AN ACT Relating to legislative services; amending RCW 44.28.080, 44.28.085, 44.28.086, 44.28.087, 44.48.070, 44.48.080, 44.48.090, 44.28.110, 44.28.120, 44.44.010, 44.44.040, 43.88A.020, 43.88A.030, 43.88A.040, 43.132.020, 43.132.030, 43.132.040, 43.132.050, 28A.03.449, 28A.61.030, 28B.15.766, 39.19.900, 39.29.010, 41.06.070, 41.26.030, 41.32.010, 41.40.010, 42.48.060, 43.09.310, 43.19.532, 43.79.270, 43.79.280, 43.88.020, 43.88.090, 43.88.160, 43.88.205, 43.88.230, 43.88.310, 43.88.510, 43.131.050, 43.131.060, 43.131.070, 43.131.080, 43.131.110, 43.136.030, 43.136.040, 43.136.050, 44.40.025, 67.70.310, 67.70.900, 72.09.180, 82.01.125 and 82.01.135; reenacting and amending RCW 18.36.010, 43.10.067, and 43.88.030; adding new sections to chapter 44.28 RCW; adding a new section to chapter 43.105 RCW; creating new sections; recodifying RCW 44.48.070, 44.48.080, and 44.48.090; repealing RCW 44.44.020, 44.44.030, 44.28.010, 44.28.020, 44.28.030, 44.28.040, 44.28.050, 44.28.060, 44.28.100, 44.28.130, 44.28.140, 44.28.150, 44.28.900, 44.48.010, 44.48.020, 44.48.030, 44.48.040, 44.48.050, 44.48.060, 44.48.100, 44.48.110, 44.48.120, 44.48.130, 44.48.140, and 44.48.900; and providing effective dates.

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

GENERAL PROVISIONS

NEW SECTION. Sec. 101. COMMITTEE CREATED. (1) The legislative fiscal services committee is hereby created, consisting of:

(a) The chairperson of the ways and means committee of the senate;

(b) One member of the minority caucus of the senate who is also a member of the ways and means committee of the senate, appointed by the president of the senate;

(d) One member of the minority caucus of the senate who is also a member of the transportation committee of the senate, appointed by the president of the senate;

(e) One member of the majority caucus of the senate who holds a leadership position in the caucus, appointed by the president of senate;

(f) One member of the minority caucus of the senate who holds a leadership position in the caucus, appointed by the president of the senate;

(g) One member of the majority caucus of the senate who is a committee chairperson, appointed by the president of the senate;

(h) One member of the minority caucus of the senate, appointed by the president of the senate;

(i) The chairperson of the ways and means committee of the house of representatives;

(j) One member of the minority caucus of the house of representatives who is also a member of the ways and means committee of the house of representatives, appointed by the speaker of the house of representatives;

(k) The chairperson of the transportation committee of the house of representatives;

(l) One member of the minority caucus of the house of representatives who is also a member of the transportation committee of the house of representatives, appointed by the speaker of the house of representatives;

(m) One member of the majority caucus of the house of representatives who holds a leadership position in the caucus, appointed by the speaker of the house of representatives;

(n) One member of the minority caucus of the house of representatives who holds a leadership position in the caucus, appointed by the speaker of the house of representatives;

(o) One member of the majority caucus of the house of representatives who is a committee chairperson, appointed by the speaker of the house of representatives; and

(p) One member of the minority caucus of the house of representatives, appointed by the speaker of the house of representatives.

(2) Appointments under this section are subject to confirmation by the house of representatives as to appointed representatives and by the senate as to appointed senators.

(3) The members of the legislative fiscal services committee shall serve two-year terms, beginning with their appointment during the regular legislative session held in an odd-numbered year and continuing until their successors are appointed and qualified. In case of a vacancy, the original appointing authority shall appoint another member meeting the requirements of subsection (1) of this section.

(4) The chairpersons of the ways and means committees of the senate and house of representatives shall serve alternating terms as chairperson of the legislative fiscal services committee, beginning with the chairperson of the ways and means committee of the senate. The legislative fiscal services committee shall choose other necessary officers from among its membership and shall make rules for orderly procedure.

NEW SECTION. Sec. 102. GENERAL DUTIES OF COMMITTEE. The legislative fiscal services committee shall:

(1) Make and distribute a biennial report to the members of the legislature at least ten days before the convening of the legislature in each odd-numbered year, and make reports from time to time to the members of the legislature and to the public with respect to any of its findings or recommendations; and

(2) Keep complete minutes of its meetings.

NEW SECTION. Sec. 103. TRAVEL EXPENSES OF COMMITTEE MEMBERS. Members of the legislative fiscal services committee shall be reimbursed for travel expenses under RCW 44.04.120 while attending meetings of the committee or on other official business authorized by the committee.

NEW SECTION. Sec. 104. COMMITTEE PERSONNEL. The entities of the senate and house of representatives responsible for the employment of committee staff shall jointly be responsible for the employment of the legislative fiscal services committee's staff. The committee's staff shall serve under the joint jurisdiction of the committee staff organizations in the senate and house of representatives.

NEW SECTION. Sec. 105. A new section is added to chapter 43.105 RCW to read as follows:

DATA PROCESSING AUTHORITY EXEMPTION. The legislative fiscal services committee created in section 101 of this act is exempt from the provisions of this chapter. However, the authority may provide its services to the legislative fiscal services committee at the request of the committee. PART II

LEGISLATIVE AUDITS AND REVIEWS

Sec. 201. Section 4, chapter 43, Laws of 1951 as last amended by section 14, chapter 293, Laws of 1975 1st ex. sess. and RCW 44.28.080 are each amended to read as follows:

POWERS‑-APPROPRIATIONS, EXPENSES. The legislative fiscal services committee shall have the following powers:

(1) To make examinations and reports concerning whether or not appropriations are being expended for the purposes and within the statutory restrictions provided by the legislature; ((~~concerning the economic outlook and estimates of revenue to meet expenditures;~~)) and concerning the organization and operation of procedures necessary or desirable to promote economy, efficiency, and effectiveness in state government, its officers, boards, committees, commissions, institutions and other state agencies, and to make recommendations and reports to the legislature.

(2) To make such other studies and examinations of economy, efficiency, and effectiveness of state government and its state agencies as it may find advisable, and to hear complaints, hold hearings, gather information and make findings of fact with respect thereto.

(3) ((~~The committee shall have the power~~)) To receive messages and reports in person or in writing from the governor or any other state officials and to study generally any and all business relating to economy, efficiency, and effectiveness in state government and state agencies.

Sec. 202. Section 3, chapter 170, Laws of 1971 ex. sess. as amended by section 15, chapter 293, Laws of 1975 1st ex. sess. and RCW 44.28.085 are each amended to read as follows:

MANAGEMENT SURVEYS AND PROGRAM REVIEWS‑-REVIEW OF STATE AUDITOR'S REPORT, RECOMMENDATIONS. The legislative ((~~budget~~)) fiscal services committee shall make management surveys and program reviews as to every public body, officer or employee subject to the provisions of RCW 43.09.290 through 43.09.340. The legislative ((~~budget~~)) fiscal services committee may also make management surveys and program reviews of local school districts, intermediate school districts, and other units of local government receiving state funds as grants-in-aid or as shared revenues. Management surveys for the purposes of this section shall be an independent examination for the purpose of providing the legislature with an evaluation and report of the manner in which any public agency, officer, administrator, or employee has discharged the responsibility to faithfully, efficiently, and effectively administer any legislative purpose of the state. Program reviews for the purpose of this section shall be an examination of state or local government programs to ascertain whether or not such programs continue to serve their intended purposes, are conducted in an efficient and effective manner, or require modification or elimination: PROVIDED, That nothing in this section shall limit the power or duty of the state auditor to report to the legislature as directed by subsection (3) of RCW 43.88.160 as now or hereafter amended. The authority in this section conferred excludes a like authority in the state auditor.

The legislative ((~~budget~~)) fiscal services committee shall receive a copy of each report of examination issued by the state auditor under RCW 43.09.310, shall review all such reports, and shall make such recommendations to the legislature and to the state auditor as it deems appropriate.

Sec. 203. Section 1, chapter 197, Laws of 1973 1st ex. sess. and RCW 44.28.086 are each amended to read as follows:

MANAGEMENT SURVEYS‑-REVIEWS OF PROGRAM GOALS AND OBJECTIVES, PERFORMANCE AUDITS TO BE INCLUDED. The legislative ((~~budget~~)) fiscal services committee authority for management surveys contained in RCW 44.28.085 shall include reviews of program goals and objectives of public bodies, officers or employees to determine conformity with legislative intent and shall include comprehensive performance audits to ensure that agency programs are being conducted in accordance with legislative intent and program goals and objectives.

Sec. 204. Section 2, chapter 197, Laws of 1973 1st ex. sess. and RCW 44.28.087 are each amended to read as follows:

AGENCIES TO FURNISH COMMITTEE WITH PERFORMANCE REPORTS, INTERNAL AUDITS, ETC. All agency reports concerning program performance, including administrative review, quality control, and other internal audit or performance reports, as requested by the legislative ((~~budget~~)) fiscal services committee, shall be furnished by the agency requested to provide such report.

Sec. 205. Section 7, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.070 are each amended to read as follows:

COMMITTEE'S DUTIES WITH RESPECT TO DATA PROCESSING CAPABILITY FOR FISCAL MATTERS. The legislative fiscal services committee shall acquire and maintain a data processing service capability under the exclusive jurisdiction and control of the legislature acting through the committee ((~~and its administrator~~)) for the purpose of providing the legislature and its staff with the type of information required for in-depth analysis and monitoring of state agency expenditures, budgets, and related fiscal matters. ((~~The legislative evaluation and accountability program established in this section may be referred to in this chapter as the LEAP administration.~~))

Sec. 206. Section 8, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.080 are each amended to read as follows:

COMMITTEE'S DUTIES. To carry out ((~~the provisions of RCW 44.48.070 the LEAP administration~~)) this chapter, the legislative fiscal services committee shall provide for:

(1) Automated data bases and application systems in support of legislative requirements to monitor, evaluate, analyze, report, and review;

(2) Maintenance of computer software, application programs, data bases, and related documentation;

(3) Education, training, and programming services;

(4) Procedural documentation support; and

(5) Consulting assistance on special projects.

Sec. 207. Section 9, chapter 373, Laws of 1977 ex. sess. as amended by section 158, chapter 151, Laws of 1979 and RCW 44.48.090 are each amended to read as follows:

COMMITTEE'S POWERS. The legislative fiscal services committee shall have the following powers:

(1) To have timely access, upon written request ((~~of the administrator~~)), to all machine readable, printed, and other data of state agencies relative to expenditures, budgets, and related fiscal matters; and

(2) To suggest changes relative to state accounting and reporting systems to the office of financial management or its successor and to require timely written responses to such suggestions((~~; and~~

(3) To enter into contracts; and when entering into any contract for computer access, make necessary provisions relative to the scheduling of computer time and usage in recognition of the unique requirements and priorities of the legislative process)).

Sec. 208. Section 8, chapter 43, Laws of 1951 as amended by section 8, chapter 206, Laws of 1955 and RCW 44.28.110 are each amended to read as follows:

EXAMINATIONS‑-SUBPOENAS‑-DEPOSITIONS. In the discharge of any duty herein imposed, the legislative fiscal services committee or any personnel under its authority and its subcommittees shall have the authority to examine and inspect all properties, equipment, facilities, files, records and accounts of any state office, department, institution, board, committee, commission or agency, and to administer oaths, issue subpoenas, compel the attendance of witnesses and the production of any papers, books, accounts, documents and testimony, and to cause the deposition of witnesses, either residing within or without the state, to be taken in the manner prescribed by laws for taking depositions in civil actions in the superior courts.

