as previously done from the self-insurer accounts within the reserve fund; and

(4) All other assets and liabilities held on the effective date of this act, except the supplemental pension fund and any other funds pertaining to the regulatory functions of the department, by the industrial insurance division of the department under Title 51 RCW.

NEW SECTION. Sec. 14. (1) All employers required to pay industrial insurance and medical aid premiums to the industrial insurance division of the department of labor and industries under Title 51 RCW on the effective date of this act shall become insureds of the state fund until and unless: (a) Any of these employers elect to otherwise secure the payment of compensation under this title, so long as the employer has given ninety days' prior written notice of termination to the state fund and has furnished evidence satisfactory to the director that the payment of compensation has otherwise been secured, or (b) the employer receives notice from the manager of the termination or nonrenewal of insurance.

(2) All liability existing under the law in effect prior to the effective date of this act for employers paying premiums to the industrial insurance division of the department of labor and industries under Title 51 RCW is transferred on the effective date of this act to the state fund, together with liability for all expenses, claim costs, administrative costs, and all other obligations arising out of the operation of the division and in existence on the effective date of this act.

(3) The powers, duties, and functions of the industrial insurance division relating to insurance coverage, actuarial computations, claims management, premium collection, accounting, and all other powers necessary to administer the state fund as an insurer, which are not otherwise transferred by this chapter, are vested in the state fund as of the effective date of this act.

NEW SECTION. Sec. 15. The state of Washington shall not be liable beyond the assets of the state fund for any obligations of the state fund. The state fund shall operate on a parity with other workers' compensation insurers. It is the intent of the legislature that the state fund, notwithstanding any statute to the contrary, shall have complete authority to invest and reinvest its funds in excess of the amount deemed sufficient to meet current expenditures, to acquire any equipment, supplies, or other personal or real property and employ such personnel as may reasonably be necessary to solicit workers' compensation insurance business, take all actions to enable it to be fully competitive, and shall be self-supporting. Furthermore, and notwithstanding any other provision of law, the state fund shall not be required to comply with chapter 43.105 RCW relating to the data processing authority, chapter 43.78 RCW relating to printing, or chapter 43.19 RCW relating to purchasing supplies or equipment and other purchasing restrictions, but shall not be prohibited from complying with such statutes. Loss and expense shall be ascertained annually. Dividends or credits may be made if it is shown that there exists an excess of assets over liabilities, necessary reserves, and a reasonable surplus for the catastrophe hazard. The state fund shall be subject to the same regulation and disclosure as all other insurers providing insurance under this title.

All moneys received by and under the supervision and control of the state fund shall be deposited therein. Disbursements from the state fund, for all the administrative costs of operation of the fund and for payment of all claims obligations, shall be on authorization of the manager or a duly authorized representative of the manager. The state fund shall not be subject to appropriation by the legislature, but shall be subject to audit by the state auditor annually or at such other times as the state auditor shall deem appropriate.

NEW SECTION. Sec. 16. The accident experience records and related data of the state fund, for periods before the effective date of this act, shall be available to a rating organization licensed under section 7 of this act, at the actual cost of reproduction and delivery, to assist in making workers' compensation rates.

NEW SECTION. Sec. 17. A new section is added to chapter 51.16 RCW to read as follows:

(1) Every insurer other than a self-insurer shall issue a policy or contract of insurance in writing which specifies its provisions, insuring agreements, and exclusions. Such policy or contract shall be made subject to this title and any rules adopted pursuant to this title. Any provisions of such policy or contract inconsistent with this title are deemed to be reformed to conform with this title.

(2) Any insurer insuring the liability of an employer under this title shall be the insurer of all the employees of the employer within the protection of this title.

(3) For the purposes of this title, as between the employee and the insurer, notice or knowledge of the injury to the employer shall be notice or knowledge to the insurer; jurisdiction over the employer shall be jurisdiction over the insurer; and the insurer shall be bound by and subject to any findings, judgments of fact, conclusions of law, awards, decrees, orders, or decisions rendered against the employer in the same manner and to the same extent as the employer.

(4) Every policy or contract of insurance issued under this title shall contain a provision which provides for the requirements of subsection (3) of this section and a provision that insolvency or bankruptcy of the employer or his estate, or discharge therein, or any default of the employer shall not relieve the insurer from liability for compensation resulting from any injury otherwise covered under the policy with the insurer.

(5) The insurer shall be directly liable to any claimant, which liability may be enforced by such claimant against both the insurer and the employer, jointly and severally.

(6) As between any claimant and the insurer, no defense based on any act or omission of the insured employer may be raised by the insurer.

(7) No statement in an employer's application for a policy of workers' compensation insurance shall void such policy as between insurer and employer unless such statement shall be false and would materially have affected the acceptance of the risk if known by the insurer: PROVIDED, That in no case shall the invalidation of such policy as between the insurer and employer affect the insurer's obligation to provide compensation to claimants arising before the cancellation of such policy. In the event the insurer is required under this subsection to provide compensation under an invalid policy, the insurer shall be subrogated to the claimant's rights against the employer.

(8) No insurer shall terminate a policy or contract of insurance for payment of compensation by nonrenewal until at least thirty days after the employer has been notified in writing of such action. Such notification shall contain the justification for the action and a clear statement that payment of compensation must be secured pursuant to this title. The notice shall also inform the employer of options available for securing payment of compensation, including the assigned risk program.

(9) Upon receipt of written notice of nonrenewal the employer shall report such receipt to the director.

NEW SECTION. Sec. 18. A new section is added to chapter 51.16 RCW to read as follows:

Whenever compensation due under this title is not paid because of an uncorrected default, such compensation shall be paid as follows:

(1) Where such default is the result of the failure of an employer to secure the payment of compensation due under this title, compensation shall be paid by the director from the workers' compensation administrative fund. Such defaulting employer shall be liable for payment into the workers' compensation administrative fund the amounts paid therefrom by the director. For the purpose of enforcing this liability, the director, for the benefit of the administrative fund, shall be subrogated to all of the rights of the person receiving such compensation;

(2) Where such default is the failure of a self-insurer or a self-insured group to make compensation payments, compensation shall be paid by the director from the workers' compensation administrative fund only after the moneys available from the bonds or other security provided under the requirements of this title have been exhausted. Such defaulting self-insurer or self-insured group shall be liable for payment into the administrative fund the amounts paid therefrom by the director. For the purpose of enforcing this liability, the director, for the benefit of the administrative fund, shall be subrogated to all of the rights of the person receiving such compensation;

(3) Where such default is the failure of an insolvent insurer, as defined in RCW 48.32.030, to make compensation payments, compensation shall be paid by the director from the workers' compensation administrative fund. The Washington Insurance Guaranty Association, created in RCW 48.32.040, shall be liable for payment into the administrative fund the amounts paid therefrom by the director in lieu of paying any such amounts or compensation directly to the claimant.

(4) In cases other than those involving insurer insolvency where compensation is not timely paid or where the payment of compensation is delayed as a result of a dispute as to which insurer is responsible for the payment of compensation, such payments shall be made from the workers' compensation administrative fund and the director shall have the right of recovery from the party or parties ultimately deemed responsible.

Sec. 19. Section 43.22.030, chapter 8, Laws of 1965 and RCW 43.22.030 are each amended to read as follows:

The director of labor and industries, through the division of industrial insurance, shall((:

~~(1)~~)) exercise all the powers and perform all the duties prescribed by law with respect to the administration of ((~~workmen's~~)) the workers' compensation ((~~and medical aid~~)) law in this state((;

(2) Have the custody of all property acquired by the state at execution sales upon judgments obtained for delinquent industrial insurance premiums or medical aid contributions, and penalties and costs; sell and dispose of the same at private sales for the sale purchase price, and pay the proceeds into the state treasury to the credit of the accident fund, or medical aid fund, as the case may be. In case of the sale of real estate the director shall execute the deed in the name of the state)) and the implementation of such law and regulations thereunder so as to achieve the expressed legislative purposes and goals of such law.

Sec. 20. Section 2, chapter 265, Laws of 1971 ex. sess. as amended by section 2, chapter 109, Laws of 1975-'76 2nd ex. sess. and RCW 48.32.020 are each amended to read as follows:

This chapter shall apply to all kinds of direct insurance, except life, title, surety, disability, credit, mortgage guaranty, ((~~workmen's compensation~~)) and ocean marine insurance. This chapter shall not apply to an obligation of, nor create a duty in, a self-insurer, a self-insured group created pursuant to section 29 of this 1985 act, or the state fund, as defined in section 9 of this 1985 act, for purposes of covering workers' compensation.

NEW SECTION. Sec. 21. A new section is added to chapter 51.16 RCW to read as follows:

(1) The insurance commissioner, after consultation with the state fund and all insurers, other than self-insurers, with a certificate of authority pursuant to section 5 of this act, shall provide or approve a plan for the equitable apportionment of risk posed by any employer required by this title to provide workers' compensation coverage where such employer is unable in good faith to procure such coverage from the state fund, or any insurer with such certificate of authority. The state fund and appropriate insurers shall participate in the profits and losses of the plan. The plan shall act only as an insurer of last resort and set premiums commensurate with the risk.

(2) Any applicant for any assigned risk policy and any insurer affected thereby may appeal to the insurance commissioner from any ruling or decision of the manager or committee designated to operate such plan.

(3) If any insurer issuing workers' compensation policies under this title refuses to accept its equitable apportionment under such plan, the insurance commissioner shall revoke the insurer's certificate of authority.

Sec. 22. Section 1, chapter 11, Laws of 1972 ex. sess. as last amended by section 2, chapter 210, Laws of 1984 and RCW 41.06.070 are each amended to read as follows:

The provisions of this chapter do not apply to:

(1) The members of the legislature or to any employee of, or position in, the legislative branch of the state government including members, officers, and employees of the legislative council, legislative budget committee, statute law committee, and any interim committee of the legislature;

(2) The justices of the supreme court, judges of the court of appeals, judges of the superior courts or of the inferior courts, or to any employee of, or position in the judicial branch of state government;

(3) Officers, academic personnel, and employees of state institutions of higher education, the state board for community college education, and the higher education personnel board;

(4) The officers of the Washington state patrol;

(5) Elective officers of the state;

(6) The chief executive officer of each agency;

(7) In the departments of employment security, fisheries, social and health services, the director and his confidential secretary; in all other departments, the executive head of which is an individual appointed by the governor, the director, his confidential secretary, and his statutory assistant directors;

(8) In the case of a multimember board, commission, or committee, whether the members thereof are elected, appointed by the governor or other authority, serve ex officio, or are otherwise chosen:

(a) All members of such boards, commissions, or committees;

(b) If the members of the board, commission, or committee serve on a part time basis and there is a statutory executive officer: (i) The secretary of the board, commission, or committee; (ii) the chief executive officer of the board, commission, or committee; and (iii) the confidential secretary of the chief executive officer of the board, commission, or committee;

(c) If the members of the board, commission, or committee serve on a full time basis: (i) The chief executive officer or administrative officer as designated by the board, commission, or committee; and (ii) a confidential secretary to the chairman of the board, commission, or committee;

(d) If all members of the board, commission, or committee serve ex officio: (i) The chief executive officer; and (ii) the confidential secretary of such chief executive officer;

(9) The confidential secretaries and administrative assistants in the immediate offices of the elective officers of the state;

(10) Assistant attorneys general;

(11) Commissioned and enlisted personnel in the military service of the state;

(12) Inmate, student, part time, or temporary employees, and part time professional consultants, as defined by the state personnel board or the board having jurisdiction;

(13) The public printer or to any employees of or positions in the state printing plant;

(14) Officers and employees of the Washington state fruit commission;

(15) Officers and employees of the Washington state apple advertising commission;

(16) Officers and employees of the Washington state dairy products commission;

(17) Officers and employees of the Washington tree fruit research commission;

(18) Officers and employees of the Washington state beef commission;

(19) Officers and employees of any commission formed under the provisions of chapter 191, Laws of 1955, and chapter 15.66 RCW;

(20) Officers and employees of the state wheat commission formed under the provisions of chapter 87, Laws of 1961 (chapter 15.63 RCW);

(21) Officers and employees of agricultural commissions formed under the provisions of chapter 256, Laws of 1961 (chapter 15.65 RCW);

(22) Officers and employees of the nonprofit corporation formed under chapter 67.40 RCW;

(23) Liquor vendors appointed by the Washington state liquor control board pursuant to RCW 66.08.050: PROVIDED, HOWEVER, That rules and regulations adopted by the state personnel board pursuant to RCW 41.06.150 regarding the basis for, and procedures to be followed for, the dismissal, suspension, or demotion of an employee, and appeals therefrom shall be fully applicable to liquor vendors except those part time agency vendors employed by the liquor control board when, in addition to the sale of liquor for the state, they sell goods, wares, merchandise, or services as a self-sustaining private retail business;

(24) Executive assistants for personnel administration and labor relations in all state agencies employing such executive assistants including but not limited to all departments, offices, commissions, committees, boards, or other bodies subject to the provisions of this chapter and this subsection shall prevail over any provision of law inconsistent herewith unless specific exception is made in such law;

(25) All employees of the marine employees' commission;

(26) The manager of the state workers' compensation fund, the manager's confidential secretary, and to as many as six assistants designated by the manager;

(27) In addition to the exemptions specifically provided by this chapter, the state personnel board may provide for further exemptions pursuant to the following procedures. The governor or other appropriate elected official may submit requests for exemption to the personnel board stating the reasons for requesting such exemptions. The personnel board shall hold a public hearing, after proper notice, on requests submitted pursuant to this subsection. If the board determines that the position for which exemption is requested is one involving substantial responsibility for the formulation of basic agency or executive policy or one involving directing and controlling program operations of an agency or a major administrative division thereof, the personnel board shall grant the request and such determination shall be final. The total number of additional exemptions permitted under this subsection shall not exceed one hundred seventy-five for those agencies not directly under the authority of any elected public official other than the governor, and shall not exceed a total of twenty-five for all agencies under the authority of elected public officials other than the governor. The state personnel board shall report to each regular session of the legislature during an odd-numbered year all exemptions granted pursuant to the provisions of this subsection, together with the reasons for such exemptions.

The salary and fringe benefits of all positions presently or hereafter exempted except for the chief executive officer of each agency, full time members of boards and commissions, administrative assistants and confidential secretaries in the immediate office of an elected state official, and the personnel listed in subsections (10) through (22) of this section, shall be determined by the state personnel board.

Any person holding a classified position subject to the provisions of this chapter shall, when and if such position is subsequently exempted from the application of this chapter, be afforded the following rights: If such person previously held permanent status in another classified position, such person shall have a right of reversion to the highest class of position previously held, or to a position of similar nature and salary.

Any classified employee having civil service status in a classified position who accepts an appointment in an exempt position shall have the right of reversion to the highest class of position previously held, or to a position of similar nature and salary, within four years from the date of appointment to the exempt position. However, (a) upon the prior request of the appointing authority of the exempt position, the personnel board may approve one extension of no more than four years; and (b) if an appointment was accepted prior to July 10, 1982, then the four-year period shall begin on July 10, 1982.

Sec. 23. Section 51.12.020, chapter 23, Laws of 1961 as last amended by section 1, chapter 252, Laws of 1983 and RCW 51.12.020 are each amended to read as follows:

The following are the only employments which shall not be included within the mandatory coverage of this title:

(1) Any person employed as a domestic servant in a private home by an employer who ((~~has less than two~~)) does not have one employee((s)) regularly employed forty or more hours a week in such employment.

(2) Any person employed to do gardening, maintenance, repair, remodeling, or similar work in or about the private home of the employer.

(3) A person whose employment is not in the course of the trade, business, or profession of his or her employer and is not in or about the private home of the employer.

(4) Any person performing services in return for aid or sustenance only, received from any religious or charitable organization.

(5) Sole proprietors or partners: PROVIDED, That after July 26, 1981, sole proprietors or partners who for the first time register under chapter 18.27 RCW or become licensed for the first time under chapter 19.28 RCW shall be included under the mandatory coverage provisions of this title subject to the provisions of RCW 51.32.030. These persons may elect to withdraw from coverage under RCW 51.12.115.

(6) Any employee, not regularly and continuously employed by the employer in agricultural labor, whose cash remuneration paid by or due from any one employer in that calendar year for agricultural labor is less than one hundred fifty dollars. Employees not regularly and continuously employed in agricultural labor by any one employer but who are employed in agricultural labor on a seasonal basis shall come under the coverage of this title only when their cash remuneration paid or due in that calendar year exceeds one hundred fifty dollars but only as of the occurrence of that event and only as to their work for that employer.

(7) Any child under eighteen years of age employed by ((~~his~~)) the child's parent or parents in agricultural activities on the family farm.

(8) Jockeys while participating in or preparing horses for race meets licensed by the Washington horse racing commission pursuant to chapter 67.16 RCW.

(9) Any executive officer elected and empowered in accordance with the articles of incorporation or bylaws of a corporation who at all times during the period involved is also a director and shareholder of the corporation. Any officer who was considered by the department to be covered on and after June 30, 1977, shall continue to be covered until such time as the officer voluntarily elects to withdraw from coverage in the manner provided by RCW 51.12.110. However, any corporation may elect to cover such officers who are in fact employees of the corporation in the manner provided by RCW 51.12.110.

(10) Services rendered by a musician or entertainer under a contract with a purchaser of the services, for a specific engagement or engagements when such musician or entertainer performs no other duties for the purchaser and is not regularly and continuously employed by the purchaser. A purchaser does not include the leader of a group or recognized entity who employs other than on a casual basis musicians or entertainers.

Sec. 24. Section 51.12.070, chapter 23, Laws of 1961 as last amended by section 4, chapter 128, Laws of 1981 and RCW 51.12.070 are each amended to read as follows:

The provisions of this title shall apply to all work done by contract; the person, firm, or corporation who lets a contract for such work shall be responsible primarily and directly for all premiums upon the work. The contractor and any subcontractor shall be subject to the provisions of this title and the person, firm, or corporation letting the contract shall be entitled to collect from the contractor the full amount payable in premiums and the contractor in turn shall be entitled to collect from the subcontractor his proportionate amount of the payment.

For the purposes of this section, a contractor registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW shall not be responsible for any premiums upon the work of any subcontractor if:

(1) The subcontractor is currently engaging in a business which is registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW;

(2) The subcontractor has a principal place of business which would be eligible for a business deduction for internal revenue service tax purposes other than that furnished by the contractor for which the business has contracted to furnish services;

(3) The subcontractor maintains a separate set of books or records that reflect all items of income and expenses of the business; and

(4) The subcontractor has contracted to perform:

(a) The work of a contractor as defined in RCW 18.27.010; or

(b) The work of installing wires or equipment to convey electric current or installing apparatus to be operated by such current as it pertains to the electrical industry as described in chapter 19.28 RCW.

It shall be unlawful for any county, city, or town to issue a construction building permit to any person who has not submitted to the ((~~department an estimate of payroll and paid premium thereon as provided by chapter 51.16 RCW of this title or~~)) director proof that such person has qualified as a self-insurer or has otherwise secured the payment of compensation under this title.

Sec. 25. Section 26, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.010 are each amended to read as follows:

Every employer under this title shall secure the payment of compensation under this title by:

(1) Insuring and keeping insured the payment of such ((~~benefits~~)) compensation with the state fund; or

(2) Qualifying as a self-insurer or as a member of a self-insured group under this title; or

(3) Insuring and keeping insured the payment of such compensation with any private insurer authorized to transact workers' compensation insurance in this state.

Sec. 26. Section 30, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.050 are each amended to read as follows:

(1) Any employer may at any time terminate his status as a self-insurer by giving the director written notice stating when, not less than thirty days thereafter, such termination shall be effective, provided such termination shall not be effective until the employer either shall have ceased to be an employer or shall have filed with the director ((~~for state industrial insurance coverage~~)) proof that he or she has secured the payment of compensation under this title.

(2) An employer who ceases to be a self-insurer, and who so files with the director, must maintain money, securities or surety bonds deemed sufficient in the director's discretion to cover the entire liability of such employer for injuries or occupational diseases to his employees which occurred during the period of self-insurance((: PROVIDED, That the director may agree for the medical aid and accident funds to assume the obligation of such claims, in whole or in part, and shall adjust the employer's premium rate to provide for the payment of such obligations on behalf of the employer)).

Sec. 27. Section 34, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.100 are each amended to read as follows:

(1) Every employer subject to the provisions of this title shall post and keep posted in a conspicuous place or places in and about his place or places of business a reasonable number of typewritten or printed notices of compliance substantially identical to a form prescribed by the director, stating that such employer is subject to the provisions of this title. Such notice shall advise whether the employer is self-insured or has ((~~insured with the department~~)) otherwise secured the payment of compensation, and shall designate a person or persons on the premises to whom report of ((~~injury~~)) accident or occupational disease shall be made and the name, telephone number, and exact location within the state where application for compensation should be made.

(2) Any employer who has failed to ((~~open an account with the department~~)) insure the payment of compensation or qualify as a self-insurer shall not post or permit to be posted on or about his or her place of business or premises any notice of compliance with this title and any wilful violation of this subsection by any officer or supervisory employee of an employer shall be a misdemeanor.

Sec. 28. Section 35, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.110 are each amended to read as follows:

Every ((~~self-insurer~~)) insurer shall maintain a record of all payments of compensation made under this title. The ((~~self-insurer~~)) insurer shall furnish to the director ((~~all~~)) any information he has in his possession as to any disputed claim, upon forms approved by the director.

NEW SECTION. Sec. 29. A new section is added to chapter 51.14 RCW to read as follows:

(1) The insurance commissioner may, under such rules as he may prescribe, issue a certificate of qualification to an organization or association of private employers as a self-insured group if such organization or association complies with the following conditions:

(a) The organization was formed for a purpose other than that of providing self-insured workers' compensation coverage;

(b) The occupations of the employers in the organization are substantially similar, taking into consideration the nature of the services being performed by workers of such employers;

(c) The employers who insure with the group shall constitute at least forty percent of the total number of employers in the organization;

(d) The organization satisfies all other requirements in this chapter which apply to an individual employer seeking qualification as a self-insurer; and

(e) The organization has filed and maintained an indemnity agreement jointly and severally binding the organization and each current member thereof to comply with the provisions of this title.

(2) The insurance commissioner may, under such rules as he may prescribe, issue a certificate of authority as a self-insured group to a combination of two or more public employers who are engaged in essentially similar public activities, including combinations of state agencies, counties, municipal corporations, or other taxing districts or political subdivisions, or to any associations of public employers who are engaged in essentially similar public activities, if such combination or association satisfies all other requirements in this chapter which apply to an individual employer seeking qualification as a self-insurer.

(3) Any organization or association or combination of employers certified as a self-insured group under subsection (1) or (2) of this section, and each employer member thereof, shall be considered to be an insurer and subject to all the rights, responsibilities, and provisions pertaining to insurers as otherwise provided in this title.

(4) To carry out the provisions of this section, the insurance commissioner shall promulgate rules pursuant to chapter 34.04 RCW. These rules shall with respect to group self-insurance plans:

(a) Establish reporting requirements for administrators;

(b) Establish standards and guidelines to assure the adequacy of financing and administration;

(c) Establish bonding requirements and other necessary security arrangements assuring the financial integrity of entities administering such plans;

(d) Establish standards as necessary to provide stability of membership;

(e) Establish standards, guidelines, and procedures governing formation, operation, administration, and dissolution;

(f) Establish other reasonable requirements to further the purposes of this section; and

(g) Assure the adequacy of reserves in the event the group is dissolved or fails to meet any of the qualifications necessary to maintain its standing as a self-insuring group.

(5) If at any time the insurance commissioner finds that any group self-insurance plan no longer meets the requirements of this section or of the rules promulgated thereunder, certification under subsection (1) or (2) of this section, as the case may be, shall be withdrawn: PROVIDED, That such withdrawal shall not relieve the group or any member thereof from liability for compensation for any injury incurred while such certification was in effect.

Sec. 30. Section 16, chapter 289, Laws of 1971 ex. sess. as last amended by section 4, chapter 129, Laws of 1980 and RCW 51.16.035 are each amended to read as follows:

((The department shall classify all occupations or industries in accordance with their degree of hazard and fix therefor basic rates of premium which shall be the lowest necessary to maintain actuarial solvency of the accident and medical aid funds in accordance with recognized insurance principles. The department shall formulate and adopt rules and regulations governing the method of premium calculation and collection and providing for a rating system consistent with recognized principles of workers' compensation insurance which shall be designed to stimulate and encourage accident prevention and to facilitate collection. The department may annually, or at such other times as it deems necessary to maintain solvency of the funds, readjust rates in accordance with the rating system to become effective on such dates as the department may designate.

~~The department~~)) Insurers may insure the workers' compensation obligations of employers as a group if the following conditions are met:

(1) All the employers in the group are members of an organization that has been in existence for at least two years;

(2) The organization was formed for a purpose other than that of obtaining workers' compensation coverage;

(3) The occupations or industries of the employers in the organization are substantially similar, taking into consideration the nature of the services being performed by workers of such employers;

(4) The employers in the group constitute at least ((~~fifty~~)) forty percent of the total employers in such organization; and

(5) The formation and operation of the group program in the organization will substantially improve accident prevention and claim management for the employers in the group.

In providing an employer group plan under this section, ((~~the department~~)) an insurer may consider an employer group as a single employing entity for purposes of dividends or premium discounts.

Sec. 31. Section 13, chapter 260, Laws of 1981 and RCW 51.16.060 are each amended to read as follows:

((Every employer not qualifying as a self-insurer, shall insure with the state and shall, on or before the last day of January, April, July and October of each year thereafter, furnish the department with a true and accurate payroll for the period in which workers were employed by it during the preceding calendar quarter, the total amount paid to such workers during such preceding calendar quarter, and a segregation of employment in the different classes established pursuant to this title, and shall pay its premium thereon to the appropriate fund. The sufficiency of such statement shall be subject to the approval of the director: PROVIDED, That the director may in his or her discretion and for the effective administration of this title require an employer in individual instances to furnish a supplementary report containing the name of each individual worker, his or her hours worked, his or her rate of pay and the class or classes in which such work was performed: PROVIDED FURTHER, That in the event an employer shall furnish the department with four consecutive quarterly reports wherein each such quarterly report indicates that no premium is due the department may close the account: PROVIDED FURTHER, That the department may promulgate rules and regulations in accordance with chapter 34.04 RCW to establish other reporting periods and payment due dates in lieu of reports and payments following each calendar quarter, and may also establish terms and conditions for payment of premiums and assessments based on estimated payrolls, with such payments being subject to approval as to sufficiency of the estimated payroll by the department, and also subject to appropriate periodic adjustments made by the department based on actual payroll: AND PROVIDED FURTHER, That)) A temporary help company which provides workers on a temporary basis to its customers shall be considered the employer for purposes of reporting and paying premiums and assessments under this title according to the appropriate rate classifications as determined by the ((~~department: PROVIDED, That the employer~~)) insurer. The customers shall be liable for paying premiums and assessments, should the temporary help company fail to pay the premiums and assessments under this title.

Sec. 32. Section 51.16.105, chapter 23, Laws of 1961 as last amended by section 27, chapter 350, Laws of 1977 ex. sess. and RCW 51.16.105 are each amended to read as follows:

All expenses of the industrial safety and health division of the department pertaining to workers' compensation shall be paid ((~~by the department and financed by premiums and by assessments collected from a self-insurer as provided in this title~~)) from the workers' compensation administrative fund created by section 57 of this 1985 act.

Sec. 33. Section 51.16.140, chapter 23, Laws of 1961 as last amended by section 29, chapter 350, Laws of 1977 ex. sess. and RCW 51.16.140 are each amended to read as follows:

((Every employer who is not a self-insurer shall deduct from the pay of each of his or her workers one-half of the amount he or she is required to pay, for medical benefits within each risk classification. Such amount shall be periodically determined by the director and reported by him or her to all employers under this title: PROVIDED, That the state governmental unit shall pay the entire amount into the medical aid fund for volunteers, as defined in RCW 51.12.035, and the state apprenticeship council shall pay the entire amount into the medical aid fund for registered apprentices or trainees, for the purposes of RCW 51.12.130.)) It shall be unlawful for ((~~the~~)) any employer, unless specifically authorized by this title, to deduct or obtain any part of the premium or other costs required to be by him or her paid by reason of this title from the wages or earnings of any of his or her workers, and the making of or attempt to make any such deduction shall be a gross misdemeanor.

Sec. 34. Section 1, chapter 85, Laws of 1977 ex. sess. as amended by section 3, chapter 218, Laws of 1984 and RCW 51.24.030 are each amended to read as follows:

((~~(1)~~)) If an injury to a worker for which benefits and compensation are provided under this title is due to the negligence or wrong of a third person not in the same employ, the injured worker or beneficiary may elect to seek damages from the third person((.)): PROVIDED, That no liability shall exist on the part of, and no cause of action shall arise against:

(1) Any insurer or safety consultant concerning the scope of or any other aspect of any safety consultation, inspection, or any other safety-related service undertaken to assist an employer in carrying out its obligations under this title, and under chapter 49.17 RCW;

(2) Any collective bargaining unit or other organization of employees concerning any suggestions made or offered to the employer relating to the safety of the workplace; and

((~~(2)~~)) (3) For the purposes of this chapter, "injury" shall include any physical or mental condition, disease, ailment or loss, including death, for which compensation and benefits are paid or payable under this title.

Sec. 35. Section 51.28.010, chapter 23, Laws of 1961 as last amended by section 32, chapter 350, Laws of 1977 ex. sess. and RCW 51.28.010 are each amended to read as follows:

Whenever any accident occurs to any worker it shall be the duty of such worker or someone in his or her behalf to forthwith report such accident to his or her employer, superintendent or foreman or forewoman in charge of the work, and of the employer to at once report such accident and the injury resulting therefrom to the department pursuant to RCW 51.28.025, as now or hereafter amended, where the worker has received treatment from a physician, has been hospitalized, disabled from work, or has died as the apparent result of such accident and injury.

Upon receipt of such notice of accident, the ((~~department~~)) employer shall immediately forward to the worker or his or her beneficiaries or dependents written notification, in nontechnical language, of their rights under this title, which shall clearly identify the insurer who is responsible for the payment of compensation and shall list the name, telephone number, and exact location within the state where application for compensation should be made and where information may be obtained about all matters relating to any claim.

Sec. 36. Section 51.28.020, chapter 23, Laws of 1961 as last amended by section 3, chapter 159, Laws of 1984 and RCW 51.28.020 are each amended to read as follows:

Where a worker is entitled to compensation under this title he or she shall file with the ((~~department or his or her self-insuring employer, as the case may be,~~)) insurer his or her application for such, ((~~together with~~)) and the certificate of the physician who attended him or her((~~, and~~)). It shall be the duty of the ((~~physician~~)) employer to inform the injured worker of his or her rights under this title and to lend all necessary assistance in making this application for compensation and such proof of other matters as required by the rules of the department without charge to the worker. The department shall provide physicians with a manual which outlines the procedures to be followed in applications for compensation involving occupational diseases, and which describes claimants' rights and responsibilities related to occupational disease claims. ((~~If application for compensation is made to a self-insuring employer, he or she~~)) A copy of this application shall be sent forthwith ((~~send a copy thereof~~)) to the department by the insurer.

Sec. 37. Section 39, chapter 289, Laws of 1971 ex. sess. as amended by section 5, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.28.025 are each amended to read as follows:

(1) Whenever an employer has notice or knowledge of an injury or occupational disease sustained by any ((~~workman~~)) worker in his or her employment who has received treatment from a physician, has been hospitalized, disabled from work, or has died as the apparent result of such injury or occupational disease, ((he)) the employer shall immediately report the same to the department on forms prescribed by it. The report shall include:

(a) The name, address, and business of the employer;

(b) The name, address, and occupation of the ((~~workman~~)) worker;

(d) Whether the injury or occupational disease arose in the course of the injured ((~~workman's~~)) worker's employment;

(e) All available information pertaining to the nature of the injury or occupational disease including but not limited to any visible signs, any complaints of the ((~~workman~~)) worker, any time lost from work, and the observable effect on the ((~~workman's~~)) worker's bodily functions, so far as is known; and

(f) Such other pertinent information as the department may prescribe by regulation.

(2) Failure or refusal to timely file the report required by subsection (1) shall subject the offending employer to a penalty of ((~~one~~)) five hundred dollars for each offense, to be collected in a civil action in the name of the department and paid into the supplemental pension fund.

Sec. 38. Section 51.28.030, chapter 23, Laws of 1961 as last amended by section 17, chapter 43, Laws of 1972 ex. sess. and RCW 51.28.030 are each amended to read as follows:

Where death results from injury the parties entitled to compensation under this title, or someone in their behalf, shall make application for the same to the ((~~department or self-insurer as the case may be~~)) insurer, which application must be accompanied with proof of death and proof of relationship showing the parties to be entitled to compensation under this title, certificates of attending physician, if any, and such proof as required by the rules of the department.

Upon receipt of notice of accident under RCW 51.28.010, the ((~~director~~)) employer shall immediately forward to the party or parties required to make application for compensation under this section, notification, in nontechnical language, of their rights under this title. Such notification shall clearly identify the insurer who is responsible for the payment of compensation and shall list all offices, including telephone numbers, where application for compensation is to be made and information may be obtained about all matters relating to any claim.

Sec. 39. Section 51.32.050, chapter 23, Laws of 1961 as last amended by section 18, chapter 63, Laws of 1982 and RCW 51.32.050 are each amended to read as follows:

(1) Where death results from the injury the expenses of burial not to exceed two thousand dollars shall be paid.

(2) ((~~(a)~~)) Where death results from the injury, if there are no children of the deceased or if there be one or more children of the deceased in the legal custody of a surviving spouse of a deceased worker eligible for benefits under this title, such spouse shall receive monthly for life or until remarriage ((~~payments according to the following schedule:~~

~~(i) If there are no children of the deceased worker, sixty percent of the wages of the deceased worker but not less than one hundred eighty-five dollars;~~

~~(ii) If there is one child of the deceased worker and in the legal custody of such spouse, sixty-two percent of the wages of the deceased worker but not less than two hundred twenty-two dollars;~~

(iii) If there are two children of the deceased worker and in the legal custody of such spouse, sixty-four percent of the wages of the deceased worker but not less than two hundred fifty-three dollars;

(iv) If there are three children of the deceased worker and in the legal custody of such spouse, sixty-six percent of the wages of the deceased worker but not less than two hundred seventy-six dollars;

(v) If there are four children of the deceased worker and in the legal custody of such spouse, sixty-eight percent of the wages of the deceased worker but not less than two hundred ninety-nine dollars; or

(vi) If there are five or more children of the deceased worker and in the legal custody of such spouse, seventy percent of the wages of the deceased worker but not less than three hundred twenty-two dollars)) eighty percent of the spendable monthly earnings of the deceased worker.

((~~(b)~~)) (3) Where the surviving spouse does not have legal custody of any child or children of the deceased worker, or where after the death of the worker legal custody of such child or children passes from such surviving spouse to another, any payment on account of such child or children not in the legal custody of the surviving spouse shall be made to the person or persons having legal custody of such child or children. The amount of such payments shall be ((~~five~~)) six percent of the ((~~monthly benefits~~)) spendable monthly earnings payable as a result of the worker's death for each such child but such payments shall not exceed ((~~twenty-five~~)) thirty percent of such spendable monthly earnings. Such payments on account of such child or children shall be subtracted from the amount to which such surviving spouse would have been entitled had such surviving spouse had legal custody of all of the children and the surviving spouse shall receive the remainder after such payments on account of such child or children have been subtracted. Such payments on account of a child or children not in the legal custody of such surviving spouse shall be apportioned equally among such children.

((~~(c)~~)) (4) Payments to the surviving spouse of the deceased worker under subsection (2) of this section shall cease at the end of the month in which remarriage occurs: PROVIDED, That the monthly payment made to the child or children of the deceased worker shall from the month following such remarriage be a sum equal to ((~~five~~)) six percent of the ((~~wages~~)) spendable monthly earnings of the deceased worker for one child and a sum equal to ((~~five~~)) six percent of such spendable monthly earnings for each additional child up to a maximum of five such children. Payments to such child or children shall be apportioned equally among such children. ((~~Such sum shall be in place of any payments theretofore made for the benefit of or on account of any such child or children.~~

~~(d)~~)) In no event shall the monthly payments provided in subsection (2), (3), or (4) of this section exceed ((~~seventy-five percent of~~)) the average monthly wage in the state as computed under RCW 51.08.018 or be less than fifty percent of the average monthly wage in the state as computed under RCW 51.08.018, or one hundred percent of the worker's spendable monthly earnings, whichever is the lesser of the two amounts.

((~~(e)~~)) (5) In addition to the monthly payments provided for in subsections (2)((~~(a)~~)) through ((~~(2)(c)~~)) (4) of this section, a surviving spouse or child or children of such worker if there is no surviving spouse, or dependent parent or parents, if there is no surviving spouse or child or children of any such deceased worker shall be forthwith paid the sum of one thousand six hundred dollars, any such children, or parents to share and share alike in said sum.

((~~(f)~~)) (6) Upon remarriage of a surviving spouse the monthly payments for the child or children shall continue as provided in this section, but the monthly payments to such surviving spouse shall cease at the end of the month during which remarriage occurs. However, after September 8, 1975, an otherwise eligible surviving spouse of a worker who died at any time prior to or after September 8, 1975, shall have an option of:

((~~(i)~~)) (a) Receiving, once and for all, a lump sum of ((~~seventy-five hundred~~)) fifteen thousand dollars or fifty percent of the then remaining annuity value of his or her pension, whichever is the lesser: PROVIDED, That if the injury occurred prior to July 1, ((~~1971~~)) 1985, the remarriage benefit lump sum available shall be as provided in the remarriage benefit schedules then in effect; or

((~~(ii)~~)) (b) If a surviving spouse does not choose the option specified in ((~~(2)(f)(i)~~)) subsection (6)(a) of this section to accept the lump sum payment, the remarriage of the surviving spouse of a worker shall not bar him or her from claiming the lump sum payment authorized in ((~~(2)(f)(i)~~)) subsection (6)(a) of this section during the life of the remarriage, or shall not prevent subsequent monthly payments to him or to her if the remarriage has been terminated by death or has been dissolved or annulled by valid court decree provided he or she has not previously accepted the lump sum payment((.

~~(g)~~)): PROVIDED, HOWEVER, That if the surviving spouse during the remarriage should die without having previously received the lump sum payment provided in ((~~(2)(f)(i)~~)) subsection (6)(a) of this section, his or her estate shall be entitled to receive the sum of ((~~seventy-five hundred~~)) fifteen thousand dollars or fifty percent of the then remaining annuity value of his or her pension whichever is the lesser: PROVIDED FURTHER, That if it should be necessary to increase the reserves for any case as a result of the provisions of this section after the effective date of this 1985 act, the amount of such increase in reserve in any such case shall be transferred to the insurer from the supplemental pension fund.

((~~(h)~~)) (7) The effective date of resumption of payments under ((~~(2)(f)(ii)~~)) subsection (6)(b) of this section to a surviving spouse based upon termination of a remarriage by death, annulment, or dissolution shall be the date of the death or the date the judicial decree of annulment or dissolution becomes final and when application for the payments has been received.

(((i) If it should be necessary to increase the reserves in the reserve fund or to create a new pension reserve fund as a result of the amendments in *chapter 45, Laws of 1975-'76 2nd ex. sess., the amount of such increase in pension reserve in any such case shall be transferred to the reserve fund from the supplemental pension fund.