Sec. 209. Section 9, chapter 43, Laws of 1951 and RCW 44.28.120 are each amended to read as follows:

CONTEMPT PROCEEDINGS‑-WITNESSES FAILING TO APPEAR OR TESTIFY. In case of the failure on the part of any person to comply with any subpoena issued in behalf of the legislative fiscal services committee, or on the refusal of any witness to testify to any matters regarding which he may be lawfully interrogated, it shall be the duty of the superior court of any county, or of the judge thereof, on application of the committee, to compel obedience by proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from such court or a refusal to testify therein. PART III

STATE ACTUARY

Sec. 301. Section 19, chapter 105, Laws of 1975-'76 2nd ex. sess. and RCW 44.44.010 are each amended to read as follows:

STATE ACTUARY‑-QUALIFICATIONS‑-APPOINTMENT‑-VACANCY. ((~~(1) There is hereby created an office within the legislative branch to be known as the office of the state actuary.~~

~~(2) The executive head of the office shall be the~~)) The legislature shall employ a state actuary who shall be qualified by education and experience in the field of actuarial science and shall be a member of the American Academy of Actuaries. ((Such person shall be appointed by a special committee of the legislature consisting of: (a) Three members of the senate selected by the president, two of whom shall be members of the majority party and one of whom shall be a member of the minority party; and (b) three members of the house of representatives selected by the speaker, two of whom shall be members of the majority party and one of whom shall be a member of the minority party. The original appointment shall be made not later than ninety days after March 19, 1976. A two-thirds vote of the committee shall be required to make the appointment. (3) If a vacancy occurs in the position of state actuary it shall be filled in the same manner as the original appointment.)) The state actuary shall serve on the staff of the legislative fiscal services committee. The appointment and service of the state actuary shall be in conformance with section 104 of this 1987 act.

Sec. 302. Section 22, chapter 105, Laws of 1975-'76 2nd ex. sess. as amended by section 6, chapter 317, Laws of 1986 and RCW 44.44.040 are each amended to read as follows:

POWERS AND DUTIES OF STATE ACTUARY‑-ACTUARIAL FISCAL NOTES. The state actuary shall have the following powers and duties:

(1) Perform all actuarial services for the department of retirement systems, including all studies required by law. Reimbursement for such services shall be made to the ((~~state actuary~~)) legislative fiscal services committee pursuant to the provisions of RCW 39.34.130 as now or hereafter amended.

(2) Advise the legislature and the governor regarding the benefit provisions, funding policies, and investment policies of the department of retirement systems.

(3) Consult with the legislature and the governor concerning determination of actuarial assumptions used by the department of retirement systems.

(4) Prepare a report, to be known as the actuarial fiscal note, on each pension bill introduced in the legislature which briefly explains the financial impact of the bill. The actuarial fiscal note shall include: (a) The statutorily required contribution for the biennium and the following twenty-five years; (b) the biennial cost of the increased benefits if these exceed the required contribution; and (c) any change in the present value of the unfunded accrued benefits. An actuarial fiscal note shall also be prepared for all amendments which are offered in committee or on the floor of the house of representatives or the senate to any pension bill. However, a majority of the members present may suspend the requirement for an actuarial fiscal note for amendments offered on the floor of the house of representatives or the senate.

(5) Provide such actuarial services to the legislature as may be requested from time to time. PART IV

LEGISLATIVE FISCAL NOTES

Sec. 401. Section 2, chapter 25, Laws of 1977 ex. sess. as amended by section 146, chapter 151, Laws of 1979 and RCW 43.88A.020 are each amended to read as follows:

FISCAL NOTES‑-PREPARATION‑-CONTENTS‑-DUTIES OF LEGISLATIVE FISCAL SERVICES COMMITTEE. The ((~~office of financial management~~)) legislative fiscal services committee shall, in cooperation with appropriate legislative committees and legislative staff, establish a procedure for the provision of fiscal notes on the expected impact of bills and resolutions which increase or decrease or tend to increase or decrease state government revenues or expenditures. Such fiscal notes shall indicate by fiscal year the impact for the remainder of the biennium in which the bill or resolution will first take effect as well as a cumulative forecast of the fiscal impact for the succeeding four fiscal years.

In establishing the fiscal impact called for pursuant to this chapter, the ((~~office of financial management~~)) legislative fiscal services committee shall coordinate the development of fiscal notes with all state agencies affected.

Sec. 402. Section 3, chapter 25, Laws of 1977 ex. sess. as last amended by section 16, chapter 158, Laws of 1986 and RCW 43.88A.030 are each amended to read as follows:

FISCAL NOTES‑-DISTRIBUTION. When a fiscal note is prepared and approved as to form, accuracy, and completeness by the ((~~office of financial management~~)) legislative fiscal services committee, which depicts the expected fiscal impact of a bill or resolution, copies shall be filed immediately with:

(1) The chairperson of the committee to which the bill or resolution was referred upon introduction in the house of origin;

(2) The senate committee on ways and means, or its successor; ((~~and~~))

(3) The house committee((s)) on ((~~revenue and appropriations, or their~~)) ways and means, or its successor((s)); and

(4) The legislative transportation committee, where appropriate.

Whenever possible, such fiscal note shall be provided prior to or at the time the bill or resolution is first heard by the committee of reference in the house of origin.

When a fiscal note has been prepared for a bill or resolution, a copy of the fiscal note shall be placed in the bill books or otherwise attached to the bill or resolution and shall remain with the bill or resolution throughout the legislative process insofar as possible.

Sec. 403. Section 4, chapter 25, Laws of 1977 ex. sess. as amended by section 148, chapter 151, Laws of 1979 and RCW 43.88A.040 are each amended to read as follows:

FISCAL NOTES‑-PREPARATION UPON REQUEST OF ANY LEGISLATOR. The ((~~office of financial management~~)) legislative fiscal services committee shall also provide a fiscal note on any legislative proposal at the request of any legislator. Such fiscal note shall be returned to the requesting legislator, and copies shall be filed with the appropriate legislative committees pursuant to RCW 43.88A.030 at the time such proposed legislation is introduced in either house.

Sec. 404. Section 2, chapter 19, Laws of 1977 ex. sess. as last amended by section 16, chapter 125, Laws of 1984 and RCW 43.132.020 are each amended to read as follows:

LOCAL GOVERNMENT FISCAL NOTES‑-PREPARATION‑-CONTENTS. The ((~~director of financial management or the director's designee~~)) legislative fiscal services committee shall, in cooperation with appropriate legislative committees and legislative staff, establish a mechanism for the determination of the fiscal impact of proposed legislation which if enacted into law would directly or indirectly increase or decrease revenues received or expenditures incurred by counties, cities, towns, or any other political subdivisions of the state. The ((~~office of financial management~~)) legislative fiscal services committee shall, when requested by a member of the state legislature, report in writing as to such fiscal impact and said report shall be known as a "fiscal note".

Such fiscal notes shall indicate by fiscal year the total impact on the subdivisions involved for the first two years the legislation would be in effect and also a cumulative six year forecast of the fiscal impact. Where feasible and applicable, the fiscal note also shall indicate the fiscal impact on each individual county or on a representative sampling of cities, towns, or other political subdivisions.

A fiscal note as defined in this section shall be provided only upon request of any member of the state legislature. A legislator also may request that such a fiscal note be revised to reflect the impact of proposed amendments or substitute bills. Fiscal notes shall be completed within seventy-two hours of the request unless a longer time period is allowed by the requesting legislator. In the event a fiscal note has not been completed within seventy-two hours of a request, a daily report shall be prepared for the requesting legislator by the ((~~director of financial management~~)) legislative fiscal services committee which report summarizes the progress in preparing the fiscal note. ((~~If the request is referred to the director of community development, the daily report shall also include the date and time such referral was made.~~))

Sec. 405. Section 3, chapter 19, Laws of 1977 ex. sess. as last amended by section 10, chapter 6, Laws of 1985 and RCW 43.132.030 are each amended to read as follows:

LOCAL GOVERNMENT FISCAL NOTES‑-PREPARATION‑-COOPERATION OF OTHER PUBLIC AGENCIES. ((The director of financial management is hereby empowered to designate the director of community development as the official responsible for the preparation of fiscal notes authorized and required by this chapter.)) It is the intent of the legislature that when necessary the resources of other state agencies, appropriate legislative staffs, and the various associations of local government may be employed in the development of such fiscal notes.

Sec. 406. Section 4, chapter 19, Laws of 1977 ex. sess. as last amended by section 18, chapter 158, Laws of 1986 and RCW 43.132.040 are each amended to read as follows:

LOCAL GOVERNMENT FISCAL NOTES‑-TRANSMISSION OF COPIES TO DESIGNATED RECIPIENTS. When a fiscal note is prepared and approved as to form and completeness ((~~by the director of financial management, the director shall transmit~~)) under the direction of the legislative fiscal services committee, copies shall be transmitted immediately to:

(1) The requesting legislator;

(2) With respect to proposed legislation held by the senate, the chairperson of the committee which holds or has acted upon the proposed legislation, the chairperson of the ways and means committee, the chairperson of the local government committee, and the secretary of the senate; ((~~and~~))

(3) With respect to proposed legislation held by the house of representatives, the chairperson of the committee which holds or has acted upon the proposed legislation, the chairperson((~~s of the revenue and taxation and appropriations~~)) of the ways and means committee((s)), the chairperson of the local government committee, and the chief clerk of the house of representatives; and

(4) The legislative transportation committee, where appropriate.

Sec. 407. Section 5, chapter 19, Laws of 1977 ex. sess. as last amended by section 19, chapter 158, Laws of 1986 and RCW 43.132.050 are each amended to read as follows:

LOCAL GOVERNMENT FISCAL NOTES‑-TRANSMISSION OF COPIES UPON REQUEST. The ((~~office of financial management~~)) legislative fiscal services committee may make additional copies of the fiscal note available to members of the legislature and others on request.

At the request of any member of the senate or house of representatives, whichever is considering the proposed legislation, and unless it is prohibited by the rules of the body, copies of the fiscal note or a synopsis thereof shall be placed on the members' desks at the time the proposed legislation takes its place on the second reading calendar.

Whenever proposed legislation accompanied by such a fiscal note is passed by either the senate or the house of representatives, the fiscal note shall be transmitted with the bill to the other house. PART V

STATUTORY CROSS-REFERENCES

Sec. 501. Section 13, chapter 36, Laws of 1919 as amended by section 1, chapter 131, Laws of 1985 and by section 50, chapter 259, Laws of 1986 and RCW 18.36.010 are each reenacted and amended to read as follows:

The term "drugless therapeutics," as used in this chapter consists of hydrotherapy, dietetics, electrotherapy, radiography, sanitation, suggestion, mechanical and manual manipulation for the stimulation of physiological and psychological action to establish a normal condition of mind and body, including the use of severance and penetration of the skin for purposes only of withdrawing blood samples for diagnostic purposes (venipuncture), but shall in no way include the giving, prescribing or recommending of pharmaceutic drugs and poisons for internal use, the purpose of this chapter being to confine practitioners under this chapter to drugless therapeutics. The legislative ((~~budget~~)) fiscal services committee shall specifically study the appropriateness of venipuncture within this definition pursuant to the sunset review process provided for in chapter 43.131 RCW. A person shall be considered as practicing within the meaning of this chapter if the person uses, prescribes, directs, or recommends any drugless treatment for the relief of a wound, fracture, bodily injury, or disease, either mental or physical.

The words "certificate" and "license" shall be interchangeable terms in this chapter, but nothing in this section affects the definitions of these terms in chapter 18.120 RCW.

Sec. 502. Section 2, chapter 58, Laws of 1985 and RCW 28A.03.449 are each amended to read as follows:

The office of the superintendent of public instruction may adopt rules waiving a provision of law to remove any financial disincentives to the cooperative projects set forth in RCW 28A.03.448 limited to those projects, including but not limited to, the following:

(1) Eliminating positions and salary and compensation for the purpose of determining compliance with salary lid or fair share requirements;

(2) Modifying the legislative ((~~evaluation and accountability program~~)) fiscal services committee documents to reflect necessary position changes; and

(3) When the joint operation of programs or services includes the teaching of all or substantially all of the curriculum for a particular grade or grades in only one local school district, determining that the affected students are attending school in the district in which they reside for the purposes of RCW 28A.41.130 and 28A.41.140 and chapter 28A.44 RCW.

Sec. 503. Section 28A.61.030, chapter 223, Laws of 1969 ex. sess. as last amended by section 1, chapter 187, Laws of 1983 and RCW 28A.61.030 are each amended to read as follows:

The school directors' association shall have the power:

(1) To prepare and adopt, amend and repeal a constitution and rules and regulations, and bylaws for its own organization including county or regional units and for its government and guidance: PROVIDED, That action taken with respect thereto is consistent with the provisions of this chapter or with other provisions of law;

(2) To arrange for and call such meetings of the association or of the officers and committees thereof as are deemed essential to the performance of its duties;

(3) To provide for the payment of travel and subsistence expenses incurred by members and/or officers of the association and association staff while engaged in the performance of duties under direction of the association in the manner provided by RCW 28A.58.310;

(4) To employ an executive secretary and other staff and pay such employees out of the funds of the association;

(5) To conduct studies and disseminate information therefrom relative to increased efficiency in local school board administration;

(6) To buy, sell or exchange such personal and real property as necessary for the efficient operation of the association;

(7) To purchase liability insurance for school directors, which insurance may indemnify said directors against any or all liabilities for personal or bodily injuries and property damage arising from their acts or omissions while performing or while in good faith purporting to perform their official duties as school directors;

(8) Upon request by a local school district board(s) of directors, to make available on a cost reimbursable contract basis (a) specialized services, (b) research information, and (c) consultants to advise and assist district board(s) in particular problem areas: PROVIDED, That such services, information, and consultants are not already available from other state agencies, educational service districts, or from the information and research services authorized by RCW 28A.58.530: PROVIDED FURTHER, That any such contract shall be filed with the office of financial management and the legislative ((~~budget~~)) fiscal services committee prior to the date any work commences under any such contract.

Sec. 504. Section 4, chapter 74, Laws of 1983 1st ex. sess. and RCW 28B.15.766 are each amended to read as follows:

No loans shall be made after August 23, 1989, until the program is reviewed by the legislative ((~~budget~~)) fiscal services committee and is reenacted by the legislature.

Sec. 505. Section 19, chapter 120, Laws of 1983 and RCW 39.19.900 are each amended to read as follows:

(1) The legislative ((~~budget~~)) fiscal services committee shall cause to be conducted an initial program and fiscal review of the minority and women's business enterprise program under this chapter. Such program and fiscal review shall be completed and a report prepared by June 30, 1986. Upon completion of the report, the legislative ((~~budget~~)) fiscal services committee shall transmit copies of the report to the office of minority and women's business enterprises and to the office of financial management. Each office shall transmit its comments to the legislative ((~~budget~~)) fiscal services committee within thirty days. The legislative ((~~budget~~)) fiscal services committee shall prepare a final report, including the offices' comments, and transmit copies of such report to both offices, to the governor, and to all members of the legislature.

(2) The select joint committee on sunset, as defined in RCW 43.131.120, shall conduct a preliminary sunset program and fiscal review of the minority and women's business enterprise program under this chapter to determine if such program shall be scheduled for termination and full sunset review under chapter 43.131 RCW. Such preliminary sunset program and fiscal review shall be completed and a report prepared by June 30, 1990.

Sec. 506. Section 1, chapter 191, Laws of 1974 ex. sess. as last amended by section 3, chapter 61, Laws of 1979 ex. sess. and RCW 39.29.010 are each amended to read as follows:

All personal service contracts, including renewals and amendments of existing contracts, entered into by any state officer or activity of the executive and judicial branches of state government, including state agencies, departments, offices, divisions, boards, commissions, and educational, correctional and other types of institutions, shall be filed with the office of financial management and the legislative ((~~budget~~)) fiscal services committee at least ten days prior to the date any work commences under such contracts regardless of the source of funds. The director of financial management may exempt on a limited basis specific classes of personal service contracts involving activities of the executive and judicial branches after preparation of documented justification and consultation with the legislative ((~~budget~~)) fiscal services committee: PROVIDED, That approval of the exemption is granted prior to commencement of the contract work.

In special emergency cases when work commencement is clearly a major and overriding factor and immediate contract action is mandatory, filing may be delayed for personal service contracts involving executive and judicial branches by the director of financial management after consultation with the legislative ((~~auditor~~)) fiscal services committee: PROVIDED, That such filing shall be made prior to commencement of the contract work with documented justification for the filing delay.

Standing and other committees of the legislature and officers or employees of the legislative branch shall file personal service contracts with the legislative ((~~budget~~)) fiscal services committee and the office of financial management in accordance with the ten day time limitation set forth in this section. Requests by legislative committees or personnel for either exemptions or delays in filing individual personal service contracts shall be forwarded to the legislative ((~~budget~~)) fiscal services committee for review and maintenance of a central control file for use in preparation of summary reports on personal service contracts as directed by the legislature. Filing of personal service contracts delayed for emergency purposes shall be made not more than five days after commencement of the contract work involved.

Sec. 507. Section 1, chapter 11, Laws of 1972 ex. sess. as last amended by section 1, chapter 221, Laws of 1985 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~~)) fiscal services 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) 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 eighty-seven 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. 508. Section 3, chapter 209, Laws of 1969 ex. sess. as last amended by section 5, chapter 13, Laws of 1985 and RCW 41.26.030 are each amended to read as follows:

As used in this chapter, unless a different meaning is plainly required by the context:

(1) "Retirement system" means the "Washington law enforcement officers' and fire fighters' retirement system" provided herein.

(2) (a) "Employer" for persons who establish membership in the retirement system on or before September 30, 1977, means the legislative authority of any city, town, county or district or the elected officials of any municipal corporation that employs any law enforcement officer and/or fire fighter, any authorized association of such municipalities, and, except for the purposes of RCW 41.26.150, any labor guild, association, or organization, which represents the fire fighters or law enforcement officers of at least seven cities of over 20,000 population and the membership of each local lodge or division of which is composed of at least sixty percent law enforcement officers or fire fighters as defined in this chapter.

(b) "Employer" for persons who establish membership in the retirement system on or after October 1, 1977, means the legislative authority of any city, town, county, or district or the elected officials of any municipal corporation that employs any law enforcement officer and/or fire fighter.

(3) "Law enforcement officer" means any person who is serving on a full time, fully compensated basis as a county sheriff or deputy sheriff, including sheriffs or deputy sheriffs serving under a different title pursuant to a county charter, city police officer, or town marshal or deputy marshal, with the following qualifications:

(a) No person who is serving in a position that is basically clerical or secretarial in nature, and who is not commissioned shall be considered a law enforcement officer;

(b) Only those deputy sheriffs, including those serving under a different title pursuant to county charter, who have successfully completed a civil service examination for deputy sheriff or the equivalent position, where a different title is used, and those persons serving in unclassified positions authorized by RCW 41.14.070 except a private secretary will be considered law enforcement officers;

(c) Only such full time commissioned law enforcement personnel as have been appointed to offices, positions, or ranks in the police department which have been specifically created or otherwise expressly provided for and designated by city charter provision or by ordinance enacted by the legislative body of the city shall be considered city police officers; and

(d) The term "law enforcement officer" also includes the executive secretary of a labor guild, association or organization (which is an employer under RCW 41.26.030(2) as now or hereafter amended) if such individual has five years previous membership in the retirement system established in chapter 41.20 RCW: PROVIDED, That for persons who establish membership in the retirement system on or after October 1, 1977, the provisions of this subparagraph shall not apply.

(4) "Fire fighter" means:

(a) any person who is serving on a full time, fully compensated basis as a member of a fire department of an employer and who is serving in a position which requires passing a civil service examination for fire fighter, or fireman if this title is used by the department, and who is actively employed as such;

(b) anyone who is actively employed as a full time fire fighter where the fire department does not have a civil service examination;

(d) any full time executive secretary of an association of fire protection districts authorized under RCW 52.12.031: PROVIDED, That for persons who establish membership in the retirement system on or after October 1, 1977, the provisions of this subparagraph shall not apply;

(e) the executive secretary of a labor guild, association or organization (which is an employer under RCW 41.26.030(2) as now or hereafter amended), if such individual has five years previous membership in a retirement system established in chapter 41.16 or 41.18 RCW: PROVIDED, That for persons who establish membership in the retirement system on or after October 1, 1977, the provisions of this subparagraph shall not apply;

(f) any person who is serving on a full time, fully compensated basis for an employer, as a fire dispatcher, in a department in which, on March 1, 1970, a dispatcher was required to have passed a civil service examination for fireman or fire fighter; and

(g) any person who on March 1, 1970, was employed on a full time, fully compensated basis by an employer, and who on May 21, 1971 was making retirement contributions under the provisions of chapter 41.16 or 41.18 RCW.

(5) "Retirement board" means the Washington public employees' retirement system board established in chapter 41.40 RCW, including two members of the retirement system and two employer representatives as provided for in RCW 41.26.050. The retirement board shall be called the Washington law enforcement officers' and fire fighters' retirement board and may enter in legal relationships in that name. Any legal relationships entered into in that name prior to the adoption of this 1972 amendatory act are hereby ratified.

(6) "Surviving spouse" means the surviving widow or widower of a member. The word shall not include the divorced spouse of a member.

(7) "Child" or "children" whenever used in this chapter means every natural born child and stepchild where that relationship was in existence prior to the date benefits are payable under this chapter, posthumous child, child legally adopted or made a legal ward of a member prior to the date benefits are payable under this chapter, and illegitimate child legitimized prior to the date any benefits are payable under this chapter, all while unmarried, and either under the age of eighteen years or mentally or physically handicapped as determined by the retirement board except a handicapped person in the full time care of a state institution. A person shall also be deemed to be a child up to and including the age of twenty years and eleven months while attending any high school, college, or vocational or other educational institution accredited, licensed, or approved by the state, in which it is located, including the summer vacation months and all other normal and regular vacation periods at the particular educational institution after which the child returns to school.

(8) "Member" means any fire fighter, law enforcement officer, or other person as would apply under subsections (3) or (4) of this section whose membership is transferred to the Washington law enforcement officers' and fire fighters' retirement system on or after March 1, 1970, and every law enforcement officer and fire fighter who is employed in that capacity on or after such date.

(9) "Retirement fund" means the "Washington law enforcement officers' and fire fighters' retirement system fund" as provided for herein.

(10) "Employee" means any law enforcement officer or fire fighter as defined in subsections (3) and (4) above.

(11) (a) "Beneficiary" for persons who establish membership in the retirement system on or before September 30, 1977, means any person in receipt of a retirement allowance, disability allowance, death benefit, or any other benefit described herein.

(b) "Beneficiary" for persons who establish membership in the retirement system on or after October 1, 1977, means any person in receipt of a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer by another person.

(12) (a) "Final average salary" for persons who establish membership in the retirement system on or before September 30, 1977, means (i) for a member holding the same position or rank for a minimum of twelve months preceding the date of retirement, the basic salary attached to such same position or rank at time of retirement; (ii) for any other member, including a civil service member who has not served a minimum of twelve months in the same position or rank preceding the date of retirement, the average of the greatest basic salaries payable to such member during any consecutive twenty-four month period within such member's last ten years of service for which service credit is allowed, computed by dividing the total basic salaries payable to such member during the selected twenty-four month period by twenty-four; (iii) in the case of disability of any member, the basic salary payable to such member at the time of disability retirement; (iv) in the case of a member who hereafter vests pursuant to RCW 41.26.090, the basic salary payable to such member at the time of vesting.

(b) "Final average salary" for persons who establish membership in the retirement system on or after October 1, 1977, means the monthly average of the member's basic salary for the highest consecutive sixty months of service prior to such member's retirement, termination, or death. Periods constituting authorized unpaid leaves of absence may not be used in the calculation of final average salary.

(13) (a) "Basic salary" for persons who establish membership in the retirement system on or before September 30, 1977, means the basic monthly rate of salary or wages, including longevity pay but not including overtime earnings or special salary or wages, upon which pension or retirement benefits will be computed and upon which employer contributions and salary deductions will be based.

(b) "Basic salary" for persons who establish membership in the retirement system on or after October 1, 1977, means salaries or wages earned by a member during a payroll period for personal services, including overtime payments, and shall include wages and salaries deferred under provisions established pursuant to sections 403(b), 414(h), and 457 of the United States Internal Revenue Code, but shall exclude lump sum payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, or any form of severance pay: PROVIDED, That in any year in which a member serves in the legislature the member shall have the option of having such member's basic salary be the greater of:

(i) the basic salary the member would have received had such member not served in the legislature; or

(ii) such member's actual basic salary received for nonlegislative public employment and legislative service combined. Any additional contributions to the retirement system required because basic salary under subparagraph (i) of this subsection is greater than basic salary under subparagraph (ii) of this subsection shall be paid by the member for both member and employer contributions.