~~(3)~~)) (8) If there is a child or children and no surviving spouse of the deceased worker or the surviving spouse is not eligible for benefits under this title, a sum equal to ((~~thirty-five~~)) forty percent of the ((~~wages~~)) spendable monthly earnings of the deceased worker shall be paid monthly for one child and a sum equivalent to ((~~fifteen~~)) twenty percent of such ((~~wage~~)) spendable monthly earnings shall be paid monthly for each additional child, the total of such sum to be divided among such children, share and share alike: PROVIDED, That benefits under this subsection or subsection ((~~(4)~~)) (9) of this section shall not exceed ((~~sixty-five~~)) eighty percent of the ((~~wages~~)) spendable monthly earnings of the deceased worker at the time of his or her death or ((~~seventy-five percent of~~)) the average monthly wage in the state as defined in RCW 51.08.018, whichever is the lesser of the two sums.

((~~(4)~~)) (9) In the event a surviving spouse receiving monthly payments dies, the child or children of the deceased worker shall receive the same payment as provided in subsection ((~~(3)~~)) (8) of this section.

((~~(5)~~)) (10) If the worker leaves no surviving spouse or child, but leaves a dependent or dependents, a monthly payment shall be made to each dependent equal to fifty percent of the average monthly support actually received by such dependent from the worker during the twelve months next preceding the occurrence of the injury, but the total payment to all dependents in any case shall not exceed ((~~sixty-five~~)) eighty percent of the ((~~wages~~)) spendable monthly earnings of the deceased worker at the time of the death or ((~~seventy-five percent of~~)) the average monthly wage in the state as defined in RCW 51.08.018, whichever is the lesser of the two sums. If any dependent is under the age of eighteen years at the time of the occurrence of the injury, the payment to such dependent shall cease when such dependent reaches the age of eighteen years except such payments shall continue until the dependent reaches age twenty-three while permanently enrolled at a full time course in an accredited school. The payment to any dependent shall cease if and when, under the same circumstances, the necessity creating the dependency would have ceased if the injury had not happened.

((~~(6)~~)) (11) If the injured worker dies during the period of permanent total disability, whatever the cause of death, leaving a surviving spouse, or child, or children, the surviving spouse or child or children shall receive benefits as if death resulted from the injury as provided in subsections (2) through ((~~(4)~~)) (9) of this section. Upon remarriage or death of such surviving spouse the payments to such child or children shall be made as provided in subsection ((~~(2)~~)) (4) of this section when the surviving spouse of a deceased worker remarries.

Sec. 40. Section 46, chapter 289, Laws of 1971 ex. sess. as last amended by section 1, chapter 326, Laws of 1981 and RCW 51.32.055 are each amended to read as follows:

(1) One purpose of this title is to restore the injured worker as near as possible to the condition of self-support as an able-bodied worker. Benefits for permanent disability shall be determined under the director's supervision only after the injured worker's condition becomes fixed.

(2) All determinations of the existence and extent of permanent disabilities shall be made by the department. Either the worker, employer, or ((~~self-insurer~~)) insurer may make a request or such inquiry may be initiated by the director on his or her own motion. Such determinations shall be required in every instance where permanent disability is likely to be present. All medical reports and other pertinent information in the possession of or under the control of the worker, employer, or ((~~self-insurer~~)) insurer shall be forwarded to the director with such requests.

(3) A request for determination of permanent disability shall be examined by the department and an order shall issue in accordance with RCW 51.52.050.

(4) The department may require that the worker present himself or herself for a special medical examination by a physician, or physicians, selected by the department, and the department may require that the worker present himself or herself for a personal interview. In such event the costs of such examination or interview, including payment of any reasonable travel expenses, shall be paid by the ((~~department or self-insurer as the case may be~~)) insurer.

(5) The director may establish a medical bureau within the department to perform medical examinations ((~~under this section~~)). Physicians hired or retained for this purpose shall be grounded in industrial medicine and in the assessment of industrial physical impairment. ((~~Self-insurers~~)) Insurers shall bear a proportionate share of the cost of such medical bureau in a manner to be determined by the department.

(6) Where dispute arises from the handling of any claims prior to the condition of the injured worker becoming fixed, the worker, employer, or ((~~self-insurer~~)) insurer may request the department to resolve the dispute or the director may initiate an inquiry on his or her own motion. In such cases the department shall proceed as provided in this section and an order shall issue in accordance with RCW 51.52.050.

(7) In the case of claims accepted by ((~~self-insurers~~)) insurers which involve only medical treatment and which do not involve payment of temporary disability compensation under RCW 51.32.090 and which at the time medical treatment is concluded do not involve permanent disability, such claims may be closed by the ((~~self-insurers~~)) insurers subject to reporting of claims to the department in a manner prescribed by department rules promulgated pursuant to chapter 34.04 RCW. Upon such closure the ((~~self-insurers~~)) insurers shall enter a written order, communicated to the worker, which contains the following statement clearly set forth in bold-face type: "This order constitutes notification that your claim is being closed with medical benefits only, as provided. If for any reason you disagree with this closure, you may protest in writing to the Department of Labor and Industries, Olympia, within 60 days of the date you received this order. The department will then review your claim and enter a further determinative order." In the event the department receives such a protest it shall review the claim and enter a further determinative order as provided for in RCW 51.52.050.

Sec. 41. Section 51.32.060, chapter 23, Laws of 1961 as last amended by section 159, chapter 3, Laws of 1983 and RCW 51.32.060 are each amended to read as follows:

(1) When ((~~the supervisor of industrial insurance shall determine that~~)) permanent total disability results from the injury, the worker shall receive monthly during the period of such disability((:

~~(1) If married at the time of injury, sixty-five percent of his or her wages but not less than two hundred fifteen dollars per month.~~

~~(2) If married with one child at the time of injury, sixty-seven percent of his or her wages but not less than two hundred fifty-two dollars per month.~~

~~(3) If married with two children at the time of injury, sixty-nine percent of his or her wages but not less than two hundred eighty-three dollars.~~

~~(4) If married with three children at the time of injury, seventy-one percent of his or her wages but not less than three hundred six dollars per month.~~

~~(5) If married with four children at the time of injury, seventy-three percent of his or her wages but not less than three hundred twenty-nine dollars per month.~~

~~(6) If married with five or more children at the time of injury, seventy-five percent of his or her wages but not less than three hundred fifty-two dollars per month.~~

~~(7) If unmarried at the time of the injury, sixty percent of his or her wages but not less than one hundred eighty-five dollars per month.~~

~~(8) If unmarried with one child at the time of injury, sixty-two percent of his or her wages but not less than two hundred twenty-two dollars per month.~~

~~(9) If unmarried with two children at the time of injury, sixty-four percent of his or her wages but not less than two hundred fifty-three dollars per month.~~

~~(10) If unmarried with three children at the time of injury, sixty-six percent of his or her wages but not less than two hundred seventy-six dollars per month.~~

~~(11) If unmarried with four children at the time of injury, sixty-eight percent of his or her wages but not less than two hundred ninety-nine dollars per month.~~

~~(12) If unmarried with five or more children at the time of injury, seventy percent of his or her wages but not less than three hundred twenty-two dollars per month.~~

(13) For any period of time where both husband and wife are entitled to compensation as temporarily or totally disabled workers, only that spouse having the higher wages of the two shall be entitled to claim their child or children for compensation purposes)) eighty percent of his or her spendable monthly earnings per month.

((~~(14)~~)) (2) In case of permanent total disability, if the character of the injury is such as to render the worker so physically helpless as to require the hiring of the services of an attendant, the ((~~department~~)) insurer shall make monthly payments to such attendant for such services as long as such requirement continues, but such payments shall not obtain or be operative while the worker is receiving care under or pursuant to the provisions of chapter 51.36 RCW ((~~and RCW 51.04.105~~)).

((~~(15)~~)) (3) Should any further ((~~accident~~)) injury result in the permanent total disability of an injured worker, he or she shall receive the pension to which he or she would be entitled, notwithstanding the payment of a lump sum for his or her prior injury.

((~~(16)~~)) (4) In no event shall the monthly payments provided in this section exceed ((~~seventy-five percent of~~)) the average monthly wage in the state as computed under the provisions of RCW 51.08.018, except that this limitation shall not apply to the payments provided for in subsection ((~~(14)~~)) (2) of this section.

Sec. 42. Section 51.32.080, chapter 23, Laws of 1961 as last amended by section 2, chapter 20, Laws of 1982 1st ex. sess. and RCW 51.32.080 are each amended to read as follows:

(1) For the permanent partial disabilities here specifically described, the injured worker shall receive compensation as follows:

LOSS BY AMPUTATION OR TOTAL LOSS OF USE OF FUNCTION

@i2!tp1Of leg above the knee joint with short thigh stump (3" or less below the tuberosity of ischium)!w× !tr!sc ,14

!ae0!tr$((~~36,000.00~~))

!tj1!tr18,000.00

@i2Of leg at or above knee joint with functional stump!w× !tr!sc ,14

!ae0!tr((~~32,400.00~~))

!tj1!tr16,200.00

@i2Of leg below knee joint!w× !tr!sc ,14

!ae0!tr((~~28,800.00~~))

!tj1!tr14,400.00

@i2Of leg at ankle (Syme)!w× !tr!sc ,14

!ae0!tr((~~25,200.00~~))

!tj1!tr12,600.00

@i2Of foot at mid-metatarsals!w× !tr!sc ,14

!ae0!tr((~~12,600.00~~))

!tj1!tr6,300.00

@i2Of great toe with resection of metatarsal bone!w× !tr!sc ,14

!ae0!tr((~~7,560.00~~))

!tj1!tr3,780.00

@i2Of great toe at metatarsophalangeal joint!w× !tr!sc ,14

!ae0!tr((~~4,536.00~~))

!tj1!tr2,268.00

@i2Of great toe at interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~2,400.00~~))

!tj1!tr1,200.00

@i2Of lesser toe (2nd to 5th) with resection of metatarsal bone!w× !tr!sc ,14

!ae0!tr((~~2,760.00~~))

!tj1!tr1,380.00

@i2Of lesser toe at metatarsophalangeal joint!w× !tr!sc ,14

!ae0!tr((~~1,344.00~~))

!tj1!tr672.00

@i2Of lesser toe at proximal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~996.00~~))

!tj1!tr498.00

@i2Of lesser toe at distal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~252.00~~))

!tj1!tr126.00

@i2Of arm at or above the deltoid insertion or by disarticulation at the shoulder!w× !tr!sc ,14

!ae0!tr((~~36,000.00~~))

!tj1!tr18,000.00

@i2Of arm at any point from below the deltoid insertion to below the elbow joint at the insertion of the biceps tendon!w× !tr!sc ,14

!ae0!tr((~~34,200.00~~))

!tj1!tr17,100.00

@i2Of arm at any point from below the elbow joint distal to the insertion of the biceps tendon to and including mid-metacarpal amputation of the hand!w× !tr!sc ,14

!ae0!tr((~~32,400.00~~))

!tj1!tr16,200.00

@i2Of all fingers except the thumb at metacarpophalangeal joints!w× !tr!sc ,14

!ae0!tr((~~19,440.00~~))

!tj1!tr9,720.00

@i2Of thumb at metacarpophalangeal joint or with resection of carpometacarpal bone!w× !tr!sc ,14

!ae0!tr((~~12,960.00~~))

!tj1!tr6,480.00

@i2Of thumb at interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~6,480.00~~))

!tj1!tr3,240.00

@i2Of index finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,14

!ae0!tr((~~8,100.00~~))

!tj1!tr4,050.00

@i2Of index finger at proximal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~6,480.00~~))

!tj1!tr3,240.00

@i2Of index finger at distal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~3,564.00~~))

!tj1!tr1,782.00

@i2Of middle finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,14

!ae0!tr((~~6,480.00~~))

!tj1!tr3,240.00

@i2Of middle finger at proximal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~5,184.00~~))

!tj1!tr2,592.00

@i2Of middle finger at distal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~2,916.00~~))

!tj1!tr1,458.00

@i2Of ring finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,14

!ae0!tr((~~3,240.00~~))

!tj1!tr1,620.00

@i2Of ring finger at proximal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~2,592.00~~))

!tj1!tr1,296.00

@i2Of ring finger at distal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~1,620.00~~))

!tj1!tr810.00

@i2Of little finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,14

!ae0!tr((~~1,620.00~~))

!tj1!tr810.00

@i2Of little finger at proximal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~1,296.00~~))

!tj1!tr648.00

@i2Of little finger at distal interphalangeal joint!w× !tr!sc ,14

!ae0!tr((~~648.00~~))

!tj1!tr324.00

MISCELLANEOUS

@i2Loss of one eye by enucleation!w× !tr!sc ,14

!ae0!tr((~~14,400.00~~))

!tj1!tr7,200.00

@i2Loss of central visual acuity in one eye!w× !tr!sc ,14

!ae0!tr((~~12,000.00~~))

!tj1!tr6,000.00

@i2Complete loss of hearing in both ears!w× !tr!sc ,14

!ae0!tr((~~28,800.00~~))

!tj1!tr14,400.00

@i2Complete loss of hearing in one ear!w× !tr!sc ,14

!ae0!tr((~~4,800.00~~))

!tj1!tr2,400.00!te

(2) Compensation for amputation or total loss of use or function of a member or part thereof at a site other than those above specified, ((~~and~~)) or for loss of central visual acuity and loss of hearing other than complete, shall be in proportion to that above specified which such other amputation or partial loss of visual acuity or hearing most closely resembles and approximates. ((Compensation for any other permanent partial disability not involving amputation shall be in the proportion which the extent of such other disability, called unspecified disability, shall bear to that above specified, which most closely resembles and approximates in degree of disability such other disability, compensation for any other unspecified permanent partial disability shall be in an amount as measured and compared to total bodily impairment: PROVIDED, That in order to reduce litigation and establish more certainty and uniformity in the rating of unspecified permanent partial disabilities, the department shall enact rules having the force of law classifying such disabilities in the proportion which the department shall determine such disabilities reasonably bear to total bodily impairment. In enacting such rules, the department shall give consideration to, but need not necessarily adopt, any nationally recognized medical standards or guides for determining various bodily impairments. For purposes of calculating monetary benefits, the amount payable for total bodily impairment shall be deemed to be sixty thousand dollars: PROVIDED, That compensation for unspecified permanent partial disabilities involving injuries to the back that do not have marked objective clinical findings to substantiate the disability shall be determined at an amount equal to seventy-five percent of the monetary value of such disability as related to total bodily impairment: PROVIDED FURTHER, That the total compensation for all unspecified permanent partial disabilities resulting from the same injury shall not exceed the sum of sixty thousand dollars, except that the total compensation for all unspecified permanent partial disabilities involving injuries to the back that do not have marked objective clinical findings to substantiate the disability and resulting from the same injury shall not exceed the sum of forty-five thousand dollars: PROVIDED FURTHER, That in case permanent partial disability compensation is followed by permanent total disability compensation, any portion of the permanent partial disability compensation which exceeds the amount that would have been paid the injured worker if permanent total disability compensation had been paid in the first instance, shall be deducted from the pension reserve of such injured worker and his or her monthly compensation payments shall be reduced accordingly.

(3) Should a worker receive an injury to a member or part of his or her body already, from whatever cause, permanently partially disabled, resulting in the amputation thereof or in an aggravation or increase in such permanent partial disability but not resulting in the permanent total disability of such worker, his or her compensation for such partial disability shall be adjudged with regard to the previous disability of the injured member or part and the degree or extent of the aggravation or increase of disability thereof.

(4) When the compensation provided for in subsections (1) and (2) exceeds three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, payment shall be made in monthly payments in accordance with the schedule of temporary total disability payments set forth in RCW 51.32.090 until such compensation is paid to the injured worker in full, except that the first monthly payment shall be in an amount equal to three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, and interest shall be paid at the rate of eight percent on the unpaid balance of such compensation commencing with the second monthly payment: PROVIDED, That upon application of the injured worker or survivor the monthly payment may be converted, in whole or in part, into a lump sum payment, in which event the monthly payment shall cease in whole or in part. Such conversion may be made only upon written application of the injured worker or survivor to the department and shall rest in the discretion of the department depending upon the merits of each individual application: PROVIDED FURTHER, That upon death of a worker all unpaid installments accrued shall be paid according to the payment schedule established prior to the death of the worker to the widow or widower, or if there is no widow or widower surviving, to the dependent children of such claimant, and if there are no such dependent children, then to such other dependents as defined by this title.)) Compensation for serious facial or head disfigurement may be allowed up to a maximum of twelve thousand five hundred dollars.

(3) An injured worker who suffers from any permanent partial disability shall also receive compensation in the form of wage-loss benefits pursuant to this section.

(4) The department shall promulgate rules having the force of law establishing a schedule for determining the existence and degree of permanent impairments based upon medically and scientifically demonstrable findings. The schedule shall be based on generally recognized medical standards or guides for determining various bodily impairments and may incorporate all or part of one or more of such medical standards or guides. Any injured worker who suffers any permanent impairment, as determined pursuant to the adopted schedule, may be entitled to wage-loss benefits by reason thereof. Such benefits shall be based on actual spendable wage loss, subject however to a maximum compensation rate in any case equal to the average monthly wage in the state as computed under RCW 51.08.018, and no compensation shall be payable unless the loss of spendable monthly earnings exceeds ten percent. Such wage-loss benefits shall be equal to eighty percent of the difference between the worker's spendable monthly earnings at the time of the injury and the spendable monthly earnings the worker is able to earn as a result of the injury after the worker's condition has become fixed, as compared on a monthly basis.

(5) The amount determined to be the spendable monthly earnings the worker is able to earn after the worker's condition has become fixed shall in no case be less than the spendable monthly earnings actually being received by the worker, including earnings from sheltered employment. If the insurer submits evidence to the department that the worker is intentionally limiting his or her earnings for the purpose of obtaining wage loss benefits or has failed to accept employment commensurate with his or her abilities when available within a reasonable distance, the department shall consider the evidence and may enter an order reducing or suspending the wage loss for so long as such practice continues. For a wage-loss benefit to be payable, it must be established that any such wage loss claimed is the result of the compensable injury.

(6) The right to wage-loss benefits shall terminate one hundred twenty months after the date it was determined that the worker's condition had become fixed.

(7) After the injured worker reaches age sixty-two, wage-loss benefits shall be reduced by the total amount of social security retirement benefits which the worker is receiving, not to exceed fifty percent of the worker's wage-loss benefits.

(8) After the injured worker reaches age sixty-five, wage-loss benefits shall be reduced by the total amount of social security retirement benefits which the worker is receiving.

(9) If a worker receiving wage-loss benefits suffers a subsequent injury causing temporary disability, both wage-loss benefits and temporary disability compensation shall be payable during the duration of temporary disability, provided that the total compensation payable shall not exceed the maximum compensation rate in effect for his or her temporary disability at the time of the subsequent injury. Any reduction in compensation due to such limit shall be applied first to the wage-loss benefits payable as a result of the prior injury.

(10) If a worker receiving wage-loss benefits suffers a subsequent injury causing an additional compensable wage loss, benefits for each wage loss shall be payable, provided that the total wage-loss benefits payable shall not exceed the maximum compensation rate in effect for his or her wage-loss benefits at the time of the subsequent injury. Any reduction in wage-loss benefits due to such limitation shall be applied first to the benefits payable as a result of the prior injury.

(11) Any compensable wage loss shall be reported by the worker to the insurer within thirty days after the termination of the month for which such loss is claimed. The department shall provide by rule for the reporting of wage loss by the injured worker and for the reporting of wage loss and payment of wage-loss benefits by the employer or insurer to the department, and may prescribe forms for such reporting. The department, upon request by the employer or insurer, shall provide verification through unemployment compensation records of any claimed wage loss and shall obtain such verification from other states, if applicable. The department shall require by rule that the employer or insurer inform a worker who suffers a permanent impairment of his or her possible entitlement to wage-loss and other benefits and of the worker's obligation to report a claimed wage loss. The department shall also provide by rule for notification in writing to the worker and the department of the date that the insurer indicates that the worker's condition has become fixed.