(14) (a) "Service" for persons who establish membership in the retirement system on or before September 30, 1977, means all periods of employment for an employer as a fire fighter or law enforcement officer, for which compensation is paid, together with periods of suspension not exceeding thirty days in duration. For the purposes of this chapter service shall also include service in the armed forces of the United States as provided in RCW 41.26.190. Credit shall be allowed for all months of service rendered by a member from and after the member's initial commencement of employment as a fire fighter or law enforcement officer, during which the member worked for seventy or more hours, or was on disability leave or disability retirement. Only months of service shall be counted in the computation of any retirement allowance or other benefit provided for in this chapter. In addition to the foregoing, for members retiring after May 21, 1971 who were employed under the coverage of a prior pension act before March 1, 1970, "service" shall include (i) such military service not exceeding five years as was creditable to the member as of March 1, 1970, under the member's particular prior pension act, and (ii) such other periods of service as were then creditable to a particular member under the provisions of RCW 41.18.165, 41.20.160 or 41.20.170. However, in no event shall credit be allowed for any service rendered prior to March 1, 1970, where the member at the time of rendition of such service was employed in a position covered by a prior pension act, unless such service, at the time credit is claimed therefor, is also creditable under the provisions of such prior act: PROVIDED, That if such member's prior service is not creditable due to the withdrawal of his contributions plus accrued interest thereon from a prior pension system, such member shall be credited with such prior service, as a law enforcement officer or fire fighter, by paying to the Washington law enforcement officers' and fire fighters' retirement system, on or before March 1, 1975, an amount which is equal to that which was withdrawn from the prior system by such member, as a law enforcement officer or fire fighter: PROVIDED FURTHER, That if such member's prior service is not creditable because, although employed in a position covered by a prior pension act, such member had not yet become a member of the pension system governed by such act, such member shall be credited with such prior service as a law enforcement officer or fire fighter, by paying to the Washington law enforcement officers' and fire fighters' retirement system, on or before March 1, 1975, an amount which is equal to the employer's contributions which would have been required under the prior act when such service was rendered if the member had been a member of such system during such period: AND PROVIDED FURTHER, That where a member is employed by two employers at the same time, he shall only be credited with service to one such employer for any month during which he rendered such dual service.

Members of the retirement system who are elected or appointed to a state elective position may elect to continue to be members of this retirement system.

Years of service shall be determined by dividing the total number of months of service by twelve. Any fraction of a year of service as so determined shall be taken into account in the computation of such retirement allowance or benefits.

If a member receives basic salary from two or more employers during any calendar month, the individual shall receive one month's service credit during any calendar month in which multiple service for ninety or more hours is rendered.

(15) "Accumulated contributions" means the employee's contributions made by a member plus accrued interest credited thereon.

(16) "Actuarial reserve" means a method of financing a pension or retirement plan wherein reserves are accumulated as the liabilities for benefit payments are incurred in order that sufficient funds will be available on the date of retirement of each member to pay the member's future benefits during the period of retirement.

(17) "Actuarial valuation" means a mathematical determination of the financial condition of a retirement plan. It includes the computation of the present monetary value of benefits payable to present members, and the present monetary value of future employer and employee contributions, giving effect to mortality among active and retired members and also to the rates of disability, retirement, withdrawal from service, salary and interest earned on investments.

(18) "Disability board" means either the county disability board or the city disability board established in RCW 41.26.110 for persons who establish membership in the retirement system on or before September 30, 1977.

(19) "Disability leave" means the period of six months or any portion thereof during which a member is on leave at an allowance equal to the member's full salary prior to the commencement of disability retirement. The definition contained in this subsection shall apply only to persons who establish membership in the retirement system on or before September 30, 1977.

(20) "Disability retirement" for persons who establish membership in the retirement system on or before September 30, 1977, means the period following termination of a member's disability leave, during which the member is in receipt of a disability retirement allowance.

(21) "Position" means the employment held at any particular time, which may or may not be the same as civil service rank.

(22) "Medical services" for persons who establish membership in the retirement system on or before September 30, 1977, shall include the following as minimum services to be provided. Reasonable charges for these services shall be paid in accordance with RCW 41.26.150.

(a) Hospital expenses: These are the charges made by a hospital, in its own behalf, for

(i) Board and room not to exceed semiprivate room rate unless private room is required by the attending physician due to the condition of the patient.

(ii) Necessary hospital services, other than board and room, furnished by the hospital.

(b) Other medical expenses: The following charges are considered "other medical expenses", provided that they have not been considered as "hospital expenses".

(i) The fees of the following:

(A) A physician or surgeon licensed under the provisions of chapter 18.71 RCW;

(B) An osteopath licensed under the provisions of chapter 18.57 RCW;

(ii) The charges of a registered graduate nurse other than a nurse who ordinarily resides in the member's home, or is a member of the family of either the member or the member's spouse.

(iii) The charges for the following medical services and supplies:

(A) Drugs and medicines upon a physician's prescription;

(B) Diagnostic x-ray and laboratory examinations;

(D) Anesthesia and oxygen;

(E) Rental of iron lung and other durable medical and surgical equipment;

(F) Artificial limbs and eyes, and casts, splints, and trusses;

(G) Professional ambulance service when used to transport the member to or from a hospital when he is injured by an accident or stricken by a disease;

(H) Dental charges incurred by a member who sustains an accidental injury to his teeth and who commences treatment by a legally licensed dentist within ninety days after the accident;

(I) Nursing home confinement or hospital extended care facility;

(J) Physical therapy by a registered physical therapist;

(K) Blood transfusions, including the cost of blood and blood plasma not replaced by voluntary donors;

(L) An optometrist licensed under the provisions of chapter 18.53 RCW.

(23) "Regular interest" means such rate as the director may determine.

(24) "Retiree" for persons who establish membership in the retirement system on or after October 1, 1977, means any member in receipt of a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer by such member.

(25) "Department" means the department of retirement systems created in chapter 41.50 RCW.

(26) "Director" means the director of the department.

(27) "State actuary" or "actuary" means the person appointed pursuant to RCW 44.44.010((~~(2)~~)).

(28) "State elective position" means any position held by any person elected or appointed to state-wide office or elected or appointed as a member of the legislature.

Sec. 509. Section 6, chapter 13, Laws of 1985 and RCW 41.32.010 are each amended to read as follows:

As used in this chapter, unless a different meaning is plainly required by the context:

(1) (a) "Accumulated contributions" for persons who establish membership in the retirement system on or before September 30, 1977, means the sum of all regular annuity contributions with regular interest thereon.

(b) "Accumulated contributions" for persons who establish membership in the retirement system on or after October 1, 1977, means the sum of all contributions standing to the credit of a member in the member's individual account together with the regular interest thereon.

(2) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of such mortality tables and regulations as shall be adopted by the director and regular interest.

(3) "Annuity" means the moneys payable per year during life by reason of accumulated contributions of a member.

(4) "Annuity fund" means the fund in which all of the accumulated contributions of members are held.

(5) "Annuity reserve fund" means the fund to which all accumulated contributions are transferred upon retirement.

(6) (a) "Beneficiary" for persons who establish membership in the retirement system on or before September 30, 1977, means any person in receipt of a retirement allowance or other benefit provided by this chapter.

(7) "Contract" means any agreement for service and compensation between a member and an employer.

(8) "Creditable service" means membership service plus prior service for which credit is allowable. This subsection shall apply only to persons who establish membership in the retirement system on or before September 30, 1977.

(9) "Dependent" means receiving one-half or more of support from a member.

(10) "Disability allowance" means monthly payments during disability. This subsection shall apply only to persons who establish membership in the retirement system on or before September 30, 1977.

(11) (a) (i) "Earnable compensation" for persons who establish membership in the retirement system on or before September 30, 1977, means all salaries and wages paid by an employer to an employee member of the retirement system for personal services rendered during a fiscal year. In all cases where compensation includes maintenance the employer shall fix the value of that part of the compensation not paid in money: PROVIDED, That retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wages which the individual would have earned during a payroll period shall be considered earnable compensation and the individual shall receive the equivalent service credit: PROVIDED FURTHER, That if a leave of absence, without pay, is taken by a member for the purpose of serving as a member of the state legislature, and such member has served in the legislature five or more years, the salary which would have been received for the position from which the leave of absence was taken shall be considered as compensation earnable if the employee's contribution thereon is paid by the employee. In addition, where a member has been a member of the state legislature for five or more years, earnable compensation for the member's two highest compensated consecutive years of service shall include a sum not to exceed thirty-six hundred dollars for each of such two consecutive years, regardless of whether or not legislative service was rendered during those two years.

(ii) For members employed less than full time under written contract with a school district in an instructional position, for which the member receives service credit of less than one year in both of the years used to determine the earnable compensation used for computing benefits due under RCW 41.32.497, 41.32.498, and 41.32.520, earnable compensation means the compensation the member would have received in the same position if employed on a regular full-time basis for the same contract period. For the purposes of this subsection, the term "instructional position" means a position in which more than seventy-five percent of the member's time is spent in preparation for and in classroom instruction. Earnable compensation shall be so defined only for the purpose of the calculation of retirement benefits and only as necessary to insure that members who receive fractional service credit under RCW 41.32.270 receive benefits proportional to those received by members who have received full-time service credit.

(b) "Earnable compensation" for persons who establish membership in the retirement system on or after October 1, 1977, means salaries or wages earned by a member during a payroll period for personal services, including overtime payments, and shall include wages and salaries deferred under provisions established pursuant to sections 403(b), 414(h), and 457 of the United States Internal Revenue Code, but shall exclude lump sum payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, or any form of severance pay: PROVIDED, That retroactive payments to an individual by an employer on reinstatement of the employee in a position or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wages which the individual would have earned during a payroll period shall be considered earnable compensation, to the extent provided above, and the individual shall receive the equivalent service credit: PROVIDED FURTHER, That in any year in which a member serves in the legislature the member shall have the option of having such member's earnable compensation be the greater of:

(i) the earnable compensation the member would have received had such member not served in the legislature; or

(ii) such member's actual earnable compensation received for teaching and legislative service combined. Any additional contributions to the retirement system required because compensation earnable under subparagraph (i) of this subsection is greater than compensation earnable under subparagraph (ii) of this subsection shall be paid by the member for both member and employer contributions.

(12) "Employer" means the state of Washington, the school district, or any agency of the state of Washington by which the member is paid.

(13) "Fiscal year" means a year which begins July 1st and ends June 30th of the following year.

(14) "Former state fund" means the state retirement fund in operation for teachers under chapter 187, Laws of 1923, as amended.

(15) "Local fund" means any of the local retirement funds for teachers operated in any school district in accordance with the provisions of chapter 163, Laws of 1917 as amended.

(16) "Member" means any teacher included in the membership of the retirement system. Also, any other employee of the public schools who, on July 1, 1947, had not elected to be exempt from membership and who, prior to that date, had by an authorized payroll deduction, contributed to the annuity fund.

(17) "Membership service" means service rendered subsequent to the first day of eligibility of a person to membership in the retirement system: PROVIDED, That where a member is employed by two or more employers the individual shall only receive one month's service credit during any calendar month in which multiple service is rendered. The provisions of this subsection shall apply only to persons who establish membership in the retirement system on or before September 30, 1977.

(18) "Pension" means the moneys payable per year during life from the pension reserve fund.

(19) "Pension reserve fund" is a fund in which shall be accumulated an actuarial reserve adequate to meet present and future pension liabilities of the system and from which all pension obligations are to be paid.

(20) "Prior service" means service rendered prior to the first date of eligibility to membership in the retirement system for which credit is allowable. The provisions of this subsection shall apply only to persons who establish membership in the retirement system on or before September 30, 1977.

(21) "Prior service contributions" means contributions made by a member to secure credit for prior service. The provisions of this subsection shall apply only to persons who establish membership in the retirement system on or before September 30, 1977.

(22) "Public school" means any institution or activity operated by the state of Washington or any instrumentality or political subdivision thereof employing teachers, except the University of Washington and Washington State University.

(23) "Regular contributions" means the amounts required to be deducted from the compensation of a member and credited to the member's individual account in the annuity fund. This subsection shall apply only to persons establishing membership in the retirement system on or before September 30, 1977.

(24) "Regular interest" means such rate as the director may determine.

(25) (a) "Retirement allowance" for persons who establish membership in the retirement system on or before September 30, 1977, means the sum of annuity and pension or any optional benefits payable in lieu thereof.

(b) "Retirement allowance" for persons who establish membership in the retirement system on or after October 1, 1977, means monthly payments to a retiree or beneficiary as provided in this chapter.

(26) "Retirement system" means the Washington state teachers' retirement system.

(27) (a) "Service" means the time during which a member has been employed by an employer for compensation: PROVIDED, That where a member is employed by two or more employers the individual shall only receive one month's service credit during any calendar month in which multiple service is rendered.

(b) "Service" for persons who establish membership in the retirement system on or after October 1, 1977, means periods of employment by a member for one or more employers for which earnable compensation is earned for ninety or more hours per calendar month. Members shall receive twelve months of service for each contract year or school year of employment.

Any person who is a member of the teachers' retirement system and who is elected or appointed to a state elective position may continue to be a member of the retirement system and continue to receive service credit for the time spent in a state elective position by making the required member contributions.

When an individual is employed by two or more employers the individual shall only receive one month's service credit during any calendar month in which multiple service for ninety or more hours is rendered.

Notwithstanding RCW 41.32.240, teachers covered by RCW 41.32.755 through 41.32.825, who render service need not serve for ninety days to obtain membership so long as the required contribution is submitted for such ninety-day period. Where a member did not receive service credit under RCW 41.32.775 through 41.32.825 due to the ninety-day period in RCW 41.32.240 the member may receive service credit for that period so long as the required contribution is submitted for the period. Anyone entering membership on or after October 1, 1977, and prior to July 1, 1979, shall have until June 30, 1980, to make the required contribution in one lump sum.

(28) "Survivors' benefit fund" means the fund from which survivor benefits are paid to dependents of deceased members. This subsection shall apply only to persons establishing membership in the retirement system on or before September 30, 1977.

(29) "Teacher" means any person qualified to teach who is engaged by a public school in an instructional, administrative, or supervisory capacity. The term includes state, educational service district, and school district superintendents and their assistants and all employees certificated by the superintendent of public instruction; and in addition thereto any full time school doctor who is employed by a public school and renders service of an instructional or educational nature.

(30) "Average final compensation" for persons who establish membership in the retirement system on or after October 1, 1977, means the member's average earnable compensation of the highest consecutive sixty months of service prior to such member's retirement, termination, or death. Periods constituting authorized leaves of absence may not be used in the calculation of average final compensation.

(31) "Retiree" for persons who establish membership in the retirement system on or after October 1, 1977, means any member in receipt of a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer by such member.

(32) "Department" means the department of retirement systems created in chapter 41.50 RCW.

(33) "Director" means the director of the department.

(34) "State elective position" means any position held by any person elected or appointed to state-wide office or elected or appointed as a member of the legislature.

(35) "State actuary" or "actuary" means the person appointed pursuant to RCW 44.44.010((~~(2)~~)).

(36) "Retirement board" means the director of retirement systems.

Sec. 510. Section 1, chapter 274, Laws of 1947 as last amended by section 7, chapter 13, Laws of 1985 and RCW 41.40.010 are each amended to read as follows:

As used in this chapter, unless a different meaning is plainly required by the context:

(1) "Retirement system" means the public employees' retirement system provided for in this chapter.

(2) "Retirement board" means the board provided for in this chapter and chapter 41.26 RCW.

(3) "State treasurer" means the treasurer of the state of Washington.

(4) (a) "Employer" for persons who establish membership in the retirement system on or before September 30, 1977, means every branch, department, agency, commission, board, and office of the state, any political subdivision or association of political subdivisions of the state admitted into the retirement system, and legal entities authorized by RCW 35.63.070 and 36.70.060 or chapter 39.34 RCW as now or hereafter amended; and the term shall also include any labor guild, association, or organization the membership of a local lodge or division of which is comprised of at least forty percent employees of an employer (other than such labor guild, association, or organization) within this chapter. The term may also include any city of the first class that has its own retirement system.

(b) "Employer" for persons who establish membership in the retirement system on or after October 1, 1977, means every branch, department, agency, commission, board, and office of the state, and any political subdivision and municipal corporation of the state admitted into the retirement system, including public agencies created pursuant to RCW 35.63.070, 36.70.060, and 39.34.030.

(5) "Member" means any employee included in the membership of the retirement system, as provided for in RCW 41.40.120.

(6) "Original member" of this retirement system means:

(a) Any person who became a member of the system prior to April 1, 1949;

(b) Any person who becomes a member through the admission of an employer into the retirement system on and after April 1, 1949, and prior to April 1, 1951;

(c) Any person who first becomes a member by securing employment with an employer prior to April 1, 1951, provided the member has rendered at least one or more years of service to any employer prior to October 1, 1947;

(d) Any person who first becomes a member through the admission of an employer into the retirement system on or after April 1, 1951, provided, such person has been in the regular employ of the employer for at least six months of the twelve-month period preceding the said admission date;

(e) Any member who has restored all contributions that may have been withdrawn as provided by RCW 41.40.150 and who on the effective date of the individual's retirement becomes entitled to be credited with ten years or more of membership service except that the provisions relating to the minimum amount of retirement allowance for the member upon retirement at age seventy as found in RCW 41.40.190(4) shall not apply to the member;

(f) Any member who has been a contributor under the system for two or more years and who has restored all contributions that may have been withdrawn as provided by RCW 41.40.150 and who on the effective date of the individual's retirement has rendered five or more years of service for the state or any political subdivision prior to the time of the admission of the employer into the system; except that the provisions relating to the minimum amount of retirement allowance for the member upon retirement at age seventy as found in RCW 41.40.190(4) shall not apply to the member.

(7) "New member" means a person who becomes a member on or after April 1, 1949, except as otherwise provided in this section.

(8) (a) "Compensation earnable" for persons who establish membership in the retirement system on or before September 30, 1977, means salaries or wages earned during a payroll period for personal services and where the compensation is not all paid in money, maintenance compensation shall be included upon the basis of the schedules established by the member's employer: PROVIDED, That retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wage which the individual would have earned during a payroll period shall be considered compensation earnable and the individual shall receive the equivalent service credit: PROVIDED FURTHER, That if a leave of absence is taken by an individual for the purpose of serving in the state legislature, the salary which would have been received for the position from which the leave of absence was taken, shall be considered as compensation earnable if the employee's contribution is paid by the employee and the employer's contribution is paid by the employer or employee.

(b) "Compensation earnable" for persons who establish membership in the retirement system on or after October 1, 1977, means salaries or wages earned by a member during a payroll period for personal services, including overtime payments, and shall include wages and salaries deferred under provisions established pursuant to sections 403(b), 414(h), and 457 of the United States Internal Revenue Code, but shall exclude nonmoney maintenance compensation and lump sum payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, or any form of severance pay: PROVIDED, That retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wage which the individual would have earned during a payroll period shall be considered compensation earnable to the extent provided above, and the individual shall receive the equivalent service credit: PROVIDED FURTHER, That in any year in which a member serves in the legislature, the member shall have the option of having such member's compensation earnable be the greater of:

(i) the compensation earnable the member would have received had such member not served in the legislature; or

(ii) such member's actual compensation earnable received for nonlegislative public employment and legislative service combined. Any additional contributions to the retirement system required because compensation earnable under subparagraph (i) of this subsection is greater than compensation earnable under subparagraph (ii) of this subsection shall be paid by the member for both member and employer contributions.

(9) (a) "Service" for persons who establish membership in the retirement system on or before September 30, 1977, means periods of employment rendered to any employer for which compensation is paid, and includes time spent in office as an elected or appointed official of an employer. Full time work for seventy hours or more in any given calendar month shall constitute one month of service. Only months of service shall be counted in the computation of any retirement allowance or other benefit provided for in this chapter. Years of service shall be determined by dividing the total number of months of service by twelve. Any fraction of a year of service as so determined shall be taken into account in the computation of such retirement allowance or benefits.

Members employed by the state school for the blind, or the state school for the deaf shall receive twelve months of service for each contract year or school year of employment commencing on or after June 15, 1979.

Each member who is employed by an institution of higher education or a community college shall receive twelve months of service for each academic year of employment commencing on or after June 15, 1979, in which the member makes member contributions under this chapter for each month of such academic year, and the member is employed in a position which is restricted as to duration by the employer to the academic year.

Service by a state employee officially assigned by the state on a temporary basis to assist another public agency, shall be considered as service as a state employee: PROVIDED, That service to any other public agency shall not be considered service as a state employee if such service has been used to establish benefits in any other public retirement system: PROVIDED FURTHER, That an individual shall receive no more than a total of twelve months of service credit during any calendar year: PROVIDED FURTHER, That where an individual is employed by two or more employers the individual shall only receive one months service credit during any calendar month in which multiple service for seventy or more hours is rendered.

During the regular contract year or school year of employment, members employed by school districts shall receive service credit in any month in which the school is closed for a vacation period of five calendar days or more. The member shall have been employed or on paid leave of absence for at least three and one-half hours each day the school was open or shall have received compensation for service averaging at least three and one-half hours for each such day.

(b) "Service" for persons who establish membership in the retirement system on or after October 1, 1977, means periods of employment by a member for one or more employers for which compensation earnable is earned for ninety or more hours per calendar month.

During the regular contract year or school year of employment, members employed by school districts shall receive service credit in any month in which the school is closed for a vacation period of five calendar days or more. The member shall have been employed or on paid leave of absence for at least four and one-half hours each day the school was open or shall have received compensation for service averaging at least four and one-half hours for each such day.

Members employed by school districts, the state school for the blind, the state school for the deaf, institutions of higher education, or community colleges shall receive twelve months of service for each contract year or school year of employment.

Service in any state elective position shall be deemed to be full time service, except that persons serving in state elective positions who are members of the teachers' retirement system or law enforcement officers' and fire fighters' retirement system at the time of election or appointment to such position may elect to continue membership in the teachers' retirement system or law enforcement officers' and fire fighters' retirement system.

A member shall receive a total of not more than twelve months of service for such calendar year: PROVIDED, That when an individual is employed by two or more employers the individual shall only receive one month's service credit during any calendar month in which multiple service for ninety or more hours is rendered.

(10) "Prior service" means all service of an original member rendered to any employer prior to October 1, 1947.

(11) "Membership service" means:

(a) All service rendered, as a member, after October 1, 1947;

(b) All service after October 1, 1947, to any employer prior to the time of its admission into the retirement system: PROVIDED, That an amount equal to the employer and employee contributions which would have been paid to the retirement system on account of such service shall have been paid to the retirement system with interest (as computed by the department) on the employee's portion prior to retirement of such person, by the employee or his employer, except as qualified by RCW 41.40.120: PROVIDED FURTHER, That employer contributions plus employee contributions with interest submitted by the employee under this subsection shall be placed in the employee's individual account in the employees' savings fund and be treated as any other contribution made by the employee, with the exception that the contributions submitted by the employee in payment of the employer's obligation, together with the interest the director may apply to the employer's contribution, shall be excluded from the calculation of the member's annuity in the event the member selects a benefit with an annuity option;

(c) Service not to exceed six consecutive months of probationary service rendered after April 1, 1949, and prior to becoming a member, in the case of any member, upon payment in full by such member of the total amount of the employer's contribution to the retirement fund which would have been required under the law in effect when such probationary service was rendered if the member had been a member during such period, except that the amount of the employer's contribution shall be calculated by the director based on the first month's compensation earnable as a member;

(d) Service not to exceed six consecutive months of probationary service, rendered after October 1, 1947, and before April 1, 1949, and prior to becoming a member, in the case of any member, upon payment in full by such member of five percent of such member's salary during said period of probationary service, except that the amount of the employer's contribution shall be calculated by the director based on the first month's compensation earnable as a member.

(12) (a) "Beneficiary" for persons who establish membership in the retirement system on or before September 30, 1977, means any person in receipt of a retirement allowance, pension or other benefit provided by this chapter.

(13) "Regular interest" means such rate as the director may determine.

(14) "Accumulated contributions" means the sum of all contributions standing to the credit of a member in the member's individual account together with the regular interest thereon.

(15) (a) "Average final compensation" for persons who establish membership in the retirement system on or before September 30, 1977, means the annual average of the greatest compensation earnable by a member during any consecutive two year period of service for which service credit is allowed; or if the member has less than two years of service then the annual average compensation earnable during the total years of service for which service credit is allowed.

(b) "Average final compensation" for persons who establish membership in the retirement system on or after October 1, 1977, means the member's average compensation earnable of the highest consecutive sixty months of service prior to such member's retirement, termination, or death. Periods constituting authorized leaves of absence may not be used in the calculation of average final compensation.

(16) "Final compensation" means the annual rate of compensation earnable by a member at the time of termination of employment.

(17) "Annuity" means payments for life derived from accumulated contributions of a member. All annuities shall be paid in monthly installments.

(18) "Pension" means payments for life derived from contributions made by the employer. All pensions shall be paid in monthly installments.

(19) "Retirement allowance" means the sum of the annuity and the pension.

(20) "Employee" means any person who may become eligible for membership under this chapter, as set forth in RCW 41.40.120.

(21) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of such mortality and other tables as may be adopted by the director.