Sec. 43. Section 51.32.090, chapter 23, Laws of 1961 as last amended by section 1, chapter 129, Laws of 1980 and RCW 51.32.090 are each amended to read as follows:

(1) When the total disability is only temporary, the schedule of payments contained in ((~~subdivisions (1) through (13) of~~)) RCW 51.32.060 ((~~as amended~~)) shall apply, so long as the total disability continues.

(2) ((Any compensation payable under this section for children not in the custody of the injured worker as of the date of injury shall be payable only to such person as actually is providing the support for such child or children pursuant to the order of a court of record providing for support of such child or children.

~~(3)~~)) As soon as recovery is so complete that the present ((~~earning power~~)) spendable monthly earnings of the worker, at any kind of work, ((is)) are restored to ((~~that~~)) ninety percent of the spendable monthly earnings existing at the time of the occurrence of the injury, the temporary disability payments shall cease. If and so long as the present ((~~earning power is only partially restored~~)) spendable monthly earnings are less than ninety percent of such earnings at the time of the injury and the worker's condition has not become fixed, the temporary disability payments shall ((~~continue in the proportion which the new earning power shall bear to the old~~)) be equal to eighty percent of the difference between the worker's spendable monthly earnings at the time of the injury and the present spendable monthly earnings. ((~~No compensation shall be payable unless the loss of earning power shall exceed five percent.~~

~~(4)~~)) (3) A worker who has sustained a compensable injury or illness shall have preference in being returned to the worker's former position with the same employer, or to a similar position which is available, if the worker is capable of performing the duties of the position. A physician's certification that the worker is physically capable of performing the duties required of the position shall be considered.

Whenever an employer requests that a worker who is entitled to temporary total disability under this chapter be certified by a physician as able to perform available work other than his or her usual work, the employer shall furnish to the physician, with a copy to the worker, a statement describing the available work in terms that will enable the physician to relate the physical activities of the job to the worker's disability. The physician shall then determine whether the worker is physically able to perform the work described. If the worker is released by his or her physician for said work, and the work thereafter comes to an end before the worker's recovery is sufficient in the judgment of his or her physician to permit him or her to return to his or her usual job, or to perform other available work, the worker's temporary total disability payments shall be resumed. Should the available work described, once undertaken by the worker, impede his or her recovery to the extent that in the judgment of his or her physician he or she should not continue to work, the worker's temporary total disability payments shall be resumed when the worker ceases such work.

Once the worker returns to work under the terms of this subsection, he or she shall not be assigned by the employer to work other than the available work described without the worker's written consent, or without prior review and approval by the worker's physician.

In the event of any dispute as to the worker's ability to perform the available work offered by the employer, the department shall make the final determination.

((~~(5)~~)) (4) No worker shall receive compensation for or during the day on which injury was received or the three days following the same, unless his or her disability shall continue for a period of fourteen consecutive calendar days from date of injury: PROVIDED, That attempts to return to work in the first fourteen days following the injury shall not serve to break the continuity of the period of disability if the disability continues fourteen days after the injury occurs.

((~~(6)~~)) (5) Should a worker suffer a temporary total disability and should his or her employer at the time of the injury continue to pay him or her the wages which he or she was earning at the time of such injury, such injured worker shall not receive any payment provided in subsection (1) of this section during the period his or her employer shall so pay such wages.

((~~(7)~~)) (6) In no event shall the monthly payments provided in this section exceed ((~~seventy-five~~)) two hundred percent of the average monthly wage in the state as computed under the provisions of RCW 51.08.018.

(7) A worker receiving temporary total disability payment shall have the right to require, for the duration of the worker's temporary total disability, his or her employer to continue to provide medical or disability coverage under the group medical policy or plan provided by the employer at the time he or she was injured. The employer may require such employee to pay a part or all of the premium if co-payment is included in the current policy or plan. Co-payment, in this instance, shall not exceed the ratio otherwise provided for.

NEW SECTION. Sec. 44. A new section is added to chapter 51.32 RCW to read as follows:

(1) A primary purpose of this title is the restoration of the occupationally injured or diseased worker to gainful employment as soon as possible. The goal is to restore the disabled worker to his or her pre-injury employment or, if that is not possible, then to an employment as similar as possible to that which he or she was performing prior to the occupational injury or disease, or to an employment for which there has been previous training or experience. When the need for physical or vocational rehabilitation, or both, exists, it shall be the obligation of the insurer to promptly and directly provide such services to the full extent necessary. Further, the employer shall assist the insurer in returning the worker to his or her pre-injury work or to modified work with that employer where such work is available within the worker's capabilities.

(2) Physical rehabilitation services are all those services designed to restore the worker to his or her optimum level of physical recovery.

Vocational rehabilitation services are all those services designed to return the worker to his or her pre-injury job with the same employer, to different or modified work with the same employer, or to a job related to his or her prior training and experience. If none of these goals is attainable, vocational rehabilitation services are also all those services designed to prepare the worker for suitable and available employment in another work field if, as a practical matter and because of physical limitations, this is the only alternative for returning the worker to gainful employment, and to place the worker in a job in such work field.

(3) A worker who has suffered an injury or disease covered by this title shall be entitled to prompt physical rehabilitation services. When as a result of the injury or disease, he or she is found unable to perform the work being done at the time of injury or disease or other work for which he or she has had prior training or experience, he or she shall be entitled to, at the expense of the insurer, all necessary vocational rehabilitation and employment services, including, but not necessarily limited to, evaluation and counseling, job placement help, job modification, on-the-job training, and, if necessary, a formal retraining program.

(4) There is established a medical care and rehabilitation section within the division of industrial insurance which shall be headed by a qualified rehabilitation administrator. This section shall utilize, but not be limited to, qualified specialists in medical and vocational rehabilitation, evaluation and counseling, job placement, job modification, and vocational training.

The medical care and rehabilitation section shall continuously study the problems of rehabilitation, both physical and vocational, and shall continuously monitor the entire workers' compensation system to determine the most effective methods to achieve the primary objective of restoration of the occupationally injured or diseased worker to gainful employment as soon as possible. This section shall also investigate and maintain a directory of all rehabilitation services and facilities, both private and public. The division of industrial insurance shall, through the medical care and rehabilitation section, approve as qualified such facilities, institutions, and services as are capable of providing competent rehabilitation service to injured workers. No facility or institution shall be considered qualified unless it is staffed with trained and qualified personnel, and, with respect to physical rehabilitation, unless it is supervised by a physician qualified to render such service.

(5) If rehabilitation services are not voluntarily offered and accepted, the director, on his own motion or on request of the worker, employer, or insurer, shall have an investigation performed by the medical care and rehabilitation section to determine the practicability of, need for, and kind of services or training necessary and appropriate to render the worker fit for a gainful occupation. After affording the parties an opportunity to present pertinent information and upon receipt of the rehabilitation section's report, the director may make appropriate orders for the provision of such services as may be reasonable and necessary.

(6) If efforts to restore the worker to a gainful occupation by reemployment with the former employer, or through placement services, job modification, or on-the-job training, are not successful and a formal retraining program is deemed necessary and likely to restore the worker to gainful employment, the worker shall be entitled to continuation of temporary total disability compensation under RCW 51.32.090 and the cost of books, fees, supplies, and equipment while actively and successfully undergoing such formal retraining program.

(7) Where vocational rehabilitation requires the worker to reside away from his or her customary residence, the reasonable cost of board, lodging, or travel shall also be paid by the employer or insurer.

(8) Unreasonable refusal of a worker to accept or complete physical or vocational rehabilitation or to accept employment in a position for which he or she has received training and which he or she is physically able to perform shall result in loss of compensation for the period of such refusal.

(9) Determination of a worker's permanent disability pursuant to the provisions of RCW 51.32.055 shall not be made until after completion of the worker's vocational rehabilitation program under this section and after his or her condition becomes fixed.

(10) In order to effectively supervise the quality of, and coordinate the provision of, medical care, rehabilitation, and reemployment services, the medical care and rehabilitation section must be continuously aware of the status of injured workers who may be in need of the various kinds of these services. Therefore, as soon as it appears that an occupationally disabled worker will not be able to return to his or her pre-injury employment or to other work for which he or she has previous training or experience, but in any case not later than sixty days of consecutive total disability, the employer or insurer shall file a completed rehabilitation report with the medical care and rehabilitation section, on a form as promulgated by said section, which will provide information as to the disabled worker's medical condition, rehabilitation needs, and prospective employment situation.

(11) Physicians responsible for the care and treatment of occupationally injured or diseased workers shall report to the insurer within fourteen days after commencement of treatment all cases where it appears that the worker will not be able to return to his or her former employment within thirty days after such commencement of treatment.

(12) The director may promulgate rules, in accordance with the requirements of the administrative procedure act, chapter 34.04 RCW, to implement and achieve the purposes and goals of this section.

Sec. 45. Section 11, chapter 14, Laws of 1980 and RCW 51.32.110 are each amended to read as follows:

Any worker entitled to receive any benefits or claiming such under this title shall, if requested by the department or ((~~self-insurer~~)) insurer, submit himself or herself for medical examination, at a time and from time to time, at a place reasonably convenient for the worker and as may be provided by the rules of the department. If the worker refuses to submit to medical examination, or obstructs the same, or, if any injured worker shall persist in unsanitary or injurious practices which tend to imperil or retard his or her recovery, or shall refuse to submit to such medical or surgical treatment as is reasonably essential to his or her recovery or refuse or obstruct evaluation or examination for the purpose of vocational rehabilitation or does not cooperate in reasonable efforts at such rehabilitation, the department or the ((~~self-insurer~~)) insurer upon approval by the department, with notice to the worker, may suspend any further action on any claim of such worker so long as such refusal, obstruction, noncooperation, or practice continues and reduce, suspend, or deny any compensation for such period: PROVIDED, That the ((~~department or the self-insurer~~)) insurer shall not suspend any further action on any claim of a worker or reduce, suspend, or deny any compensation if a worker has good cause for refusing to submit to or to obstruct any surgery, examination, ((~~evaluation,~~)) treatment or practice requested by the ((~~department~~)) insurer or required under this section. If the worker necessarily incurs traveling expenses in attending for examination or evaluation pursuant to the request of the insurer, or pursuant to the requirement of the department, such traveling expenses shall be repaid to him or her out of the ((~~accident~~)) workers' compensation administrative fund upon proper voucher and audit or shall be repaid by the ((~~self-insurer~~)) insurer, as the case may be.

If the medical examination required by this section causes the worker to be absent from his or her work without pay he or she shall be paid for such time lost in accordance with the schedule of payments provided in RCW 51.32.090 ((~~as amended~~)).

Sec. 46. Section 51.32.130, chapter 23, Laws of 1961 and RCW 51.32.130 are each amended to read as follows:

(1) In case of death or permanent total disability, the monthly payment provided may be converted, in whole or in part, into a lump sum payment, ((~~not in any case to exceed eight thousand five hundred dollars,~~)) equal or proportionate, as the case may be, to the value of the annuity then remaining, to be fixed and certified by the state insurance commissioner, in which event the monthly payments shall cease in whole or in part accordingly or proportionately. Such conversion may be made upon agreement between the applicant and the insurer and only upon written application (in case of minor children the application may be by either parent) to the department and shall rest in the discretion of the department. ((~~Within the rule aforesaid~~)) Under this subsection the amount and value of the lump sum payment may be agreed upon between the ((~~department~~)) insurer and applicant.

(2) In the event any payment shall be due to an alien residing in a foreign country, the ((~~department~~)) insurer, upon approval by the department, may settle the same by making a lump sum payment in such amount as may be agreed to by such alien((~~, not to exceed fifty percent of the value of the annuity then remaining~~)).

(3) Nothing ((~~herein~~)) in this section shall preclude the department from ((~~making~~)) awarding, and authority is hereby given it to ((~~make~~)) award, on its own motion, lump sum payments equal or proportionate, as the case may be, to the value of the annuity then remaining, in full satisfaction of claims due to dependents. Such payment shall be made by the insurer.

Sec. 47. Section 47, chapter 289, Laws of 1971 ex. sess. as last amended by section 3, chapter 20, Laws of 1982 1st ex. sess. and RCW 51.32.190 are each amended to read as follows:

(1) If the ((~~self-insurer~~)) insurer denies a claim for compensation, written notice of such denial, clearly informing the claimant of the reasons therefor and that the director will rule on the matter shall be mailed or given to the claimant and the director within thirty days after the ((~~self-insurer~~)) insurer has notice of the claim.

(2) Until such time as the department has entered an order in a disputed case acceptance of compensation by the claimant shall not be considered a binding determination of his or her rights under this title. Likewise the payment of compensation shall not be considered a binding determination of the obligations of the ((~~self-insurer~~)) insurer as to future compensation payments.

(3) Upon making the first payment of income benefits, and upon stopping or changing of such benefits except where a determination of the permanent disability has been made as elsewhere provided in this title, the ((~~self-insurer~~)) insurer shall immediately notify the director in accordance with a form to be prescribed by the director that the payment of income benefits has begun or has been stopped or changed. Where temporary disability compensation is payable, the first payment thereof shall be made, in person or by mail, within fourteen days after ((~~notice~~)) receipt of claim by the insurer and shall continue at regular semimonthly or biweekly intervals.

(4) If, after the payment of compensation without an award, the ((~~self-insurer~~)) insurer elects to controvert the right to compensation, the payment of compensation shall not be considered a binding determination of the obligations of the ((~~self-insurer~~)) insurer as to future compensation payments. The acceptance of compensation by the worker or his or her beneficiaries shall not be considered a binding determination of their rights under this title.

(5) The director (a) may, upon his or her own initiative at any time in a case in which payments are being made without an award, and (b) shall, upon receipt of information from any person claiming to be entitled to compensation, from the ((~~self-insurer~~)) insurer, or otherwise that the right to compensation is controverted, or that payment of compensation has been opposed, stopped or changed, whether or not claim has been filed, promptly make such inquiry as circumstances require, cause such medical examinations to be made, hold such hearings, require the submission of further information, make such orders, decisions or awards, and take such further action as he or she considers will properly determine the matter and protect the rights of all parties.

(6) The director, upon his or her own initiative, may make such inquiry as circumstances require or is necessary to protect the rights of all the parties and he or she may enact rules and regulations providing for procedures to ensure fair and prompt handling by ((~~self-insurers~~)) insurers of the claims of workers and beneficiaries.

Sec. 48. Section 48, chapter 289, Laws of 1971 ex. sess. and RCW 51.32.200 are each amended to read as follows:

(1) If ((~~a self-insurer~~)) an insurer fails, refuses, or neglects to comply with a compensation order ((~~which~~)) within fifteen days from the date such order has become final and ((is)) not subject to review or appeal, the director or any person entitled to compensation under the order may institute proceedings for injunctive or other appropriate relief for enforcement of the order. These proceedings may be instituted in the superior court for the county in which the claimant resides, or, if the claimant is not then a resident of this state, in the superior court for the county in which the ((~~self-insurer~~)) insurer may be served with process.

(2) The court shall enforce obedience to the order by proper means, enjoining compliance upon the person obligated to comply with the compensation order. The court may issue such writs and processes as are necessary to carry out its orders and shall order the insurer to pay all costs of action, including reasonable attorney's fees.

(3) In addition to any other remedies provided in this section, the insurer shall be ordered to pay the person entitled to compensation a penalty in the amount of one hundred percent of the amount specified in the compensation order unless such payment has been previously ordered pursuant to RCW 51.48.017.

((~~(3)~~)) (4) A proceeding under this section does not preclude other methods of enforcement provided for in ((~~this title~~)) law.

NEW SECTION. Sec. 49. A new section is added to chapter 51.32 RCW to read as follows:

Upon presentation of evidence indicating a change in condition, the department shall reexamine not more than once annually each case of permanent total disability for which any insurer has current payment responsibility to determine if the worker remains permanently incapacitated from performing any work at any gainful occupation.

Sec. 50. Section 51.36.020, chapter 23, Laws of 1961 as last amended by section 12, chapter 63, Laws of 1982 and RCW 51.36.020 are each amended to read as follows:

(1) When the injury to any worker is so serious as to require his or her being taken from the place of injury to a place of treatment, his or her employer shall, at the expense of the ((~~medical aid fund, or self-insurer, as the case may be~~)) insurer, furnish transportation to the nearest place of proper treatment.

(2) Every worker whose injury results in the loss of one or more limbs or eyes shall be provided with proper artificial substitutes and every worker, who suffers an injury to an eye producing an error of refraction, shall be once provided proper and properly equipped lenses to correct such error of refraction and his or her disability rating shall be based upon the loss of sight before correction.

(3) Every worker whose accident results in damage to or destruction of an artificial limb, eye, or tooth, shall have same repaired or replaced.

(4) Every worker whose hearing aid ((or)), eyeglasses, or corrective lenses are damaged, destroyed, or lost as a result of an industrial accident shall have the same restored or replaced. The ((~~department or self-insurer~~)) insurer shall be liable only for the cost of restoring damaged hearing aids or eyeglasses to their condition at the time of the accident.

(5) All mechanical appliances necessary in the treatment of an injured worker, such as braces, belts, casts, and crutches, shall be provided and all mechanical appliances required as permanent equipment after treatment has been completed shall continue to be provided or replaced without regard to the date of injury or date treatment was completed, notwithstanding any other provision of law.

(6) A worker, whose injury is of such short duration as to bring him or her within the time limit provisions of RCW 51.32.090, shall nevertheless receive during the omitted period medical, surgical, and hospital care and service and care provided by those practitioners licensed pursuant to chapters 18.22, 18.25, 18.32, 18.53, 18.71, and 18.88 RCW and transportation under the provisions of this chapter.

(7) Whenever in the sole discretion of the supervisor it is reasonable and necessary to provide residence modifications necessary to meet the needs and requirements of the worker who has sustained catastrophic injury, the ((~~department or self-insurer~~)) insurer may be ordered to pay an amount not to exceed the state's average annual wage for one year as determined under RCW 50.04.355((~~, as now existing or hereafter amended,~~)) toward the cost of such modifications or construction. Such payment shall only be made for the construction or modification of a residence in which the injured worker resides. Only one residence of any worker may be modified or constructed under this subsection, although the supervisor may order more than one payment for any one home, up to the maximum amount permitted by this section.

(8) Whenever in the sole discretion of the supervisor it is reasonable and necessary to modify a motor vehicle owned by a worker who has become an amputee or becomes paralyzed because of an industrial injury, the supervisor may order up to fifty percent of the state's average annual wage for one year, as determined under RCW 50.04.355((~~, as now existing or hereafter amended,~~)) to be paid by the ((~~department or self-insurer~~)) insurer toward the costs thereof.

(9) The benefits provided by subsections (7) and (8) of this section are available to any otherwise eligible worker regardless of the date of industrial injury.

Sec. 51. Section 52, chapter 289, Laws of 1971 ex. sess. as amended by section 1, chapter 42, Laws of 1979 ex. sess. and RCW 51.36.050 are each amended to read as follows:

The department may operate and control a rehabilitation center and may contract with ((~~self-insurers~~)) insurers, and any other persons who may be interested, for use of any such center on such terms as the director deems reasonable.

Sec. 52. Section 53, chapter 289, Laws of 1971 ex. sess. as amended by section 15, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.36.060 are each amended to read as follows:

Physicians and those practitioners licensed pursuant to chapters 18.22, 18.25, 18.32, 18.53, 18.57, 18.71, and 18.88 RCW examining or attending injured ((~~workmen~~)) workers under this title shall comply with rules and regulations adopted by the director, and shall make such reports as may be requested by the department or ((~~self-insurer~~)) insurer upon the condition or treatment of any such ((~~workman~~)) worker, or upon any other matters concerning such ((~~workmen~~)) workers in their care. All medical information in the possession or control of any person and relevant to the particular injury, in the opinion of the department or insurer, pertaining to any ((~~workman~~)) worker whose injury or occupational disease is the basis of a claim under this title shall be made available at any stage of the proceedings to the employer, the claimant's representative, the insurer, and the department upon request, and no person shall incur any legal liability by reason of releasing such information.

Sec. 53. Section 54, chapter 289, Laws of 1971 ex. sess. as amended by section 60, chapter 350, Laws of 1977 ex. sess. and RCW 51.36.070 are each amended to read as follows:

Whenever the director or the ((~~self-insurer~~)) insurer deems it necessary in order to resolve any medical issue, a worker shall submit to examination by a physician or physicians, or practitioner(s) licensed pursuant to chapters 18.22, 18.25, 18.32, 18.53, 18.57, 18.71, and 18.88 RCW, selected by the director or the insurer, with the rendition of a report to the person ordering the examination. The director, in his or her discretion, may charge the cost of such examination or examinations to the ((~~self-insurer~~)) insurer or to the ((~~medical aid~~)) workers' compensation administrative fund, as the case may be. The cost of said examination shall include payment to the worker of reasonable expenses connected therewith. If the medical examination required by this section causes the worker to be absent from his or her work without pay, he or she shall be paid for such time lost in accordance with the applicable provisions of this title.

Sec. 54. Section 55, chapter 289, Laws of 1971 ex. sess. and RCW 51.36.080 are each amended to read as follows:

All fees and medical charges under this title shall conform to regulations promulgated by the director.

Payment of the billings for such fees and charges shall be made by the insurer within thirty days from receipt of the billing. Where the insurer, within said period, contests the reasonableness, correctness, or necessity for incurring such fees and charges, payment thereof shall be made within twenty days of the issuance of a final order of the director, the appeals board, or the court, as the case may be, in directing payment. Unreasonable delay in making payment within the times specified herein shall subject the insurer to a penalty imposed by the director of up to ten percent of the billed sum then unpaid which shall be added to the billed sum together with interest thereon at the rate of twelve percent per annum.

Sec. 55. Section 51.44.010, chapter 23, Laws of 1961 and RCW 51.44.010 are each amended to read as follows:

There shall be, in the office of the state treasurer, a fund to be ((~~known and~~)) designated as the ((~~"accident fund."~~)) "state workers' compensation fund," also known as the "state fund." The manager shall be the administrator thereof.

Sec. 56. Section 51.44.070, chapter 23, Laws of 1961 as last amended by section 1, chapter 312, Laws of 1983 and RCW 51.44.070 are each amended to read as follows:

(1) For every case resulting in death or permanent total disability ((~~the department shall transfer on its books from the accident fund of the proper class and/or appropriate account to the "reserve fund"~~)), a self-insurer shall pay into the workers' compensation administrative fund a sum of money for that case equal to the estimated present cash value of the monthly payments provided for it, to be calculated upon the basis of an annuity covering the payments in this title provided to be made for the case. Such annuity values shall be based upon rates of mortality, disability, remarriage, and interest as determined by the state insurance commissioner, taking into account the experience of the reserve fund in such respects.

((~~Similarly, a self-insurer in these circumstances shall pay into the reserve fund a sum of money computed in the same manner, and the disbursements therefrom shall be made as in other cases.~~

(2) As an alternative to payment procedures otherwise provided under law, in the event of death or permanent total disability to workers of self-insured employers, a self-insured employer may upon establishment of such obligation file with the department a bond, or an assignment of account from a federally or state chartered commercial banking institution authorized to conduct business in the state of Washington, in an amount deemed by the insurance commissioner to be reasonably sufficient to insure payment of the pension benefits provided by law. The department shall adopt rules governing assignments of account. Such rules shall ensure that the funds are available if needed, even in the case of failure of the banking institution or of the employer's business.

The annuity value for every such case shall be determined by the insurance commissioner based upon the commissioner's experience as to rates of mortality, disability, remarriage, and interest. The amount of the required bond or assignment of account may be reviewed and adjusted periodically by the department, based upon periodic redeterminations by the insurance commissioner as to the outstanding annuity value for the case.

Under such alternative, the department shall make the monthly payments from the pension reserve fund for the benefits provided for by RCW 51.32.050 and 51.32.060 to the self-insured beneficiary or beneficiaries and the department shall be reimbursed for all such payments from the particular self-insured employer through periodic charges not less than quarterly in a manner to be determined by the director.

Any self-insured employer electing this alternative method of providing for payment to the beneficiary or beneficiaries shall additionally pay to the department a deposit equal to the first three months' payments otherwise required under RCW 51.32.050 and 51.32.060. Such deposit shall be placed in the reserve fund in accordance with RCW 51.44.140 and shall be returned to the respective self-insured employer when monthly payments are no longer required for such particular obligation.

If a self-insurer delays or refuses to reimburse the department beyond fifteen days after the reimbursement charges become due, there shall be a penalty paid by the self-insurer upon order of the director of an additional amount equal to twenty-five percent of the amount then due which shall be paid into the pension reserve fund. Such an order shall conform to the requirements of RCW 51.52.050.)) The self-insurer shall have an account within the workers' compensation administrative fund, and the department shall make disbursements therefrom to beneficiaries or workers in the monthly amounts provided for by RCW 51.32.050 and 51.32.060. Each such account shall be credited with its proportionate share of interest or other earnings, if any. Each such self-insurer's account shall be examined by the insurance commissioner to ascertain its standing as of each June 30th of each year and the relation of its outstanding annuities at their then-value on the bases currently employed for new cases to the cash on hand or at interest belonging to the account. He shall promptly report the result of his examination to the department and to the state treasurer in writing not later than September 30th, following. If the report shows that there was as of such June 30th in the account in cash or at interest a greater sum than the then-annuity value of the outstanding pension obligations, the surplus shall be forthwith returned to the self-insurer, but if the report shows the contrary condition of the account, the deficiency shall be forthwith made good to the account by the self-insurer.

NEW SECTION. Sec. 57. A new section is added to chapter 51.44 RCW to read as follows:

There shall be, in the office of the state treasurer, a fund to be known and designated as the "workers' compensation administrative fund." The director shall be the administrator thereof. The workers' compensation administrative fund is established to provide for the payment of all expenses of the department and the board of industrial insurance appeals with respect to the administration of their respective duties under this title and for the other purposes provided under this title. There shall be one appropriation for the department, and a separate appropriation for the board. Any money appropriated from the general fund for the uses and purposes of the administrative fund shall be placed therein.

NEW SECTION. Sec. 58. A new section is added to chapter 51.44 RCW to read as follows:

(1) The director shall impose and collect assessments each fiscal year upon all insurers in the amount of the estimated costs of administering this title during such fiscal year. The assessments shall be paid into the workers' compensation administrative fund. The costs shall be estimated and prorated as provided in this section. The time and manner of imposing and collecting assessments due the administrative fund shall be set forth in rules promulgated by the director in accordance with chapter 34.04 RCW.

(2) The total costs of administering this title during the fiscal year shall be estimated by the director using the actual costs of the preceding fiscal year as the base. The administrative costs incurred during the preceding fiscal year shall be determined by the director as soon as practicable after every June 30th. An itemized statement of the expenses so determined, and the estimate for the next fiscal year, shall be kept open to public inspection in the principal office of the director for at least thirty days after notice to all insurers affected thereby. The director shall make no assessments under this section until the statement required by this subsection has been open to inspection for at least thirty days.

(3) The assessment upon each insurer shall be in the same proportion to the administrative costs to be apportioned as the adjusted premiums charged by the insurer computed under subsection (4) of this section bear to the total adjusted premiums charged in the state of Washington by all insurers during the preceding fiscal year.

(4) As used in this section, "adjusted premium" means:

(a) In the case of insurers and the state fund, the gross direct premium received for workers' compensation insurance under this title, less premiums returned, earned premium deposits, and dividends or savings actually paid or credited, determined in accordance with uniform rules promulgated by the director upon consultation with the insurance commissioner; and

(b) In the case of self-insurers, the premium, which shall include the deductions authorized in paragraph (a) of this subsection and which is estimated each self-insurer would have paid had it secured its liability under this title either through the state fund or by private insurance (whichever would have provided the lower rate), determined by the director on the basis of uniform rules promulgated upon consultation with the insurance commissioner.

(5) Any insurer, other than self-insurers, liable for an assessment under this section shall apply such assessment as a credit to any other assessment or further tax or taxes upon such insurer's workers' compensation premiums in this state: PROVIDED, That such credit shall not exceed one percent of an insurer's taxable workers' compensation premiums in this state: PROVIDED FURTHER, That in no event shall any annual assessment assessed pursuant to this section exceed four percent of the total taxable workers' compensation premiums in this state for the year immediately preceding such assessment.

(6) Any part of the assessment resulting from or anticipated for expenditures from the workers' compensation administrative fund which arise from the uncorrected default of a self-insurer or a self-insured group pursuant to section 18 of this act shall not be included in the assessment against insurers other than self-insurers and self-insured groups.

NEW SECTION. Sec. 59. A new section is added to chapter 51.44 RCW to read as follows:

The manager of the state fund shall transfer as a loan, bearing interest at the rate then current for thirty months' United States treasury notes, to the workers' compensation administrative fund in the first year of its operation an amount to be determined by the director to be necessary to initiate the functioning of the fund, in addition to current self-insurer assessments. The first transfer shall be made on the effective date of this act. Such loan shall be repaid as soon as practicable, but in no event shall such repayment take more than ten years, from revenues collected pursuant to the assessments authorized by section 58 of this act.

Sec. 60. Section 51.48.010, chapter 23, Laws of 1961 as last amended by section 20, chapter 63, Laws of 1982 and RCW 51.48.010 are each amended to read as follows:

Every employer shall be liable for the penalties described in this title and may also be liable if an injury or occupational disease has been sustained by a worker prior to the time he or she has secured the payment of such compensation to a penalty in a sum ((~~not less than fifty percent nor more than one hundred percent of~~)) equal to ten times the cost for such injury or occupational disease, for the benefit of the workers' compensation administrative fund. Any employer who has failed to secure payment of compensation for his or her workers covered under this title may also be liable to a maximum penalty in a sum of two hundred dollars or in a sum double the amount of premiums incurred prior to securing payment of compensation under this title, whichever is greater, for the benefit of the medical aid fund.

Sec. 61. Section 62, chapter 289, Laws of 1971 ex. sess. and RCW 51.48.015 are each amended to read as follows:

Any employer who engages in work who has wilfully failed to secure the payment of compensation under this title shall be guilty of a misdemeanor. Violation of this section is punishable, upon conviction, by a fine of not less than twenty-five dollars nor more than one hundred dollars. Each day such person engages as a subject employer in violation of this section constitutes a separate offense. Any fines paid pursuant to this section shall be paid directly by the court to the director for deposit in the ((~~medical aid~~)) workers' compensation administrative fund.

Sec. 62. Section 66, chapter 289, Laws of 1971 ex. sess. and RCW 51.48.017 are each amended to read as follows:

If ((~~a self-insurer~~)) an insurer unreasonably delays or refuses to pay benefits as they become due there shall be paid by the ((~~self-insurer~~)) insurer upon order of the director an additional amount equal to ((~~twenty-five percent of~~)) ten times the amount then due which shall accrue for the benefit of the claimant and shall be paid to him with the benefits which may be assessed under this title, unless such payment has been previously ordered pursuant to RCW 51.32.200. Such an order shall conform to the requirements of RCW 51.52.050.

Sec. 63. Section 51.48.020, chapter 23, Laws of 1961 as last amended by section 22, chapter 323, Laws of 1977 ex. sess. and RCW 51.48.020 are each amended to read as follows:

(1) Any employer, who intentionally misrepresents to ((~~the department~~)) an insurer the amount of his or her payroll upon which the premium under this title is based, shall be civilly liable to the ((~~state in~~)) workers' compensation administrative fund for damages of ten times the amount of the difference in premiums paid and the amount the employer should have paid and for the reasonable expenses of auditing his or her books and collecting such sums. ((~~Such liability may be enforced in the name of the department.~~)) Such an employer shall also be guilty of a class C felony if such misrepresentations are made knowingly, if the amount of the difference in premiums is five hundred dollars or more and shall be guilty of a gross misdemeanor if such amount is less than five hundred dollars.

(2) Any person claiming benefits under this title, who knowingly gives false information required in any claim or application under this title shall be guilty of a class C felony when such claim or application involves an amount of five hundred dollars or more. When such claim or application involves an amount less than five hundred dollars, the person giving such information shall be guilty of a gross misdemeanor.

Sec. 64. Section 51.48.040, chapter 23, Laws of 1961 and RCW 51.48.040 are each amended to read as follows:

The books, records, and payrolls of the employer pertinent to the administration of this title shall always be open to inspection by the department or its traveling auditor, agent, or assistant, and to the employer's insurer for the purpose of ascertaining the correctness of the payroll, the ((~~men~~)) workers employed, and such other information as may be necessary for the insurer and the department and its management under this title. Refusal on the part of the employer to submit his or her books, records, and payrolls for such inspection to the department((,)) or any assistant presenting written authority from the director((,)) or to any authorized representative of an insurer shall subject the offending employer to a civil penalty of one hundred dollars for each offense and the individual who personally gives such refusal shall be guilty of a misdemeanor.

Sec. 65. Section 13, chapter 14, Laws of 1980 and RCW 51.48.050 are each amended to read as follows:

It shall be unlawful for any employer to directly or indirectly demand or collect from any of his or her workers any sum of money whatsoever for or on account of medical, surgical, hospital, or other treatment or transportation of injured workers, ((~~other than as specified in RCW 51.16.140,~~)) and any employer who directly or indirectly violates the foregoing provisions of this section shall be liable to the state for the benefit of the ((~~medical aid~~)) workers' compensation administrative fund in ten times the amount so demanded or collected, and such employer and every officer, agent, or servant of such employer knowingly participating therein shall also be guilty of a misdemeanor.

Sec. 66. Section 51.48.090, chapter 23, Laws of 1961 and RCW 51.48.090 are each amended to read as follows:

Civil penalties to the state under this title shall be collected by civil action in the name of the state and paid into the ((~~accident~~)) workers' compensation administrative fund unless a different fund is designated.

Sec. 67. Section 65, chapter 289, Laws of 1971 ex. sess. and RCW 51.48.110 are each amended to read as follows:

Where death results from the injury and the deceased leaves no beneficiaries, ((~~a self-insurer~~)) an insurer shall pay into the supplemental pension fund the sum of ((~~ten~~)) twenty thousand dollars.

NEW SECTION. Sec. 68. The exercise of the following functions may begin on the effective date of this section:

(1) Adoption of rules authorized by sections 7, 9 through 15, 21, 29, 42, 44, and 58 of this act;

(2) Qualification of insurers to write workers' compensation insurance;

(3) Computation of assessments, if any, to be imposed under sections 58 and 59 of this act payable after the effective date of this act, and based upon estimated expenses of the administrative fund and estimated assessments therefor;

(4) Inspection of the industrial insurance division's accident experience records by a bona fide rating organization; and

(5) Appointment of an interim manager by the governor, and permitting the manager and the director to do all things necessary for the transfer of funds, functions, and personnel as required.

Sec. 69. Section 51.04.020, chapter 23, Laws of 1961 as last amended by section 77, chapter 75, Laws of 1977 and RCW 51.04.020 are each amended to read as follows:

The director shall:

(1) Establish and promulgate rules governing the administration of this title;

(2) ((~~Ascertain and establish the amounts to be paid into and out of the accident fund;~~

~~(3)~~)) Regulate the proof of accident and extent thereof, the proof of death and the proof of relationship and the extent of dependency;

((~~(4)~~)) (3) Supervise the medical, surgical, and hospital treatment to the intent that it may be in all cases efficient and up to the recognized standard of modern surgery, and supervise and regulate the claims handling practices of all insurers to achieve the intent that such practices provide prompt and fair claims services to injured workers and beneficiaries;

((~~(5)~~)) (4) Issue proper receipts for moneys received and certificates for benefits accrued or accruing;

((~~(6)~~)) (5) Investigate the cause of all serious injuries and report to the governor from time to time any violations or laxity in performance of protective statutes or regulations coming under the observation of the department;

((~~(7)~~)) (6) Create a division of statistics within which shall be compiled such statistics as will afford reliable information upon which to base operations of all divisions under the department;

((~~(8)~~)) (7) Make an annual report to the governor of the workings of the department;

((~~(9)~~)) (8) Be empowered to enter into agreements with the appropriate agencies of other states relating to conflicts of jurisdiction where the contract of employment is in one state and injuries are received in the other state, and insofar as permitted by the Constitution and laws of the United States, to enter into similar agreements with the provinces of Canada.

Sec. 70. Section 1, chapter 14, Laws of 1980 and RCW 51.04.030 are each amended to read as follows:

The director shall, through the division of industrial insurance, supervise the providing of prompt and efficient care and treatment, including care provided by physicians' assistants governed by the provisions of chapters 18.57A and 18.71A RCW, acting under a supervising physician to workers injured during the course of their employment at the least cost consistent with promptness and efficiency, without discrimination or favoritism, and with as great uniformity as the various and diverse surrounding circumstances and locations of industries will permit and to that end shall, from time to time, establish and promulgate and supervise the administration of printed forms, rules, regulations, and practices for the furnishing of such care and treatment.

The director shall make and, from time to time, change as may be, and promulgate a fee bill of the maximum charges to be made by any physician, surgeon, hospital, druggist, physicians' assistants as defined in chapters 18.57A and 18.71A RCW, acting under a supervising physician or other agency or person rendering services to injured workers. No service covered under this title shall be charged or paid at a rate or rates exceeding those specified in such fee bill, and no contract providing for greater fees shall be valid as to the excess.

The ((~~director or self-insurer, as the case may be,~~)) insurer shall make a record of the commencement of every disability and the termination thereof and, when bills are rendered for the care and treatment of injured workers, shall approve and pay those which conform to the promulgated rules, regulations, and practices of the director and may reject any bill or item thereof incurred in violation of the principles laid down in this section or the rules and regulations promulgated under it.

Sec. 71. Section 51.04.040, chapter 23, Laws of 1961 as amended by section 1, chapter 323, Laws of 1977 ex. sess. and RCW 51.04.040 are each amended to read as follows:

The director shall have power to issue subpoenas to enforce the attendance and testimony of witnesses and the production and examination of books, papers, photographs, tapes, and records before the department in connection with any ((~~claim made to~~)) controverted matter before, or inquiry made by, the department, or the assessment or collection of ((~~premiums~~)) moneys due the department under this title. The superior court shall have the power to enforce any such subpoena by proper proceedings.

Sec. 72. Section 2, chapter 14, Laws of 1980 and RCW 51.04.070 are each amended to read as follows:

A minor shall be deemed sui juris for the purpose of this title, and no other person shall have any cause of action or right to compensation for an injury to such minor worker, except as expressly provided in this title, but in the event of any disability payments becoming due under this title to a minor worker, under the age of eighteen, such disability payments shall be paid to his or her parent, guardian or other person having legal custody of his or her person until he or she reaches the age of eighteen. Upon the submission of written authorization by any such parent, guardian, or other person, any such disability payments may be paid directly to such injured worker under the age of eighteen years. If it is necessary to appoint a legal guardian to receive such disability payments, there shall be paid ((~~from the accident fund or~~)) by the ((~~self-insurer, as the case may be,~~)) insurer toward the expenses of such guardianship a sum not to exceed three hundred dollars.

Sec. 73. Section 26, chapter 323, Laws of 1977 ex. sess. and RCW 51.04.085 are each amended to read as follows:

((~~The department~~)) An insurer may, at any time, on receipt of written authorization, transmit amounts payable to a claimant, beneficiary, or any supplier of goods or services to the account of such person in a bank or other financial institution regulated by state or federal authority.