(22) "Retirement" means withdrawal from active service with a retirement allowance as provided by this chapter.

(23) "Eligible position" means:

(a) Any position which normally requires five or more uninterrupted months of service a year for which regular compensation is paid to the occupant thereof;

(b) Any position occupied by an elected official or person appointed directly by the governor for which compensation is paid.

(24) "Ineligible position" means any position which does not conform with the requirements set forth in subdivision (23).

(25) "Leave of absence" means the period of time a member is authorized by the employer to be absent from service without being separated from membership.

(26) "Totally incapacitated for duty" means total inability to perform the duties of a member's employment or office or any other work for which the member is qualified by training or experience.

(27) "Retiree" for persons who establish membership in the retirement system on or after October 1, 1977, means any member in receipt of a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer by such member.

(28) "Department" means the department of retirement systems created in chapter 41.50 RCW.

(29) "Director" means the director of the department.

(30) "State elective position" means any position held by any person elected or appointed to state-wide office or elected or appointed as a member of the legislature.

(31) "State actuary" or "actuary" means the person appointed pursuant to RCW 44.44.010((~~(2)~~)).

Sec. 511. Section 6, chapter 334, Laws of 1985 and RCW 42.48.060 are each amended to read as follow:

Nothing in this chapter is applicable to, or in any way affects, the powers and duties of the state auditor or the legislative ((~~budget~~)) fiscal services committee.

Sec. 512. Section 1, chapter 17, Laws of 1975-'76 2nd ex. sess. as last amended by section 1, chapter 217, Laws of 1981 and RCW 43.09.310 are each amended to read as follows:

The state auditor, through the division of departmental audits, shall annually audit the state-wide combined financial statements prepared by the office of financial management and make post-audits of state agencies. Post-audits of state agencies shall be made at such periodic intervals as is determined by the state auditor. Audits of combined financial statements shall include determinations as to the validity and accuracy of accounting methods, procedures and standards utilized in their preparation, as well as the accuracy of the financial statements themselves. A report shall be made of each such audit and post-audit upon completion thereof, and one copy shall be transmitted to the governor, one to the director of financial management, one to the attorney general, one to the state department audited, one to the legislative ((~~budget~~)) fiscal services committee, one each to the standing committees on ways and means of the house and senate, one to the chief clerk of the house, one to the secretary of the senate, and at least one shall be kept on file in the office of the state auditor. For purposes of reporting the annual audit of state-wide combined financial statements, "state department audited" refers solely to the office of financial management.

Sec. 513. Section 43.10.067, chapter 8, Laws of 1965 as last amended by section 108, chapter 7, Laws of 1985 and by section 2, chapter 133, Laws of 1985 and RCW 43.10.067 are each reenacted and amended to read as follows:

No officer, director, administrative agency, board, or commission of the state, other than the attorney general, shall employ, appoint or retain in employment any attorney for any administrative body, department, commission, agency, or tribunal or any other person to act as attorney in any legal or quasi legal capacity in the exercise of any of the powers or performance of any of the duties specified by law to be performed by the attorney general, except where it is provided by law to be the duty of the judge of any court or the prosecuting attorney of any county to employ or appoint such persons: PROVIDED, That RCW 43.10.040, and RCW 43.10.065 through 43.10.080 shall not apply to the administration of the judicial council, the judicial qualifications commission, the state law library, the law school of the state university, the administration of the state bar act by the Washington State Bar Association, or the representation of an estate administered by the director of the department of revenue or the director's designee pursuant to chapter 11.28 RCW.

The authority granted by chapter 1.08 RCW and chapter 44.28 RCW ((~~44.28.140~~)) shall not be affected hereby.

Sec. 514. Section 1, chapter 164, Laws of 1982 and RCW 43.19.532 are each amended to read as follows:

(1) State agencies and departments shall purchase printing, related trade services, and total copy system services for projects under two hundred dollars directly from day training centers and group training homes as defined in RCW 72.33.800 or sheltered workshops as defined in RCW 82.04.385, if the agencies or departments are located within a reasonable distance from the sheltered workshops, training centers, or group training homes. State agencies and departments may purchase microfilming and related services from day training centers, group training homes or sheltered workshops. All microfilming and related services purchased under this section shall be purchased at a price equal to or less than the fair market value. Total copy system services offered by such centers, homes, and sheltered workshops shall not replace the use by agencies and departments of in-house convenience copiers, in-house printing and binding facilities, or in-place total copy systems. All printing services and related trade services purchased under this section shall be purchased at a price equal to or less than the fair market value as determined by the standard trade pricing manuals. Copy services shall be purchased at a price equal to or less than the competitive price that is standard in the county. Such homes, centers, or sheltered workshops shall only accept work for which they can provide normal quality in a reasonable time period. All the work that such home, center, or sheltered workshop contracts to do shall be performed at the home's or center's facility or at the sheltered workshop and not by any other printing company. State agencies and departments shall purchase from other authorized sources when the service cannot be supplied by such homes, centers, or sheltered workshops. Institutions of higher education are not required to purchase printing, related trade services, or total copy system services under this section.

(2) The regional directors for vocational rehabilitation shall provide homes, centers, and sheltered workshops with the name and address of each state agency or department requiring these services within the county and copies of this section. The regional directors shall provide the public printer with the names and addresses of such homes, centers, or sheltered workshops.

(3) The public printer shall investigate and have the authority to correct any claims that an agency or department is being overcharged for either printing or related trade or copying services.

(4) This section shall expire June 30, 1986, unless extended by law for an additional fixed period of time. The legislative ((~~budget~~)) fiscal services committee shall cause a performance audit to be conducted of the program under this section. The final audit report shall be available to the legislature at least six months prior to the scheduled expiration date. The audit shall include, but is not limited to, objective findings of fact, conclusions, and recommendations as to continuation, modification, or termination of the program under this section.

Sec. 515. Section 43.79.270, chapter 8, Laws of 1965 as amended by section 2, chapter 144, Laws of 1973 and RCW 43.79.270 are each amended to read as follows:

Whenever any money, from the federal government, or from other sources, which was not anticipated in the budget approved by the legislature has actually been received and is designated to be spent for a specific purpose, the head of any department, agency, board, or commission through which such expenditure shall be made is to submit to the governor a statement which may be in the form of a request for an allotment amendment setting forth the facts constituting the need for such expenditure and the estimated amount to be expended: PROVIDED, That no expenditure shall be made in excess of the actual amount received, and no money shall be expended for any purpose except the specific purpose for which it was received. A copy of any proposal submitted to the governor to expend money from an appropriated fund or account in excess of appropriations provided by law which is based on the receipt of unanticipated revenues shall be submitted to the legislative ((~~budget~~)) fiscal services committee and also to the standing committees on ways and means of the house and senate if the legislature is in session at the same time as it is transmitted to the governor.

Sec. 516. Section 43.79.280, chapter 8, Laws of 1965 as amended by section 3, chapter 144, Laws of 1973 and RCW 43.79.280 are each amended to read as follows:

If the governor approves such estimate in whole or part, he shall endorse on each copy of the statement his approval, together with a statement of the amount approved in the form of an allotment amendment, and transmit one copy to the head of the department, agency, board, or commission authorizing the expenditure. An identical copy of the governor's statement of approval and a statement of the amount approved for expenditure shall be transmitted simultaneously to the legislative ((~~budget~~)) fiscal services committee and also to the standing committee on ways and means of the house and senate of all executive approvals of proposals to expend money in excess of appropriations provided by law.

Sec. 517. Section 1, chapter 36, Laws of 1982 1st ex. sess. as last amended by section 2, chapter 215, Laws of 1986 and RCW 43.88.020 are each amended to read as follows:

(1) "Budget" shall mean a proposed plan of expenditures for a given period or purpose and the proposed means for financing these expenditures.

(2) "Budget document" shall mean a formal, written statement offered by the governor to the legislature, as provided in RCW 43.88.030.

(3) "Director of financial management" shall mean the official appointed by the governor to serve at the governor's pleasure and to whom the governor may delegate necessary authority to carry out the governor's duties as provided in this chapter. The director of financial management shall be head of the office of financial management which shall be in the office of the governor.

(4) "Agency" shall mean and include every state office, officer, each institution, whether educational, correctional or other, and every department, division, board and commission, except as otherwise provided in this chapter.

(5) "Public funds", for purposes of this chapter, shall mean all moneys, including cash, checks, bills, notes, drafts, stocks and bonds, whether held in trust, for operating purposes, or for capital purposes, and collected or disbursed under law, whether or not such funds are otherwise subject to legislative appropriation, including funds maintained outside the state treasury.

(6) "Regulations" shall mean the policies, standards and requirements, stated in writing, designed to carry out the purposes of this chapter, as issued by the governor or his designated agent, and which shall have the force and effect of law.

(7) "Ensuing biennium" shall mean the fiscal biennium beginning on July 1st of the same year in which a regular session of the legislature is held during an odd-numbered year pursuant to Article II, section 12 of the Constitution and which biennium next succeeds the current biennium.

(8) "Dedicated fund" means a fund in the state treasury, or a separate account or fund in the general fund in the state treasury, that by law is dedicated, appropriated or set aside for a limited object or purpose; but "dedicated fund" shall not include a revolving fund or a trust fund.

(9) "Revolving fund" means a fund in the state treasury, established by law, from which is paid the cost of goods or services furnished to or by a state agency, and which is replenished through charges made for such goods or services or through transfers from other accounts or funds.

(10) "Trust fund" means a fund in the state treasury in which designated persons or classes of persons have a vested beneficial interest or equitable ownership, or which was created or established by a gift, grant, contribution, devise, or bequest that limits the use of the fund to designated objects or purposes.

(11) "Administrative expenses" means expenditures for: (a) Salaries, wages, and related costs of personnel and (b) operations and maintenance including but not limited to costs of supplies, materials, services, and equipment.

(12) "Fiscal year" means the year beginning July 1st and ending the following June 30th.

(13) "Lapse" means the termination of authority to expend an appropriation.

(14) "Legislative fiscal committees" means the legislative ((~~budget committee, the legislative evaluation and accountability program~~)) fiscal services committee, the ways and means committees of the senate and house of representatives, and, where appropriate, the legislative transportation committee.

(15) "Fiscal period" means the period for which an appropriation is made as specified within the act making the appropriation.

(16) "Primary budget driver" means the primary determinant of a budget level, other than a price variable, which causes or is associated with the major expenditure of an agency or budget unit within an agency, such as a caseload, enrollment, workload, or population statistic.

(17) "Stabilization account" means the budget stabilization account created under RCW 43.88.525 as an account in the general fund of the state treasury.

(18) "State tax revenue limit" means the limitation created by chapter 43.135 RCW.

(19) "General state revenues" means the revenues defined by Article VIII, section 1(c) of the state Constitution.

(20) "Annual growth rate in real personal income" means the estimated percentage growth in personal income for the state during the current fiscal year, expressed in constant value dollars, as published by the office of financial management or its successor agency.

(21) "Estimated revenues" means estimates of revenue in the most recent official economic and revenue forecast prepared under RCW 82.01.120.

(22) "State budgeting, accounting, and reporting system" means a system that gathers, maintains, and communicates fiscal information. The system links fiscal information beginning with development of agency budget requests through adoption of legislative appropriations to tracking actual receipts and expenditures against approved plans.

(23) "Allotment of appropriation" means the agency's statement of proposed expenditures, the director of financial management's review of that statement, and the placement of the approved statement into the state budgeting, accounting, and reporting system.

(24) "Statement of proposed expenditures" means a plan prepared by each agency that breaks each appropriation out into monthly detail representing the best estimate of how the appropriation will be expended.

Sec. 518. Section 43.88.030, chapter 8, Laws of 1965 as last amended by section 1, chapter 112, Laws of 1986 and by section 3, chapter 215, Laws of 1986 and RCW 43.88.030 are each reenacted and amended to read as follows:

(1) The director of financial management shall provide all agencies with a complete set of instructions for submitting biennial budget requests to the director at least three months before agency budget documents are due into the office of financial management. The budget document or documents shall consist of the governor's budget message which shall be explanatory of the budget and shall contain an outline of the proposed financial policies of the state for the ensuing fiscal period and shall describe in connection therewith the important features of the budget. The message shall set forth the reasons for salient changes from the previous fiscal period in expenditure and revenue items and shall explain any major changes in financial policy. Attached to the budget message shall be such supporting schedules, exhibits and other explanatory material in respect to both current operations and capital improvements as the governor shall deem to be useful to the legislature. The budget document or documents shall set forth a proposal for expenditures in the ensuing fiscal period based upon the estimated revenues as approved by the economic and revenue forecast council for such fiscal period from the source and at the rates existing by law at the time of submission of the budget document. However, the estimated revenues for use in the governor's budget document may be adjusted to reflect budgetary revenue transfers and revenue estimates dependent upon budgetary assumptions of enrollments, workloads, and caseloads. All adjustments to the approved estimated revenues must be set forth in the budget document. The governor may additionally submit, as an appendix to each agency budget or to the budget document or documents, a proposal for expenditures in the ensuing fiscal period from revenue sources derived from proposed changes in existing statutes.