Sec. 74. Section 3, chapter 107, Laws of 1961 as last amended by section 15, chapter 111, Laws of 1979 and RCW 51.08.013 are each amended to read as follows:

"Acting in the course of employment" means the worker acting at his or her employer's direction or in the furtherance of his or her employer's business which shall include time spent going to and from work on the jobsite, as defined in RCW 51.32.015 and 51.36.040, insofar as such time is immediate to the actual time that the worker is engaged in the work process in areas controlled by his or her employer, except parking areas, and it is not necessary that at the time an injury is sustained by a worker he or she be doing the work on which his or her compensation is based or that the event be within the time limits on which ((~~industrial insurance or medical aid~~)) premiums or assessments are paid. The term shall not include time spent going to or coming from the employer's place of business in commuter ride sharing, as defined in RCW 46.74.010(1), notwithstanding any participation by the employer in the ride-sharing arrangement.

Sec. 75. Section 51.08.015, chapter 23, Laws of 1961 as last amended by section 9, chapter 350, Laws of 1977 ex. sess. and RCW 51.08.015 are each amended to read as follows:

Wherever and whenever in any of the provisions of this title relating to any payments by an employer or worker or insurer to the department, the words "amount" and/or "amounts," "payment" and/or "payments," ((~~"premium" and/or "premiums,"~~)) "contribution" and/or "contributions," and "assessment" and/or "assessments" appear said words shall be construed to mean taxes, which are the money payments by an employer or worker or insurer which are required by this title to be made to the state treasury for the ((~~accident~~)) workers' compensation administrative fund, ((~~the medical aid fund,~~)) the supplemental pension fund, the second injury fund, or any other fund created by this title which is administered by the director.

Sec. 76. Section 51.12.050, chapter 23, Laws of 1961 as last amended by section 18, chapter 350, Laws of 1977 ex. sess. and RCW 51.12.050 are each amended to read as follows:

Whenever the state, county, any municipal corporation, or other taxing district shall engage in any work, or let a contract therefor, in which workers are employed for wages, this title shall be applicable thereto. The employer's payments ((~~into the accident fund~~)) of premiums shall be made from the treasury of the state, county, municipality, or other taxing district. If the work is being done by contract, the payroll of the contractor and the subcontractor shall be the basis of computation and, in the case of contract work consuming less than one year in performance, the required payment ((~~into the accident fund~~)) of premiums shall be based upon the total payroll. The contractor and any subcontractor shall be subject to the provisions of this title, and the state for its general fund, the county, municipal corporation, or other taxing district shall be entitled to collect from the contractor the full amount payable ((~~to the accident fund~~)) in premiums and the contractor, in turn, shall be entitled to collect from the subcontractor his or her proportionate amount of the payment.

Whenever and so long as, by state law, city charter, or municipal ordinance, provision is made for employees or peace officers injured in the course of employment, such employees shall not be entitled to the benefits of this title and shall not be included in the payroll of the municipality under this title: PROVIDED, That whenever any state law, city charter, or municipal ordinance only provides for payment to the employee of the difference between his or her actual wages and that received under this title such employees shall be entitled to the benefits of this title and may be included in the payroll of the municipality.

Sec. 77. Section 6, chapter 14, Laws of 1980 as amended by section 17, chapter 63, Laws of 1982 and RCW 51.12.110 are each amended to read as follows:

Any employer who has in his or her employment any person or persons excluded from mandatory coverage pursuant to RCW 51.12.020 (1), (2), (3), (4), (6), (7), (8), or (9) may file notice in writing with the ((~~director~~)) insurer, on such forms as the department may provide, of his or her election to make such persons otherwise excluded subject to this title. The employer shall forthwith display in a conspicuous manner about his or her works, and in a sufficient number of places to reasonably inform his or her workers of the fact, printed notices furnished by the ((~~department~~)) insurer in a form substantially identical to a form prescribed by the director stating that he or she has so elected. Said election shall become effective upon the filing of said notice in writing. The employer and his or her workers shall be subject to all the provisions of this title and entitled to all of the benefits thereof: PROVIDED, That those who have heretofore complied with the foregoing conditions and are carried and considered ((~~by the department~~)) as within the purview of this title shall be deemed and considered as having fully complied with its terms and shall be continued ((~~by the department~~)) as entitled to all of the benefits and subject to all of the liabilities without other or further action. Any employer who has complied with this section may withdraw his or her acceptance of liability under this title by filing written notice with the ((~~director~~)) insurer of the withdrawal of his or her acceptance. Such withdrawal shall become effective thirty days after the filing of such notice or on the date of the termination of the security for payment of compensation, whichever last occurs. The employer shall, at least thirty days before the effective date of the withdrawal, post reasonable notice of such withdrawal where the affected worker or workers work and shall otherwise notify personally the affected workers. Withdrawal of acceptance of this title shall not affect the liability of the ((~~department or self-insurer~~)) insurer for compensation for any injury occurring during the period of acceptance.

The department shall have the power to cancel the elective adoption coverage if any required payments or reports have not been made. Cancellation by the department shall be no later than thirty days from the date of notice in writing by the department advising of cancellation being made.

Sec. 78. Section 82, chapter 289, Laws of 1971 ex. sess. as last amended by section 23, chapter 350, Laws of 1977 ex. sess. and RCW 51.12.120 are each amended to read as follows:

(1) If a worker, while working outside the territorial limits of this state, suffers an injury on account of which he or she, or his or her beneficiaries, would have been entitled to compensation under this title had such injury occurred within this state, such worker, or his or her beneficiaries, shall be entitled to compensation under this title: PROVIDED, That if at the time of such injury:

(a) His or her employment is principally localized in this state; or

(b) He or she is working under a contract of hire made in this state for employment not principally localized in any state; or

(c) He or she is working under a contract of hire made in this state for employment principally localized in another state whose workers' compensation law is not applicable to his or her employer; or

(d) He or she is working under a contract of hire made in this state for employment outside the United States and Canada.

(2) The payment or award of compensation under the workers' compensation law of another state, territory, province, or foreign nation to a worker or his or her beneficiaries otherwise entitled on account of such injury to compensation under this title shall not be a bar to a claim for compensation under this title: PROVIDED, That claim under this title is timely filed. If compensation is paid or awarded under this title, the total amount of compensation paid or awarded the worker or beneficiary under such other workers' compensation law shall be credited against the compensation due the worker or beneficiary under this title.

(3) If a worker or beneficiary is entitled to compensation under this title by reason of an injury sustained in this state while in the employ of an employer who is domiciled in another state and who has ((~~neither opened an account with the department nor qualified as a self-insurer~~)) not secured the payment of compensation under this title, such an employer or his or her insurance carrier shall file with the director a certificate issued by the agency which administers the workers' compensation law in the state of the employer's domicile, certifying that such employer has secured the payment of compensation under the workers' compensation law of such other state and that with respect to said injury such worker or beneficiary is entitled to the benefits provided under such law. In such event:

(a) The filing of such certificate shall constitute appointment by the employer or his or her insurance carrier of the director as its agent for acceptance of the service of process in any proceeding brought by any claimant to enforce rights under this title;

(b) The director shall send to such employer or his or her insurance carrier, by registered or certified mail to the address shown on such certificate, a true copy of any notice of claim or other process served on the director by the claimant in any proceeding brought to enforce rights under this title;

(c) (i) If such employer is a self-insurer under the workers' compensation law of such other state, such employer shall, upon submission of evidence or security, satisfactory to the director, of his or her ability to meet his or her liability to such claimant under this title, be deemed to be a qualified self-insurer under this title;

(ii) If such employer's liability under the workers' compensation law of such other state is insured, such employer's carrier, as to such claimant only, shall be deemed to be subject to this title: PROVIDED, That unless its contract with said employer requires it to pay an amount equivalent to the compensation benefits provided by this title, the insurer's liability for compensation shall not exceed its liability under the workers' compensation law of such other state;

(d) If the total amount for which such employer's insurer is liable under (c)(ii) above is less than the total of the compensation to which such claimant is entitled under this title, the director may require the employer to file security satisfactory to the director to secure the payment of compensation under this title; and

(e) If such employer has neither qualified as a self-insurer nor secured insurance coverage under the workers' compensation law of another state, such claimant shall be paid compensation by the department;

(f) Any such employer shall have the same rights and obligations as other employers subject to this title and where he or she has not provided coverage or sufficient coverage to secure the compensation provided by this title to such claimant, the director may impose a penalty payable to the department of a sum not to exceed fifty percent of the cost to the department of any deficiency between the compensation provided by this title and that afforded such claimant by such employer or his or her insurance carrier if any.

(4) As used in this section:

(a) A person's employment is principally localized in this or another state when (i) his or her employer has a place of business in this or such other state and he or she regularly works at or from such place of business, or (ii) if clause (i) foregoing is not applicable, he or she is domiciled in and spends a substantial part of his or her working time in the service of his or her employer in this or such other state;

(b) "Workers' compensation law" includes "occupational disease law" for the purposes of this section.

(5) A worker whose duties require him or her to travel regularly in the service of his or her employer in this and one or more other states may agree in writing with his or her employer that his or her employment is principally localized in this or another state, and, unless such other state refuses jurisdiction, such agreement shall govern as to any injury occurring after the effective date of the agreement.

(6) The director shall be authorized to enter into agreements with the appropriate agencies of other states and provinces of Canada which administer their workers' compensation law with respect to conflicts of jurisdiction and the assumption of jurisdiction in cases where the contract of employment arises in one state or province and the injury occurs in another, and when any such agreement has been executed and promulgated as a regulation of the department under chapter 34.04 RCW, it shall bind all employers and workers subject to this title and the jurisdiction of this title shall be governed by this regulation.

Sec. 79. Section 1, chapter 113, Laws of 1977 ex. sess. and RCW 51.12.140 are each amended to read as follows:

(1) As used in this section:

(a) "Municipal corporation" means any city, town, or county authorized by law to maintain and operate a law enforcement department;

(b) "Law enforcement department" means any regularly organized police department, sheriff's department, department of public safety, or other similar organization which has as its primary purpose the enforcement of state or local penal laws and the preservation of public order, which consists wholly of volunteer law enforcement officers or a combination of volunteer and paid law enforcement officers, and which is duly organized and maintained by a municipal corporation;

(c) "Volunteer law enforcement officer" means a person who is a member of a law enforcement department and who (i) performs assigned or authorized duties for the law enforcement department by his or her own free choice; (ii) serves in a position that is not basically clerical or secretarial in nature; (iii) is registered and accepted as a volunteer by the law enforcement department; and (iv) receives no monetary remuneration other than maintenance and reimbursement for actual expenses necessarily incurred in performing assigned duties; and

(d) "Performance of duty" includes any work in and about the volunteer law enforcement officers' quarters, police station, or any other place under the direction or general orders of the officer having the authority to order a volunteer law enforcement officer to perform the work; providing law enforcement assistance; patrol; drill; and any work of an emergency nature performed in accordance with the rules of the law enforcement department.

(2) Any municipal corporation maintaining and operating a law enforcement department may elect to provide coverage under this title for all of its volunteer law enforcement officers for death or disability occurring in the performance of their duties as volunteer law enforcement officers. Any municipal corporation electing to provide the coverage shall file a written notice of coverage with the director.

(3) Coverage under this section shall be for all the applicable death, disability, and medical aid benefits of this title and shall be effective only for injuries which occur and occupational diseases which are contracted after the notice of coverage has been filed with the director.

Nothing in this subsection shall be construed to prohibit a municipal corporation from covering its volunteer law enforcement officers and other volunteers under RCW 51.12.035(2), as now or hereafter amended, for medical aid benefits only.

(4) Volunteer law enforcement officers for whom municipal corporations have given notice of coverage under this section shall be deemed workers or employees, as the case may be, and the performance of their duties shall be deemed employment or in the course of employment, as the case may be, for all purposes of this title except where expressly excluded or where the context clearly requires otherwise.

(5) All premiums, assessments, contributions, and penalties due under this title because coverage is provided under this section shall be the obligation of and be paid by the municipal corporation giving the notice of coverage to the director.

(6) Any municipal corporation electing coverage under this section shall maintain a time log in which the number of hours worked by each of its volunteer law enforcement officers is recorded. The log shall be made available for inspection upon the request of any authorized employee of the department or of the municipal corporation's insurer.

(7) Any municipal corporation electing coverage under this section may withdraw the coverage by filing a written notice of the withdrawal with the director. The withdrawal shall become effective thirty days after filing the notice or on the date of the termination of the security for payment of compensation, whichever occurs later. At least thirty days before the effective date of the withdrawal, the municipal corporation shall notify each of its volunteer law enforcement officers of the withdrawal. Withdrawal of coverage under this section shall not affect the liability of the ((~~department or self-insurer~~)) insurer for compensation for any injury occurring during the period in which coverage was provided.

Sec. 80. Section 7, chapter 14, Laws of 1980 as amended by section 1, chapter 63, Laws of 1984 and RCW 51.16.120 are each amended to read as follows:

(1) Whenever a worker has a previous bodily disability from any previous injury or disease, whether known or unknown to the employer, and shall suffer a further disability from injury or occupational disease in employment covered by this title and become totally and permanently disabled from the combined effects thereof or die when death was substantially accelerated by the combined effects thereof, then the experience record of an insured employer ((~~insured with the state fund~~)) at the time of said further injury or disease shall be charged, and a self-insured employer shall pay directly into the ((~~reserve~~)) workers' compensation administrative fund only the accident cost which would have resulted solely from said further injury or disease, had there been no preexisting disability, and which accident cost shall be based upon an evaluation of the disability by medical experts. The difference between the charge thus assessed to such employer at the time of said further injury or disease and the total cost of the pension reserve shall be assessed against the second injury fund. The department shall pass upon the application of this section in all cases where benefits are paid for total permanent disability or death and issue an order thereon appealable by the employer or insurer. Pending outcome of such appeal the transfer or payment shall be made as required by such order.

(2) ((~~The department shall,~~)) In cases of claims of workers sustaining injuries or occupational diseases in the employ of ((~~state fund~~)) insured employers, ((~~recompute~~)) the experience record of such employers shall be recomputed when the claims of workers injured in their employ have been found to qualify for payments from the second injury fund after the regular time for computation of such experience records and the ((~~department may~~)) insurer shall make appropriate adjustments in such cases including cash refunds or credits to such employers.

(3) To encourage employment of injured workers who are not reemployed by the employer at the time of injury, the department may adopt rules providing for the reduction or elimination of premiums or assessments from subsequent employers of such workers and may also adopt rules for the reduction or elimination of charges against such employers in the event of further injury to such workers in their employ.

Sec. 81. Section 51.16.150, chapter 23, Laws of 1961 as amended by section 15, chapter 43, Laws of 1972 ex. sess. and RCW 51.16.150 are each amended to read as follows:

If any employer or insurer shall default in any payment to any fund administered by the director the sum due shall be collected by action at law in the name of the state as plaintiff, and such right of action shall be in addition to any other right of action or remedy. If such default occurs after demand, there shall also be collected a penalty equal to twenty-five percent of the amount of the defaulted payment or payments, and the director may require from the defaulting employer or insurer a bond to the state for the benefit of any fund, with surety to the director's satisfaction, in the penalty of double the amount of the estimated payments which will be required from such employer or insurer into the said funds for and during the ensuing one year, together with any penalty or penalties incurred. In case of refusal or failure after written demand personally served to furnish such bond, the state shall be entitled to an injunction restraining the delinquent from prosecuting an occupation or work until such bond is furnished, and until all delinquent ((~~premiums~~)) payments, penalties, interest and costs are paid, conditioned for the prompt and punctual making of all payments into said funds during such periods, and any sale, transfer, or lease attempted to be made by such delinquent during the period of any of the defaults herein mentioned, of his works, plant, or lease thereto, shall be invalid until all past delinquencies are made good, and such bond furnished.

Sec. 82. Section 3, chapter 85, Laws of 1977 ex. sess. as last amended by section 4, chapter 218, Laws of 1984 and RCW 51.24.050 are each amended to read as follows:

(1) An election not to proceed against the third person operates as an assignment of the cause of action to the ((~~department or self-insurer~~)) insurer, which may prosecute or compromise the action in its discretion in the name of the injured worker, beneficiary or legal representative.

(2) If an injury to a worker results in the worker's death, the ((~~department or self-insurer~~)) insurer to which the cause of action has been assigned may petition a court for the appointment of a special personal representative for the limited purpose of maintaining an action under this chapter and chapter 4.20 RCW.

(3) If a beneficiary is a minor child, an election not to proceed against a third person on such beneficiary's cause of action may be exercised by the beneficiary's legal custodian or guardian.

(4) Any recovery made by the ((~~department or self-insurer~~)) insurer shall be distributed as follows:

(a) The ((~~department or self-insurer~~)) insurer shall be paid the expenses incurred in making the recovery including reasonable costs of legal services;

(b) The injured worker or beneficiary shall be paid twenty-five percent of the balance of the recovery made, which shall not be subject to subsection (5) of this section: PROVIDED, That in the event of a compromise and settlement by the parties, the injured worker or beneficiary may agree to a sum less than twenty-five percent;

(c) The ((~~department and/or self-insurer~~)) insurer shall be paid the compensation and benefits paid to or on behalf of the injured worker or beneficiary by the ((~~department and/or self-insurer~~)) insurer; and

(d) The injured worker or beneficiary shall be paid any remaining balance.

(5) Thereafter no payment shall be made to or on behalf of a worker or beneficiary by the ((~~department and/or self-insurer~~)) insurer for such injury until the amount of any further compensation and benefits shall equal any such remaining balance. Thereafter, such benefits shall be paid by the ((~~department and/or self-insurer~~)) insurer to or on behalf of the worker or beneficiary as though no recovery had been made from a third person.

(6) In the case of an employer not qualifying as ((~~a self-insurer~~)) an insurer, the department shall make a retroactive adjustment to such employer's experience rating in which the third party claim has been included to reflect that portion of the award or settlement which is reimbursed for compensation and benefits paid and, if the claim is open at the time of recovery, applied against further compensation or benefits to which the injured worker or beneficiary may be entitled.

(7) When the cause of action has been assigned to the ((~~self-insurer~~)) insurer and compensation and benefits have been paid and/or are payable from state funds for the same injury:

(a) The prosecution of such cause of action shall also be for the benefit of the department to the extent of compensation and benefits paid and payable from state funds;

(b) Any compromise or settlement of such cause of action which results in less than the entitlement under this title is void unless made with the written approval of the department;

(d) The department shall bear its proportionate share of the costs and reasonable attorneys' fees incurred by the ((~~self-insurer~~)) insurer in obtaining the award or settlement; and

(e) Any remaining balance under subsection (4)(d) of this section shall be applied, under subsection (5) of this section, to reduce the obligations of the ((~~department and self-insurer~~)) insurer to pay further compensation and benefits in proportion to which the obligations of each bear to the remaining entitlement of the worker or beneficiary.

Sec. 83. Section 4, chapter 85, Laws of 1977 ex. sess. as last amended by section 5, chapter 218, Laws of 1984 and RCW 51.24.060 are each amended to read as follows:

(1) If the injured worker or beneficiary elects to seek damages from the third person, any recovery made shall be distributed as follows:

(a) The costs and reasonable attorneys' fees shall be paid ((~~proportionately by the injured worker or beneficiary and the department and/or self-insurer~~));

(b) The injured worker or beneficiary shall be paid twenty-five percent of the balance of the award: PROVIDED, That in the event of a compromise and settlement by the parties, the injured worker or beneficiary may agree to a sum less than twenty-five percent;

(c) The ((~~department and/or self-insurer~~)) insurer shall be paid the balance of the recovery made, but only to the extent necessary to reimburse the ((~~department and/or self-insurer~~)) insurer for compensation and benefits paid;

(((i) The department and/or self-insurer shall bear its proportionate share of the costs and reasonable attorneys' fees incurred by the worker or beneficiary to the extent of the benefits paid or payable under this title: PROVIDED, That the department or self-insurer may require court approval of costs and attorneys' fees or may petition a court for determination of the reasonableness of costs and attorneys' fees.

~~(ii) The sum representing the department's and/or self-insurer's proportionate share shall not be subject to subsection (1) (d) and (e) of this section.~~))

(d) Any remaining balance shall be paid to the injured worker or beneficiary;

(e) Thereafter no payment shall be made to or on behalf of a worker or beneficiary by the ((~~department and/or self-insurer~~)) insurer for such injury until the amount of any further compensation and benefits shall equal any such remaining balance. Thereafter, such benefits shall be paid by the ((~~department and/or self-insurer~~)) insurer to or on behalf of the worker or beneficiary as though no recovery had been made from a third person.

(2) The recovery made shall be subject to a lien by the ((~~department and/or self-insurer~~)) insurer for its share under this section.

(((3) The department or self-insurer has sole discretion to compromise the amount of its lien. In deciding whether or to what extent to compromise its lien, the department or self-insurer shall consider at least the following:

~~(a) The likelihood of collection of the award or settlement as may be affected by insurance coverage, solvency, or other factors relating to the third person;~~

(b) Factual and legal issues of liability as between the injured worker or beneficiary and the third person. Such issues include but are not limited to possible contributory negligence and novel theories of liability; and

~~(c) Problems of proof faced in obtaining the award or settlement.~~

(4) In the case of an employer not qualifying as a self-insurer, the department shall make a retroactive adjustment to such employer's experience rating in which the third party claim has been included to reflect that portion of the award or settlement which is reimbursed for compensation and benefits paid and, if the claim is open at the time of recovery, applied against further compensation and benefits to which the injured worker or beneficiary may be entitled.

~~(5) In an action under this section, the self-insurer may act on behalf and for the benefit of the department to the extent of any compensation and benefits paid or payable from state funds.~~

(6) It shall be the duty of the person to whom any recovery is paid before distribution under this section to advise the department or self-insurer of the fact and amount of such recovery, the costs and reasonable attorneys' fees associated with the recovery, and to distribute the recovery in compliance with this section.

(7) The distribution of any recovery made by award or settlement of the third party action shall be confirmed by department order, served by registered or certified mail, and shall be subject to chapter 51.52 RCW. In the event the order of distribution becomes final under chapter 51.52 RCW, the director or the director's designee may file with the clerk of any county within the state a warrant in the amount of the sum representing the unpaid lien plus interest accruing from the date the order became final. The clerk of the county in which the warrant is filed shall immediately designate a superior court cause number for such warrant and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of such worker or beneficiary mentioned in the warrant, the amount of the unpaid lien plus interest accrued and the date when the warrant was filed. The amount of such warrant as docketed shall become a lien upon the title to and interest in all real and personal property of the injured worker or beneficiary against whom the warrant is issued, the same as a judgment in a civil case docketed in the office of such clerk. The sheriff shall then proceed in the same manner and with like effect as prescribed by law with respect to execution or other process issued against rights or property upon judgment in the superior court. Such warrant so docketed shall be sufficient to support the issuance of writs of garnishment in favor of the department in the manner provided by law in the case of judgment, wholly or partially unsatisfied. The clerk of the court shall be entitled to a filing fee of five dollars, which shall be added to the amount of the warrant. A copy of such warrant shall be mailed to the injured worker or beneficiary within three days of filing with the clerk.

(8) The director, or the director's designee, may issue to any person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state, a notice and order to withhold and deliver property of any kind if he or she has reason to believe that there is in the possession of such person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state, property which is due, owing, or belonging to any worker or beneficiary upon whom a warrant has been served by the department for payments due to the state fund. The notice and order to withhold and deliver shall be served by the sheriff of the county or by the sheriff's deputy, or by any authorized representatives of the director. Any person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state upon whom service has been made shall answer the notice within twenty days exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of in the notice and order to withhold and deliver. In the event there is in the possession of the party named and served with such notice and order, any property which may be subject to the claim of the department, such property shall be delivered forthwith to the director or the director's authorized representative upon demand. If the party served and named in the notice and order fails to answer the notice and order within the time prescribed in this section, the court may, after the time to answer such order has expired, render judgment by default against the party named in the notice for the full amount claimed by the director in the notice together with costs. In the event that a notice to withhold and deliver is served upon an employer and the property found to be subject thereto is wages, the employer may assert in the answer to all exemptions provided for by chapter 7.33 RCW to which the wage earner may be entitled.))

Sec. 84. Section 5, chapter 85, Laws of 1977 ex. sess. as amended by section 6, chapter 218, Laws of 1984 and RCW 51.24.070 are each amended to read as follows:

(1) The ((~~department or self-insurer~~)) insurer may require the injured worker or beneficiary to exercise the right of election under this chapter by serving a written demand by registered mail, certified mail, or personal service on the worker or beneficiary.

(2) Unless an election is made within sixty days of the receipt of the demand, and unless an action is instituted or settled within the time granted by the ((~~department or self-insurer~~)) insurer, the injured worker or beneficiary is deemed to have assigned the action to the ((~~department or self-insurer~~)) insurer. The ((~~department or self-insurer~~)) insurer shall allow the worker or beneficiary at least ninety days from the election to institute or settle the action. When a beneficiary is a minor child the demand shall be served upon the legal custodian or guardian of such beneficiary.

(3) If an action which has been filed is not diligently prosecuted, the ((~~department or self-insurer~~)) insurer may petition the court in which the action is pending for an order assigning the cause of action to the ((~~department or self-insurer~~)) insurer. Upon a sufficient showing of a lack of diligent prosecution the court in its discretion may issue the order.

(4) If the ((~~department or self-insurer~~)) insurer has taken an assignment of the third party cause of action under subsection (2) of this section, the injured worker or beneficiary may, at the discretion of the ((~~department or self-insurer~~)) insurer, exercise a right of reelection and assume the cause of action subject to reimbursement of litigation expenses incurred by the ((~~department or self-insurer~~)) insurer.

Sec. 85. Section 6, chapter 85, Laws of 1977 ex. sess. and RCW 51.24.080 are each amended to read as follows:

(1) If the injured worker or beneficiary elects to seek damages from the third person, notice of the election must be given to the ((~~department or self-insurer~~)) insurer. The notice shall be by registered mail, certified mail, or personal service. If an action is filed by the injured worker or beneficiary, a copy of the complaint must be sent by registered mail to the ((~~department or self-insurer~~)) insurer.

(2) A return showing service of the notice on the ((~~department or self-insurer~~)) insurer shall be filed with the court but shall not be part of the record except as necessary to give notice to the defendant of the lien imposed by RCW 51.24.060(2).

Sec. 86. Section 7, chapter 85, Laws of 1977 ex. sess. as amended by section 7, chapter 218, Laws of 1984 and RCW 51.24.090 are each amended to read as follows:

(1) Any compromise or settlement of the third party cause of action by the injured worker or beneficiary which results in less than the entitlement under this title is void unless made with the written approval of the ((~~department or self-insurer~~)) insurer: PROVIDED, That for the purposes of this chapter, "entitlement" means benefits and compensation paid and payable.

(2) If a compromise or settlement is void because of subsection (1) of this section, the ((~~department or self-insurer~~)) insurer may petition the court in which the action was filed for an order assigning the cause of action to the ((~~department or self-insurer~~)) insurer. If an action has not been filed, the ((~~department or self-insurer~~)) insurer may proceed as provided in chapter 7.24 RCW.

Sec. 87. Section 51.28.070, chapter 23, Laws of 1961 as last amended by section 36, chapter 350, Laws of 1977 ex. sess. and RCW 51.28.070 are each amended to read as follows:

Information contained in the claim files and records of injured workers, under the provisions of this title, shall be deemed confidential and shall not be open to public inspection (other than to public employees in the performance of their official duties), but representatives of a claimant, be it an individual or an organization, may review a claim file or receive specific information therefrom upon the presentation of the signed authorization of the claimant. Employers or their duly authorized representatives may review any files of their own injured workers in connection with any pending claims. Physicians treating or examining workers claiming benefits under this title, or physicians giving medical advice to the ((~~department~~)) insurer regarding any claim may, at the discretion of the ((~~department~~)) insurer, inspect the claim files and records of injured workers, and other persons may make such inspection, at the ((~~departments~~)) insurer's discretion, when such persons are rendering assistance to the ((~~department~~)) insurer at any stage of the proceedings on any matter pertaining to the administration of this title.

Sec. 88. Section 51.32.010, chapter 23, Laws of 1961 as last amended by section 37, chapter 350, Laws of 1977 ex. sess. and RCW 51.32.010 are each amended to read as follows:

Each worker injured in the course of his or her employment, or his or her family or dependents in case of death of the worker, shall receive compensation in accordance with this chapter, and, except as in this title otherwise provided, such payment shall be in lieu of any and all rights of action whatsoever against any person whomsoever: PROVIDED, That if an injured worker, or the surviving spouse of an injured worker shall not have the legal custody of a child for, or on account of whom payments are required to be made under this title, such payment or payments shall be made to the person or persons having the legal custody of such child but only for the periods of time after the ((~~department~~)) insurer has been notified of the fact of such legal custody, and it shall be the duty of any such person or persons receiving payments because of legal custody of any child immediately to notify the ((~~department~~)) insurer of any change in such legal custody.

Sec. 89. Section 1, chapter 107, Laws of 1961 as last amended by section 38, chapter 350, Laws of 1977 ex. sess. and RCW 51.32.015 are each amended to read as follows:

The benefits of Title 51 RCW shall be provided to each worker receiving an injury, as defined therein, during the course of his or her employment and also during his or her lunch period as established by the employer while on the jobsite. The jobsite shall consist of the premises as are occupied, used or contracted for by the employer for the business or work process in which the employer is then engaged: PROVIDED, That if a worker by reason of his or her employment leaves such jobsite under the direction, control or request of the employer and if such worker is injured during his or her lunch period while so away from the jobsite, the worker shall receive the benefits as provided herein: AND PROVIDED FURTHER, That the employer need not consider the lunch period in his or her payroll for the purpose of reporting to the ((~~department~~)) insurer unless the worker is actually paid for such period of time.

Sec. 90. Section 8, chapter 14, Laws of 1980 and RCW 51.32.030 are each amended to read as follows:

Any sole proprietor, partner, or joint venturer who has requested coverage under this title and who shall thereafter be injured or sustain an occupational disease, shall be entitled to the benefit of this title, as and under the same circumstances and subject to the same obligations as a worker: PROVIDED, That no such person or the beneficiaries thereof shall be entitled to benefits under this title unless the ((~~department~~)) insurer has received notice in writing of such request on such forms as the ((~~department~~)) insurer may provide prior to the date of the injury or occupational disease as the result of which claims are made: PROVIDED, That the ((~~department~~)) insurer shall have the power to cancel the personal coverage of any such person if any required payments or reports have not been made.

Sec. 91. Section 13, chapter 2, Laws of 1983 and RCW 51.32.040 are each amended to read as follows:

No money paid or payable under this title shall, except as provided for in RCW 74.04.530 or 74.20A.260, prior to the issuance and delivery of the check or warrant therefor, be capable of being assigned, charged, or ever be taken in execution or attached or garnished, nor shall the same pass, or be paid, to any other person by operation of law, or by any form of voluntary assignment, or power of attorney. Any such assignment or charge shall be void, unless the transfer is to a financial institution at the request of a worker or other beneficiary and in accordance with RCW 51.32.045 shall be made: PROVIDED, That if any worker suffers a permanent partial injury, and dies from some other cause than the accident which produced such injury before he or she shall have received payment of his or her award for such permanent partial injury, or if any worker suffers any other injury before he or she shall have received payment of any monthly installment covering any period of time prior to his or her death, the amount of such permanent partial award, or of such monthly payment or both, shall be paid to the surviving spouse, or to the child or children if there is no surviving spouse: PROVIDED FURTHER, That, if any worker suffers an injury and dies therefrom before he or she shall have received payment of any monthly installment covering time loss for any period of time prior to his or her death, the amount of such monthly payment shall be paid to the surviving spouse, or to the child or children if there is no surviving spouse: PROVIDED FURTHER, That any application for compensation under the foregoing provisos of this section shall be filed with the ((~~department or self-insuring employer~~)) insurer within one year of the date of death: PROVIDED FURTHER, That if the injured worker resided in the United States as long as three years prior to the date of injury, such payment shall not be made to any surviving spouse or child who was at the time of the injury a nonresident of the United States: PROVIDED FURTHER, That any worker receiving benefits under this title who is subsequently confined in, or who subsequently becomes eligible therefor while confined in any institution under conviction and sentence shall have all payments of such compensation canceled during the period of confinement but after discharge from the institution payment of benefits thereafter due shall be paid if such worker would, but for the provisions of this proviso, otherwise be entitled thereto: PROVIDED FURTHER, That if any prisoner is injured in the course of his or her employment while participating in a work or training release program authorized by chapter 72.65 RCW and is subject to the provisions of this title, he or she shall be entitled to payments under this title subject to the requirements of chapter 72.65 RCW unless his or her participation in such program has been canceled, or unless he or she is returned to a state correctional institution, as defined in RCW 72.65.010(3), as a result of revocation of parole or new sentence: PROVIDED FURTHER, That if such incarcerated worker has during such confinement period, any beneficiaries, they shall be paid directly the monthly benefits which would have been paid to him or her for himself or herself and his or her beneficiaries had he or she not been so confined. Any lump sum benefits to which the worker would otherwise be entitled but for the provisions of these provisos shall be paid on a monthly basis to his or her beneficiaries.

Sec. 92. Section 9, chapter 14, Laws of 1980 and RCW 51.32.073 are each amended to read as follows:

Each employer shall retain from the earnings of each worker that amount as shall be fixed from time to time by the director, the basis for measuring said amount to be determined by the director. The money so retained shall be matched in an equal amount by each employer, and all such moneys shall be remitted to the department in such manner and at such intervals as the department directs and shall be placed in the supplemental pension fund: PROVIDED, That the state apprenticeship council shall pay the entire amount into the supplemental pension fund for registered apprentices or trainees during their participation in supplemental and related instruction classes. The moneys so collected shall be used exclusively for the additional payments from the supplemental pension fund prescribed in this title and for the amount of any increase payable under the provisions of RCW 51.32.075, as now or hereafter amended, and shall be no more than necessary to make such payments on a current basis. The department may require ((~~a self-insurer~~)) an insurer to make any additional payments which are payable from the supplemental pension fund and thereafter such ((~~self-insurer~~)) insurer shall be reimbursed therefrom.

Sec. 93. Section 3, chapter 286, Laws of 1975 1st ex. sess. as last amended by section 19, chapter 63, Laws of 1982 and RCW 51.32.220 are each amended to read as follows:

(1) For persons under the age of sixty-five receiving compensation for temporary or permanent total disability pursuant to the provisions of chapter 51.32 RCW, such compensation shall be reduced by an amount equal to the benefits payable under the federal old-age, survivors and disability insurance act as now or hereafter amended not to exceed the amount of the reduction established pursuant to 42 USC 424a. However, such reduction shall not apply when the combined compensation provided pursuant to chapter 51.32 RCW and the federal old-age, survivors and disability insurance act is less than the total benefits to which the federal reduction would apply, pursuant to 42 USC 424a. Where any person described in this section refuses to authorize the release of information concerning the amount of benefits payable under said federal act the ((~~department's~~)) insurer's estimate of said amount shall be deemed to be correct unless and until the actual amount is established and no adjustment shall be made for any period of time covered by any such refusal.

(2) Any reduction under subsection (1) of this section shall be effective the month following the month in which the ((~~department or self-insurer~~)) insurer is notified by the federal social security administration that the person is receiving disability benefits under the federal old-age, survivors and disability insurance act: PROVIDED, That in the event of an overpayment of benefits the ((~~department or self-insurer~~)) insurer may not recover more than the overpayments for the six months immediately preceding the date the ((~~department or self-insurer~~)) insurer notifies the worker that an overpayment has occurred: PROVIDED FURTHER, That upon determining that there has been an overpayment, the ((~~department or self-insurer~~)) insurer shall immediately notify the person who received the overpayment that he or she shall be required to make repayment pursuant to this section and RCW 51.32.230.

(3) Recovery of any overpayment must be taken from future temporary or permanent total disability benefits or permanent partial disability benefits provided by this title. In the case of temporary or permanent total disability benefits, the recovery shall not exceed twenty-five percent of the monthly amount due from the ((~~department or self-insurer~~)) insurer or one-sixth of the total overpayment, whichever is the lesser.

(4) No reduction may be made unless the worker receives notice of the reduction prior to the month in which the reduction is made.

(5) In no event shall the reduction reduce total benefits to less than the greater amount the worker may be entitled to under this title or the federal old-age, survivors and disability insurance act.

(6) The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.04 RCW, may exercise his discretion to waive, in whole or in part, the amount of any overpayment where the recovery would be against equity and good conscience.

(7) The amendment in subsection (1) of this section ((~~by this 1982 act~~)) raising the age limit during which the reduction shall be made from age sixty-two to age sixty-five shall apply with respect to workers whose effective entitlement to total disability compensation begins after January 1, 1983.

Sec. 94. Section 2, chapter 151, Laws of 1979 ex. sess. and RCW 51.32.230 are each amended to read as follows:

Notwithstanding any other provisions of law, any overpayments previously recovered under the provisions of RCW 51.32.220 as now or hereafter amended shall be limited to six months' overpayments. Where greater recovery has already been made, the director, in his discretion, may ((~~make~~)) order restitution in those cases where an extraordinary hardship has been created.

Sec. 95. Section 13, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.32.240 are each amended to read as follows:

(1) Whenever any payment of benefits under this title is made because of clerical error, mistake of identity, innocent misrepresentation by or on behalf of the recipient thereof mistakenly acted upon, or any other circumstance of a similar nature, all not induced by fraud, the recipient thereof shall repay it and recoupment may be made from any future payments due to the recipient on any claim with the ((~~state fund or self-insurer, as the case may be~~)) same insurer. The ((~~department or self-insurer, as the case may be,~~)) insurer must make claim for such repayment or recoupment within one year of the making of any such payment or it will be deemed any claim therefor has been waived. The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.04 RCW, may exercise his discretion to waive, in whole or in part, the amount of any such timely claim where the recovery would be against equity and good conscience.

(2) Whenever any payment of benefits under this title has been made pursuant to an adjudication by the department or by order of the board or any court and timely appeal therefrom has been made where the final decision is that any such payment was made pursuant to an erroneous adjudication, the recipient thereof shall repay it and recoupment may be made from any future payments due to the recipient on any claim with the ((~~state fund or self-insurer, as the case may be~~)) same insurer. The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.04 RCW, may exercise his discretion to waive, in whole or in part, the amount of any such payments where the recovery would be against equity and good conscience.

(3) Whenever any payment of benefits under this title has been induced by fraud the recipient thereof shall repay any such payment together with a penalty of fifty percent of the total of any such payments and the amount of such total sum may be recouped from any future payments due to the recipient on any claim with the ((~~state fund or self-insurer~~)) same insurer against whom the fraud was committed, ((~~as the case may be,~~)) and the amount of such penalty shall be placed in the supplemental pension fund. Such repayment or recoupment must be demanded or ordered within one year of the discovery of the fraud.

Sec. 96. Section 51.36.010, chapter 23, Laws of 1961 as last amended by section 56, chapter 350, Laws of 1977 ex. sess. and RCW 51.36.010 are each amended to read as follows:

Upon the occurrence of any injury to a worker entitled to compensation under the provisions of this title, he or she shall receive proper and necessary medical and surgical services at the hands of a physician of his or her own choice, if conveniently located, and proper and necessary hospital care and services during the period of his or her disability from such injury, but the same shall be limited in point of duration as follows:

In the case of permanent partial disability, not to extend beyond the date when compensation shall be awarded him or her, except when the worker returned to work before permanent partial disability award is made, in such case not to extend beyond the time when monthly allowances to him or her shall cease; in case of temporary disability not to extend beyond the time when monthly allowances to him or her shall cease: PROVIDED, That after any injured worker has returned to his or her work his or her medical and surgical treatment may be continued if, and so long as, such continuation is ((~~deemed~~)) necessary ((~~by the supervisor of industrial insurance to be necessary~~)) to his or her more complete recovery; in case of a permanent total disability not to extend beyond the date on which a lump sum settlement is made with him or her or he or she is placed upon the permanent pension roll: PROVIDED, HOWEVER, That the supervisor of industrial insurance, solely in his or her discretion, may authorize continued medical and surgical treatment for conditions previously accepted ((~~by the department~~)) when such medical and surgical treatment is deemed necessary by the supervisor of industrial insurance to protect such worker's life or provide for the administration of medical and therapeutic measures including payment of prescription medications, but not including those controlled substances currently scheduled by the state board of pharmacy as Schedule I, II, III, or IV substances under chapter 69.50 RCW, which are necessary to alleviate continuing pain which results from the industrial injury. In order to authorize such continued treatment the written order of the supervisor of industrial insurance issued in advance of the continuation shall be necessary.