The budget document or documents shall also contain:

(a) Revenues classified by fund and source for the immediately past fiscal period, those received or anticipated for the current fiscal period, and those anticipated for the ensuing biennium;

(b) Cash surplus or deficit, by fund, to the extent provided by RCW 43.88.040 and 43.88.050;

(c) Such additional information dealing with expenditures, revenues, workload, performance and personnel as the legislature may direct by law or concurrent resolution;

(d) Such additional information dealing with revenues and expenditures as the governor shall deem pertinent and useful to the legislature;

(e) Tabulations showing expenditures classified by fund, function, activity and object; and

(f) A delineation of each agency's activities, including those activities funded from nonbudgeted, nonappropriated sources, including funds maintained outside the state treasury.

(2) The budget document or documents shall include detailed estimates of all anticipated revenues applicable to proposed operating or capital expenditures and shall also include all proposed operating or capital expenditures. The total of anticipated revenues shall equal or exceed the total of proposed applicable expenditures. The budget document or documents shall further include:

(a) Interest, amortization and redemption charges on the state debt;

(b) Payments of all reliefs, judgments and claims;

(d) Expenditures incident to the operation for each agency;

(e) Revenues derived from agency operations;

(f) Expenditures and revenues shall be given in comparative form showing those incurred or received for the immediately past fiscal period and those anticipated for the current biennium and next ensuing biennium.

(3) A separate budget document or schedule may be submitted consisting of:

(a) Expenditures incident to current or pending capital projects and to proposed new capital projects, relating the respective amounts proposed to be raised therefor by appropriations in the budget and the respective amounts proposed to be raised therefor by the issuance of bonds during the fiscal period;

(b) A capital program consisting of proposed capital projects for at least the two fiscal periods succeeding the next fiscal period. The capital program shall include for each proposed project a statement of the reason or purpose for the project along with an estimate of its cost;

(d) Such other information relating to capital improvement projects as the legislature may direct by law or concurrent resolution.

(4) No change affecting the comparability of agency or program information relating to expenditures, revenues, workload, performance and personnel shall be made in the format of any budget document or report presented to the legislature under this section or RCW 43.88.160(1) relative to the format of the budget document or report which was presented to the previous regular session of the legislature during an odd-numbered year without prior legislative concurrence. Prior legislative concurrence shall consist of (a) a favorable majority vote on the proposal by the standing committees on ways and means of both houses if the legislature is in session ((or)) and the change affects a program funded by the omnibus appropriations act, (b) a favorable majority vote on the proposal by members of the legislative transportation committee if the change affects a program funded by the transportation appropriations act, or (c) a favorable majority vote on the proposal by members of the legislative ((~~evaluation and accountability program~~)) fiscal services committee if the legislature is not in session.

Sec. 519. Section 43.88.090, chapter 8, Laws of 1965 as last amended by section 3, chapter 247, Laws of 1984 and RCW 43.88.090 are each amended to read as follows:

(1) For purposes of developing budget proposals to the legislature, the governor shall have the power, and it shall be the governor's duty, to require from proper agency officials such detailed estimates and other information in such form and at such times as the governor shall direct. The estimates for the legislature and the judiciary shall be transmitted to the governor and shall be included in the budget without revision. Copies of all such estimates shall be transmitted to the ((~~standing committees on ways and means of the house and senate~~)) appropriate legislative fiscal committees at the same time as they are filed with the governor and the office of financial management.

(2) Estimates from each agency shall include goals and objectives for each program administered by the agency. The goals and objectives shall, whenever possible, be stated in terms of objective measurable results. The estimates shall include statements or tables which indicate, by agency, the state funds which are required for the receipt of federal matching revenues. The estimates shall be revised as necessary to reflect legislative enactments and adopted appropriations and shall be included with the initial biennial allotment submitted under RCW 43.88.110.

(3) Each agency shall submit to the office of financial management a report by September 15 of each odd-numbered year on its performance toward the goals and objectives established for the previous fiscal biennium and the goals and objectives established for the current fiscal biennium. Copies of the reports shall be transmitted by the office of financial management to the ((~~standing committees on ways and means of the house of representatives and senate and the~~)) appropriate legislative ((~~budget~~)) fiscal committees by December 31 of each odd-numbered year.

(4) In the year of the gubernatorial election, the governor shall invite the governor-elect or the governor-elect's designee to attend all hearings provided in RCW 43.88.100; and the governor shall furnish the governor-elect or the governor-elect's designee with such information as will enable the governor-elect or the governor-elect's designee to gain an understanding of the state's budget requirements. The governor-elect or the governor-elect's designee may ask such questions during the hearings and require such information as the governor-elect or the governor-elect's designee deems necessary and may make recommendations in connection with any item of the budget which, with the governor-elect's reasons therefor, shall be presented to the legislature in writing with the budget document. Copies of all such estimates and other required information shall also be submitted to the ((~~standing committees on ways and means of the house and senate~~)) appropriate legislative fiscal committees.

Sec. 520. Section 11, chapter 10, Laws of 1982 as amended by section 5, chapter 215, Laws of 1986 and RCW 43.88.160 are each amended to read as follows:

This section sets forth the major fiscal duties and responsibilities of officers and agencies of the executive branch. The regulations issued by the governor pursuant to this chapter shall provide for a comprehensive, orderly basis for fiscal management and control, including efficient accounting and reporting therefor, for the executive branch of the state government and may include, in addition, such requirements as will generally promote more efficient public management in the state.

(1) Governor; director of financial management. The governor, through the director of financial management, shall devise and supervise a modern and complete accounting system for each agency to the end that all revenues, expenditures, receipts, disbursements, resources and obligations of the state shall be properly and systematically accounted for. The accounting system shall include the development of accurate, timely records and reports of all financial affairs of the state. The system shall also provide for central accounts in the office of financial management at the level of detail deemed necessary by the director to perform central financial management. The director of financial management shall adopt and periodically update an accounting procedures manual. Any agency maintaining its own accounting and reporting system shall comply with the updated accounting procedures manual and the rules of the director adopted under this chapter. An agency may receive a waiver from complying with this requirement if the waiver is approved by the director. Waivers expire at the end of the fiscal biennium for which they are granted. The director shall forward notice of waivers granted to the legislative fiscal committees. The director of financial management may require such financial, statistical, and other reports as the director deems necessary from all agencies covering any period.

The director of financial management is responsible for quarterly reporting of primary budget drivers such as applicable workloads, caseload estimates, and appropriate unit cost data. These reports shall be transmitted to the legislative fiscal committees. Quarterly reports shall include actual monthly data and the variance between actual and estimated data to date. The reports shall also include estimates of these items for the remainder of the budget period.

In addition, the director of financial management, as agent of the governor, shall:

(a) Make surveys and analyses of agencies with the object of determining better methods and increased effectiveness in the use of manpower and materials; and the director shall authorize expenditures for employee training to the end that the state may benefit from training facilities made available to state employees;

(b) Report to the governor with regard to duplication of effort or lack of coordination among agencies;

(c) Review any pay and classification plans, and changes thereunder, developed by any agency for their fiscal impact: PROVIDED, That none of the provisions of this subsection shall affect merit systems of personnel management now existing or hereafter established by statute relating to the fixing of qualifications requirements for recruitment, appointment, or promotion of employees of any agency. The director shall advise and confer with agencies including appropriate standing committees of the legislature as may be designated by the speaker of the house and the president of the senate regarding the fiscal impact of such plans and may amend or alter said plans, except that for the following agencies no amendment or alteration of said plans may be made without the approval of the agency concerned: Agencies headed by elective officials;

(d) Fix the number and classes of positions or authorized man years of employment for each agency and during the fiscal period amend the determinations previously fixed by the director except that the director shall not be empowered to fix said number or said classes for the following: Agencies headed by elective officials;

(e) Provide for transfers and repayments between the budget stabilization account and the general fund as directed by appropriation and RCW 43.88.525 through 43.88.540;

(f) Promulgate regulations to effectuate provisions contained in subsections (a) through (e) hereof.

(2) The treasurer shall:

(a) Receive, keep and disburse all public funds of the state not expressly required by law to be received, kept and disbursed by some other persons: PROVIDED, That this subsection shall not apply to those public funds of the institutions of higher learning which are not subject to appropriation;

(b) Disburse public funds under the treasurer's supervision or custody by warrant or check;

(c) Keep a correct and current account of all moneys received and disbursed by the treasurer, classified by fund or account;

(d) Perform such other duties as may be required by law or by regulations issued pursuant to this law.

It shall be unlawful for the treasurer to issue any warrant or check for public funds in the treasury except upon forms duly prescribed by the director of financial management. Said forms shall provide for authentication and certification by the agency head or his designee that the services have been rendered or the materials have been furnished; or, in the case of payments for periodic maintenance services to be performed on state owned equipment, that a written contract for such periodic maintenance services is currently in effect and copies thereof are on file with the office of financial management; and the treasurer shall not be liable under the treasurer's surety bond for erroneous or improper payments so made: PROVIDED, That when services are lawfully paid for in advance of full performance by any private individual or business entity other than as provided for by RCW 42.24.035, such individual or entity other than central stores rendering such services shall make a cash deposit or furnish surety bond coverage to the state as shall be fixed in an amount by law, or if not fixed by law, then in such amounts as shall be fixed by the director of the department of general administration but in no case shall such required cash deposit or surety bond be less than an amount which will fully indemnify the state against any and all losses on account of breach of promise to fully perform such services: AND PROVIDED FURTHER, That no payments shall be made in advance for any equipment maintenance services to be performed more than three months after such payment. Any such bond so furnished shall be conditioned that the person, firm or corporation receiving the advance payment will apply it toward performance of the contract. The responsibility for recovery of erroneous or improper payments made under this section shall lie with the agency head or the agency head's designee in accordance with regulations issued pursuant to this chapter.

(3) The state auditor shall:

(a) Report to the legislature the results of current post audits that have been made of the financial transactions of each agency; to this end he may, in the auditor's discretion, examine the books and accounts of any agency, official or employee charged with the receipt, custody or safekeeping of public funds. The current post audit of each agency may include a section on recommendations to the legislature as provided in subsection (3)(c) of this section.

(b) Give information to the legislature, whenever required, upon any subject relating to the financial affairs of the state.

(c) Make the auditor's official report on or before the thirty-first of December which precedes the meeting of the legislature. The report shall be for the last complete fiscal period and shall include at least the following:

Determinations as to whether agencies, in making expenditures, complied with the laws of this state: PROVIDED, That nothing in this act shall be construed to grant the state auditor the right to perform performance audits. A performance audit for the purpose of this act shall be the examination of the effectiveness of the administration, its efficiency and its adequacy in terms of the programs of departments or agencies as previously approved by the legislature. The authority and responsibility to conduct such an examination shall be vested in the legislative ((~~budget~~)) fiscal services committee as prescribed in RCW 44.28.085 as now or hereafter amended.

(d) Be empowered to take exception to specific expenditures that have been incurred by any agency or to take exception to other practices related in any way to the agency's financial transactions and to cause such exceptions to be made a matter of public record, including disclosure to the agency concerned and to the director of financial management. It shall be the duty of the director of financial management to cause corrective action to be taken promptly, such action to include, as appropriate, the withholding of funds as provided in RCW 43.88.110.

(e) Promptly report any irregularities to the attorney general.

(4) The legislative ((~~budget~~)) fiscal services committee may:

(a) Make post audits of the financial transactions of any agency and management surveys and program reviews as provided for in RCW 44.28.085 as now or hereafter amended. To this end the committee may in its discretion examine the books, accounts, and other records of any agency, official, or employee.

(b) Give information to the legislature or any legislative committee whenever required upon any subject relating to the performance and management of state agencies.

(i) Determinations as to the extent to which agencies in making expenditures have complied with the will of the legislature and in this connection, may take exception to specific expenditures or financial practices of any agencies; and

(ii) Such plans as it deems expedient for the support of the state's credit, for lessening expenditures, for promoting frugality and economy in agency affairs and generally for an improved level of fiscal management.