Sec. 97. Section 2, chapter 107, Laws of 1961 as amended by section 59, chapter 350, Laws of 1977 ex. sess. and RCW 51.36.040 are each amended to read as follows:

The benefits of Title 51 RCW shall be provided to each worker receiving an injury, as defined therein, during the course of his or her employment and also during his or her lunch period as established by the employer while on the jobsite. The jobsite shall consist of the premises as are occupied, used or contracted for by the employer for the business ((of)) or work process in which the employer is then engaged: PROVIDED, That if a worker by reason of his or her employment leaves such jobsite under the direction, control or request of the employer and if such worker is injured during his or her lunch period while so away from the jobsite, the worker shall receive the benefits as provided herein: AND PROVIDED FURTHER, That the employer need not consider the lunch period in worker hours for the purpose of reporting to the ((~~department~~)) insurer unless the worker is actually paid for such period of time.

Sec. 98. Section 51.44.040, chapter 23, Laws of 1961 as last amended by section 14, chapter 63, Laws of 1982 and RCW 51.44.040 are each amended to read as follows:

(1) There shall be in the office of the state treasurer, a fund to be known and designated as the "second injury fund", which shall be used only for the purpose of defraying charges against it as provided in RCW 51.16.120 and 51.32.250, as now or hereafter amended. Said fund shall be administered by the director. The state treasurer shall be the custodian of the second injury fund and shall be authorized to disburse moneys from it only upon written order of the director.

(2) ((~~Payments to~~)) Assessments for the second injury fund ((~~from the accident fund~~)) shall be ((~~made~~)) imposed and collected from all insurers pursuant to rules and regulations promulgated by the director.

(((3) Assessments for the second injury fund shall be imposed on self-insurers pursuant to rules and regulations promulgated by the director to ensure that self-insurers shall pay to such fund in the proportion that the payments made from such fund on account of claims made against self-insurers bears to the total sum of payments from such fund.))

Sec. 99. Section 51.52.030, chapter 23, Laws of 1961 and RCW 51.52.030 are each amended to read as follows:

The board may incur such expenses as are reasonably necessary to carry out its duties hereunder, which expenses shall be paid((~~, one-half from the accident fund and one-half from the medical aid~~)) from the workers' compensation administrative fund upon vouchers approved by the board.

Sec. 100. Section 51.52.050, chapter 23, Laws of 1961 as last amended by section 4, chapter 109, Laws of 1982 and RCW 51.52.050 are each amended to read as follows:

Whenever the department has made any order, decision, or award, it shall promptly serve the worker, beneficiary, employer, insurer, or other person affected thereby, with a copy thereof by mail, which shall be addressed to such person at his or her last known address as shown by the records of the department. The copy, in case the same is a final order, decision, or award, shall bear on the same side of the same page on which is found the amount of the award, a statement, set in black faced type of at least ten point body or size, that such final order, decision, or award shall become final within sixty days from the date the order is communicated to the parties unless a written request for reconsideration is filed with the department of labor and industries, Olympia, or an appeal is filed with the board of industrial insurance appeals, Olympia.

Whenever the department has taken any action or made any decision relating to any phase of the administration of this title the worker, beneficiary, employer, insurer, or other person aggrieved thereby may request reconsideration of the department, or may appeal to the board. In an appeal before the board, the appellant shall have the burden of proceeding with the evidence to establish a prima facie case for the relief sought in such appeal. Any such person aggrieved by the decision and order of the board may thereafter appeal to the superior court, as prescribed in this chapter.

Nothing in this section shall be construed to permit an appeal to the board from a notice of assessment issued pursuant to RCW 51.48.120.

Sec. 101. Section 51.52.060, chapter 23, Laws of 1961 as last amended by section 76, chapter 350, Laws of 1977 ex. sess. and RCW 51.52.060 are each amended to read as follows:

Any worker, beneficiary, employer, insurer, or other person aggrieved by an order, decision, or award of the department must, before he or she appeals to the courts, file with the board and the director, by mail or personally, within sixty days from the day on which such copy of such order, decision, or award was communicated to such person, a notice of appeal to the board. Within ten days of the date on which an appeal has been granted by the board, the board shall notify the other interested parties thereto of the receipt thereof and shall forward a copy of said notice of appeal to such other interested parties. Within twenty days of the receipt of such notice of the board, the worker or the employer may file with the board a cross-appeal from the order of the department from which the original appeal was taken: PROVIDED, That nothing contained in this section shall be deemed to change, alter or modify the practice or procedure of the department for the payment of awards pending appeal: AND PROVIDED, That failure to file notice of appeal with both the board and the department shall not be ground for denying the appeal if the notice of appeal is filed with either the board or the department: AND PROVIDED, That, if within the time limited for filing a notice of appeal to the board from an order, decision, or award of the department, the department shall direct the submission of further evidence or the investigation of any further fact, the time for filing such notice of appeal shall not commence to run until such person shall have been advised in writing of the final decision of the department in the matter: PROVIDED, FURTHER, That in the event the department shall direct the submission of further evidence or the investigation of any further fact, as above provided, the department shall render a final order, decision, or award within ninety days from the date such further submission of evidence or investigation of further fact is ordered which time period may be extended by the department for good cause stated in writing to all interested parties for an additional ninety days: PROVIDED, FURTHER, That the department, either within the time limited for appeal, or within thirty days after receiving a notice of appeal, may modify, reverse or change any order, decision, or award, or may hold any such order, decision, or award in abeyance for a period of ninety days which time period may be extended by the department for good cause stated in writing to all interested parties for an additional ninety days pending further investigation in light of the allegations of the notice of appeal, and the board shall thereupon deny the appeal, without prejudice to the appellant's right to appeal from any subsequent determinative order issued by the department.

Sec. 102. Section 51.52.070, chapter 23, Laws of 1961 as last amended by section 77, chapter 350, Laws of 1977 ex. sess. and RCW 51.52.070 are each amended to read as follows:

The notice of appeal to the board shall set forth in full detail the grounds upon which the person appealing considers such order, decision, or award is unjust or unlawful, and shall include every issue to be considered by the board, and it must contain a detailed statement of facts upon which such worker, beneficiary, employer, insurer, or other person relies in support thereof. The worker, beneficiary, employer, insurer, or other person shall be deemed to have waived all objections or irregularities concerning the matter on which such appeal is taken other than those specifically set forth in such notice of appeal or appearing in the records of the department. The department shall promptly transmit its original record, or a legible copy thereof produced by mechanical, photographic, or electronic means, in such matter to the board.

Sec. 103. Section 51.52.095, chapter 23, Laws of 1961 as last amended by section 7, chapter 109, Laws of 1982 and RCW 51.52.095 are each amended to read as follows:

The board, upon request of the worker, beneficiary, insurer, or employer, or upon its own motion, may direct all parties interested in an appeal, together with their attorneys, if any, to appear before it, a member of the board, or an authorized industrial appeals judge, for a conference for the purpose of determining the feasibility of settlement, the simplification of issues of law and fact, the necessity of amendments to the notice of appeal or other pleadings, the possibility of obtaining admissions of fact and of documents which will avoid unnecessary proof, the limitation of the number of expert witnesses, and such other matters as may aid in the disposition of the appeal. Such conference may be held prior to the hearing, or it may be held during the hearing, at the discretion of the board member or industrial appeals judge conducting the same, in which case the hearing will be recessed for such conference. Following the conference, the board member or industrial appeals judge conducting the same, shall state on the record the results of such conference, and the parties present or their representatives shall state their concurrence on the record. Such agreement as stated on the record shall control the subsequent course of the proceedings, unless modified at a subsequent hearing to prevent manifest injustice. If agreement concerning final disposition of the appeal is reached by the parties present at the conference, or by the employer or insurer and worker or beneficiary, the board may enter a final decision and order in accordance therewith, providing the board finds such agreement is in conformity with the law and the facts.

Sec. 104. Section 1, chapter 40, Laws of 1973 as last amended by section 6, chapter 109, Laws of 1982 and RCW 51.52.110 are each amended to read as follows:

Within thirty days after a decision of the board to deny the petition or petitions for review upon such appeal has been communicated to such worker, beneficiary, employer, insurer, or other person, or within thirty days after the final decision and order of the board upon such appeal has been communicated to such worker, beneficiary, employer, insurer, or other person, or within thirty days after the appeal is denied as herein provided, such worker, beneficiary, employer, insurer, or other person aggrieved by the decision and order of the board may appeal to the superior court. If such worker, beneficiary, employer, insurer, or other person fails to file with the superior court its appeal as provided in this section within said thirty days, the decision of the board to deny the petition or petitions for review or the final decision and order of the board shall become final.

In cases involving injured workers, an appeal to the superior court shall be to the superior court of the county of residence of the worker or beneficiary, as shown by the department's records, or to the superior court of the county wherein the injury occurred or where neither the county of residence nor the county wherein the injury occurred are in the state of Washington then the appeal may be directed to the superior court for Thurston county. In all other cases the appeal shall be to the superior court of Thurston county. Such appeal shall be perfected by filing with the clerk of the court a notice of appeal and by serving a copy thereof by mail, or personally, on the director and on the board. If the case is one involving ((~~a self-insurer~~)) an insurer, a copy of the notice of appeal shall also be served by mail, or personally, on such ((~~self-insurer~~)) insurer. The department shall, in all cases not involving ((~~a self-insurer~~)) an insurer, within twenty days after the receipt of such notice of appeal, serve and file its notice of appearance and such appeal shall thereupon be deemed at issue. If the case is one involving ((~~a self-insurer~~)) an insurer, such ((~~self-insurer~~)) insurer shall, within twenty days after receipt of such notice of appeal, serve and file its notice of appearance and such appeal shall thereupon be deemed to be at issue. In such cases the department may appear and take part in any proceedings. The board shall serve upon the appealing party, the director, the ((~~self-insurer~~)) insurer if the case involves ((~~a self-insurer~~)) an insurer, and any other party appearing at the board's proceeding, and file with the clerk of the court before trial, a certified copy of the board's official record which shall include the notice of appeal and other pleadings, testimony and exhibits, and the board's decision and order, which shall become the record in such case. No bond shall be required on appeals to the superior court or on appeals to the supreme court or the court of appeals, except that an appeal by the employer from a decision and order of the board under RCW 51.48.070, shall be ineffectual unless, within five days following the service of notice thereof, a bond, with surety satisfactory to the court, shall be filed, conditioned to perform the judgment of the court. Except in the case last named an appeal shall not be a stay: PROVIDED, HOWEVER, That whenever the board has made any decision and order reversing an order of the supervisor of industrial insurance on questions of law or mandatory administrative actions of the director, the department shall have the right of appeal to the superior court.

Sec. 105. Section 51.52.130, chapter 23, Laws of 1961 as last amended by section 23, chapter 63, Laws of 1982 and RCW 51.52.130 are each amended to read as follows:

If, on appeal to the court from the decision and order of the board, said decision and order is reversed or modified and additional relief is granted to a worker or beneficiary, or in cases where a party other than the worker or beneficiary is the appealing party and the worker's or beneficiary's right to relief is sustained by the court, a reasonable fee for the services of the worker's or beneficiary's attorney shall be fixed by the court. In fixing the fee the court shall take into consideration the fee or fees, if any, fixed by the director and the board for such attorney's services before the department and the board. If the court finds that the fee fixed by the director or by the board is inadequate for services performed before the department or board, or if the director or the board has fixed no fee for such services, then the court shall fix a fee for the attorney's services before the department, or the board, as the case may be, in addition to the fee fixed for the services in the court. If the decision and order of the board is reversed or modified ((~~and if the accident fund is affected by the litigation~~)), then the attorney's fee fixed by the court for services before the court only, and the fees of medical and other witnesses and the costs shall be payable out of the administrative fund of the department. In the case of self-insured employers, if the decision and order of the board is reversed or modified resulting in additional benefits by the litigation that would be paid from the accident fund if the employer were not self-insured, then the attorney fees fixed by the court for services before the court, only, and the fees of medical and other witnesses and the costs shall be payable directly by the self-insured employer.

Sec. 106. Section 51.52.150, chapter 23, Laws of 1961 and RCW 51.52.150 are each amended to read as follows:

All expenses and costs incurred by the department for board and court appeals, including fees for medical and other witnesses, court reporter costs and attorney's fees, and all costs taxed against the department, shall be paid ((~~one-half~~)) out of the ((~~medical aid fund and one-half out of the accident~~)) workers' compensation administrative fund.

Sec. 107. Section 2, chapter 151, Laws of 1963 as last amended by section 25, chapter 350, Laws of 1977 ex. sess. and RCW 51.16.042 are each amended to read as follows:

Inasmuch as business, industry and labor desire to provide for testing, research, training and teaching facilities and consulting services at the University of Washington for industrial and occupational health for workers in the environmental research facility thereat, all ((~~employers~~)) insurers shall bear their proportionate share of the cost therefor. The director may require payments to the department from all ((~~employers~~)) insurers under this title and may make rules and regulations in connection therewith, which costs shall be paid from the workers' compensation administrative fund by the director of the department, in lieu of the previous provisions of RCW 28B.20.458.

NEW SECTION. Sec. 108. A new section is added to chapter 48.14 RCW to read as follows:

There shall be in the office of the state treasurer a fund to be known and designated as the "insurance commissioner's workers' compensation operating fund" which is established to provide for the payment of all expenses of the insurance commissioner with respect to the administration of the duties relating to workers' compensation insurance imposed by Title 48 RCW and for other purposes as provided by law.

NEW SECTION. Sec. 109. A new section is added to chapter 48.14 RCW to read as follows:

The insurance commissioner shall annually estimate the costs of administering the provisions of Title 48 RCW relating to workers' compensation insurance and shall submit the estimate for inclusion, together with justification, in the assessment upon insurers to be imposed by the director of labor and industries pursuant to section 58 of this act. The director shall transfer the amount of the assessment relating to the office of the insurance commissioner to the insurance commissioner's workers' compensation operating fund. The commissioner shall report annually to the legislature the activity of the insurance commissioner's workers' compensation operating fund, including justification for assessments.

NEW SECTION. Sec. 110. Sections 9 through 16 and 68 of this act shall constitute a new chapter in Title 51 RCW.

NEW SECTION. Sec. 111. The following acts or parts of acts are each repealed:

(1) Section 88, chapter 289, Laws of 1971 ex. sess., section 5, chapter 43, Laws of 1972 ex. sess., section 5, chapter 323, Laws of 1977 ex. sess. and RCW 51.08.175;

(2) Section 36, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.070;

(3) Section 51.16.100, chapter 23, Laws of 1961 and RCW 51.16.100;

(4) Section 51.16.110, chapter 23, Laws of 1961, section 4, chapter 289, Laws of 1971 ex. sess., section 12, chapter 323, Laws of 1977 ex. sess. and RCW 51.16.110;

(5) Section 51.16.130, chapter 23, Laws of 1961, section 14, chapter 43, Laws of 1972 ex. sess. and RCW 51.16.130;

(6) Section 10, chapter 14, Laws of 1980, section 11, chapter 63, Laws of 1982, section 2, chapter 70, Laws of 1983 and RCW 51.32.095;

(7) Section 26, chapter 43, Laws of 1972 ex. sess., section 55, chapter 350, Laws of 1977 ex. sess. and RCW 51.32.210;

(8) Section 51.44.020, chapter 23, Laws of 1961 and RCW 51.44.020;

(9) Section 51.44.030, chapter 23, Laws of 1961 and RCW 51.44.030;

(10) Section 51.44.050, chapter 23, Laws of 1961 and RCW 51.44.050;

(11) Section 51.44.060, chapter 23, Laws of 1961, section 28, chapter 43, Laws of 1972 ex. sess. and RCW 51.44.060;

(12) Section 51.44.080, chapter 23, Laws of 1961, section 57, chapter 289, Laws of 1971 ex. sess., section 29, chapter 43, Laws of 1972 ex. sess. and RCW 51.44.080;

(13) Section 51.44.090, chapter 23, Laws of 1961, section 31, chapter 43, Laws of 1972 ex. sess. and RCW 51.44.090;

(14) Section 51.44.100, chapter 23, Laws of 1961, section 10, chapter 281, Laws of 1961, section 1, chapter 41, Laws of 1965 ex. sess., section 2, chapter 92, Laws of 1972 ex. sess., section 6, chapter 103, Laws of 1973 1st ex. sess., section 41, chapter 3, Laws of 1981 and RCW 51.44.100;

(15) Section 51.44.110, chapter 23, Laws of 1961, section 30, chapter 106, Laws of 1973, section 68, chapter 350, Laws of 1977 ex. sess. and RCW 51.44.110;

(16) Section 58, chapter 289, Laws of 1971 ex. sess., section 30, chapter 43, Laws of 1972 ex. sess. and RCW 51.44.140;

(17) Section 59, chapter 289, Laws of 1971 ex. sess. and RCW 51.44.150;

(18) Section 60, chapter 289, Laws of 1971 ex. sess., section 17, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.44.160;

(19) Section 51.04.100, chapter 23, Laws of 1961, section 6, chapter 350, Laws of 1977 ex. sess. and RCW 51.04.100;

(20) Section 51.16.090, chapter 23, Laws of 1961 and RCW 51.16.090;

(21) Section 87, chapter 289, Laws of 1971 ex. sess. and RCW 51.16.155;

(22) Section 51.16.160, chapter 23, Laws of 1961, section 78, chapter 289, Laws of 1971 ex. sess. and RCW 51.16.160;

(23) Section 51.16.170, chapter 23, Laws of 1961 and RCW 51.16.170;

(24) Section 51.16.180, chapter 23, Laws of 1961, section 79, chapter 289, Laws of 1971 ex. sess. and RCW 51.16.180;

(25) Section 27, chapter 323, Laws of 1977 ex. sess. and RCW 51.16.190;

(26) Section 32, chapter 43, Laws of 1972 ex. sess. and RCW 51.48.120;

(27) Section 33, chapter 43, Laws of 1972 ex. sess., section 3, chapter 109, Laws of 1982 and RCW 51.48.130;

(28) Section 34, chapter 43, Laws of 1972 ex. sess. and RCW 51.48.140;

(29) Section 35, chapter 43, Laws of 1972 ex. sess. and RCW 51.48.150; and

(30) Section 51.04.090, chapter 23, Laws of 1961, section 5, chapter 350, Laws of 1977 ex. sess. and RCW 51.04.090.

NEW SECTION. Sec. 112. (1) If the provisions of this act providing for the establishment of the separate state workers' compensation fund shall be held invalid but the other provisions for the securing of payment of compensation are not held invalid, then only the provisions relating to such state fund shall be considered deleted from the act and the provisions repealing the laws governing the state fund as it existed prior to the effective date of this act shall be considered deleted from the act, void, and having never taken effect.

(2) If the provisions of this act providing for the securing payment of compensation by insuring with any private insurer or group of self-insurers permitted to transact workers' compensation insurance in this state shall be held invalid, then this entire act shall thereby be invalidated.

(3) In other respects, if any other 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.

NEW SECTION. Sec. 113. Section 68 of this act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1985. The remainder of this act shall take effect July 1, 1986.