Sec. 521. Section 4, chapter 41, Laws of 1967 ex. sess. as last amended by section 141, chapter 151, Laws of 1979 and RCW 43.88.205 are each amended to read as follows:

(1) Whenever an agency makes application, enters into a contract or agreement, or submits state plans for participation in, and for grants of federal funds under any federal law, the agency making such application shall at the time of such action, give notice in such form and manner as the director of financial management may prescribe, or the chairman of the appropriate legislative ((~~budget~~)) fiscal committees, ((~~standing committees on ways and means of the house and senate,~~)) the chief clerk of the house, or the secretary of the senate may request.

(2) Whenever any such application, contract, agreement, or state plan is amended, such agency shall notify each such officer of such action in the same manner as prescribed or requested pursuant to subsection (1) of this section.

(3) Such agency shall promptly furnish such progress reports in relation to each such application, contract, agreement, or state plan as may be requested following the date of the filing of the application, contract, agreement, or state plan; and shall also file with each such officer a final report as to the final disposition of each such application, contract, agreement, or state plan if such is requested.

Sec. 522. Section 43.88.230, chapter 8, Laws of 1965 as last amended by section 12, chapter 270, Laws of 1981 and RCW 43.88.230 are each amended to read as follows:

For the purposes of this chapter, the statute law committee, the legislative ((~~budget~~)) fiscal services committee, the legislative transportation committee, ((~~the legislative evaluation and accountability program committee,~~)) the office of state actuary, and all legislative standing committees of both houses shall be deemed a part of the legislative branch of state government.

Sec. 523. Section 4, chapter 320, Laws of 1977 ex. sess. and RCW 43.88.310 are each amended to read as follows:

(1) The legislative ((~~auditor, with the concurrence of the legislative budget~~)) fiscal services committee, may file with the attorney general any audit exceptions or other findings of any performance audit, management study, or special report prepared for the legislative ((~~budget~~)) fiscal services committee, any standing or special committees of the house or senate, or the entire legislature which indicate a violation of RCW 43.88.290.

(2) The attorney general shall promptly review each filing received from the legislative ((~~auditor~~)) fiscal services committee and proceed to act thereon as provided in RCW 43.88.300. If for any reason the attorney general is unable to proceed the attorney general shall report this fact and the reasons therefor to the legislative ((~~budget~~)) fiscal services committee.

Sec. 524. Section 3, chapter 23, Laws of 1977 as amended by section 144, chapter 151, Laws of 1979 and RCW 43.88.510 are each amended to read as follows:

Not later than ninety days after the beginning of each biennium, the director of financial management shall submit the compiled list of boards, commissions, councils, and committees, together with the information on each such group, that is required by RCW 43.88.505 to:

(1) The speaker of the house and the president of the senate for distribution to the appropriate standing committees; and

(2) The legislative ((~~budget~~)) fiscal services committee.

Sec. 525. Section 5, chapter 289, Laws of 1977 ex. sess. as amended by section 1, chapter 22, Laws of 1979 and RCW 43.131.050 are each amended to read as follows:

The legislative ((~~budget~~)) fiscal services committee shall cause to be conducted a program and fiscal review of each state agency scheduled for termination by the processes provided in this chapter. Such program and fiscal review shall be completed and a report prepared on or before June 30th of the year prior to the date established for termination. Upon completion of its report, the legislative ((~~budget~~)) fiscal services committee shall transmit copies of the report to the office of financial management. The office of financial management may then conduct its own program and fiscal review of the agency scheduled for termination and shall prepare a report on or before September 30th of the year prior to the date established for termination. Upon completion of its report the office of financial management shall transmit copies of its report to the legislative ((~~budget~~)) fiscal services committee. The legislative ((~~budget~~)) fiscal services committee shall prepare a final report that includes the reports of both the office of financial management and the legislative ((~~budget~~)) fiscal services committee. The legislative ((~~budget~~)) fiscal services committee and the office of financial management shall, upon request, make available to each other all working papers, studies, and other documents which relate to reports required under this section. The legislative ((~~budget~~)) fiscal services committee shall transmit the final report to all members of the legislature, to the state agency concerned, to the governor, and to the state library.

Sec. 526. Section 6, chapter 289, Laws of 1977 ex. sess. and RCW 43.131.060 are each amended to read as follows:

In conducting the review of a regulatory entity, the legislative ((~~budget~~)) fiscal services committee shall consider, but not be limited to, the following factors where applicable:

(1) The extent to which the regulatory entity has permitted qualified applicants to serve the public;

(2) The extent to which the regulatory entity restricts or inhibits competition or otherwise adversely affects the state's economic climate;

(3) The extent to which the system of regulation has contributed directly or indirectly to increasing or decreasing the costs of any goods or services involved;

(4) The duties of the regulatory entity and the costs incurred in carrying out such duties;

(5) Whether the regulatory entity has operated in the public interest, including the extent to which the regulatory entity has:

(a) Sought and achieved public participation in making its rules and decisions including consideration of recommending appointment of one or more "public" members to the entity;

(b) Processed to completion in a timely and equitable manner the formal complaints filed with it;

(c) Implemented an effective system of evaluating the impact on the public of its rules and decisions regarding economy, availability, and improvement of the services rendered to the persons it regulates;

(d) Initiated administrative procedures or recommended statutory changes to the legislature that would benefit the public as opposed to the persons it regulates; and

(e) Identified the needs and problems of the recipients of goods and services provided by those regulated;

(6) The extent to which persons regulated by the regulatory entity have been encouraged to participate in assessing problems in their profession, occupation, or industry which affect the public;

(7) The impact and effectiveness of the regulatory entity with respect to the problems or needs the entity was intended to address;

(8) The consequences of eliminating or modifying the program of the regulatory entity;

(9) The extent to which the regulatory entity duplicates the activities of other regulatory entities or of the private sector, where appropriate; and

(10) The extent to which the absence or modification of regulation would adversely affect the public health, safety, or welfare.

Sec. 527. Section 7, chapter 289, Laws of 1977 ex. sess. and RCW 43.131.070 are each amended to read as follows:

In conducting the review of a state agency other than a regulatory entity, the legislative ((~~budget~~)) fiscal services committee shall consider, but not be limited to, the following factors where applicable:

(1) The extent to which the state agency has complied with legislative intent;

(2) The extent to which the state agency is operating in an efficient and economical manner which results in optimum performance;

(3) The extent to which the state agency is operating in the public interest by effectively providing a needed service that should be continued rather than modified, consolidated, or eliminated;

(4) The extent to which the state agency duplicates the activities of other state agencies or of the private sector, where appropriate; and

(5) The extent to which the termination or modification of the state agency would adversely affect the public health, safety, or welfare.

Sec. 528. Section 8, chapter 289, Laws of 1977 ex. sess. as amended by section 3, chapter 27, Laws of 1983 1st ex. sess. and RCW 43.131.080 are each amended to read as follows:

(1) Following receipt of the final report from the legislative ((~~budget~~)) fiscal services committee, the appropriate committees of reference in the senate and the house of representatives shall each hold a public hearing, unless a joint hearing is held, to consider the final report and any related data. The committees shall also receive testimony from representatives of the state agency or agencies involved, which shall have the burden of demonstrating a public need for its continued existence; and from the governor or the governor's designee, and other interested parties, including the general public.

(2) When requested by either of the presiding members of the appropriate senate and house committees of reference, a regulatory entity under review shall mail an announcement of any hearing to the persons it regulates who have requested notice of agency rule-making proceedings as provided in RCW 34.04.025(1)(a), as now existing or hereafter amended, or who have requested notice of hearings held pursuant to the provisions of this section. On request of either presiding member, such mailing shall include an explanatory statement not exceeding one page in length prepared and supplied by the member's committee.

(3) The presiding members of the senate committee on ways and means and the house committee on appropriations may designate one or more liaison members to each committee of reference in their respective chambers for purposes of participating in any hearing and in subsequent committee of reference discussions and to seek a coordinated approach between the committee of reference and the committee they represent in a liaison capacity.

(4) Following any hearing under subsection (1) of this section by the committees of reference, such committees may hold additional meetings or hearings to come to a final determination as to whether a state agency has demonstrated a public need for its continued existence or whether modifications in existing procedures are needed. In the event that a committee of reference concludes that a state agency shall be reestablished or modified or its functions transferred elsewhere, it shall make such determination as a bill. No more than one state agency shall be reestablished or modified in any one bill.

Sec. 529. Section 11, chapter 289, Laws of 1977 ex. sess. and RCW 43.131.110 are each amended to read as follows:

Any reference in this chapter to a committee of the legislature including the legislative ((~~budget~~)) fiscal services committee shall also refer to the successor of that committee.

Sec. 530. Section 41, chapter 35, Laws of 1982 1st ex. sess. and RCW 43.136.030 are each amended to read as follows:

The legislative ((~~budget~~)) fiscal services committee shall review each tax preference for termination by the processes provided in this chapter. The review shall be completed and a report prepared on or before June 30th of the year prior to the date established for termination. Upon completion of its report, the legislative ((~~budget~~)) fiscal services committee shall transmit copies of the report to the department of revenue. The department of revenue may then conduct its own review of the tax preference scheduled for termination and shall prepare a report on or before September 30th of the year prior to the date established for termination. Upon completion of its report the department of revenue shall transmit copies of its report to the legislative ((~~budget~~)) fiscal services committee. The legislative ((~~budget~~)) fiscal services committee shall prepare a final report that includes the reports of both the department of revenue and the legislative ((~~budget~~)) fiscal services committee. The legislative ((~~budget~~)) fiscal services committee and the department of revenue shall, upon request, make available to each other all working papers, studies, and other documents which relate to reports required under this section. The legislative ((~~budget~~)) fiscal services committee shall transmit the final report to all members of the legislature, to the governor, and to the state library.

Sec. 531. Section 42, chapter 35, Laws of 1982 1st ex. sess. and RCW 43.136.040 are each amended to read as follows:

In reviewing a tax preference, the legislative ((~~budget~~)) fiscal services committee shall develop information needed by the legislature to determine if the tax preference should be terminated as scheduled, modified, or reestablished without modification. The legislative ((~~budget~~)) fiscal services committee shall consider, but not be limited to, the following factors in the review.

(1) The persons or organizations whose state tax liabilities are directly affected by the tax preference.

(2) Legislative objectives that might provide a justification for the tax preference.

(3) Evidence that the existence of the tax preference has contributed to the achievement of any of the objectives identified in subsection (2) of this section.

(4) The extent to which continuation of the tax preference beyond its scheduled termination date might contribute to any of the objectives identified in subsection (2) of this section.

(5) Fiscal impacts of the tax preference, including past impacts and expected future impacts if it is not terminated as scheduled.

(6) The extent to which termination of the tax preference would affect the distribution of liability for payment of state taxes.

Sec. 532. Section 43, chapter 35, Laws of 1982 1st ex. sess. and RCW 43.136.050 are each amended to read as follows:

(1) Following receipt of the final report from the legislative ((~~budget~~)) fiscal services committee, the ways and means committees of the house of representatives and the senate shall jointly hold a public hearing to consider the final report and any related data. The committees shall also receive testimony from the governor, or the governor's designee, and other interested parties, including the general public.

(2) Following the joint hearing, the committees may separately hold additional meetings or hearings to come to a final determination as to whether a continuation, modification, or termination of a tax preference is in the public interest. If a committee determines that a tax preference should be continued or modified, it shall make the determination as a bill. No more than one tax preference shall be reestablished or modified in any one bill.

Sec. 533. Section 2, chapter 195, Laws of 1971 ex. sess. as last amended by section 15, chapter 270, Laws of 1981 and RCW 44.40.025 are each amended to read as follows:

In addition to the powers and duties authorized in RCW 44.40.020, the committee and the standing committees on transportation of the house and senate shall, in coordination with the legislative ((~~budget committee, the legislative evaluation and accountability program~~)) fiscal services committee, and the ways and means committees of the senate and house of representatives, ascertain, study, and/or analyze all available facts and matters relating or pertaining to sources of revenue, appropriations, expenditures, and financial condition of the motor vehicle fund and accounts thereof, the highway safety fund, and all other funds or accounts related to transportation programs of the state.

The legislative ((~~budget committee, the legislative evaluation and accountability program~~)) fiscal services committee, and the ways and means committees of the senate and house of representatives shall coordinate their activities with the legislative transportation committee in carrying out the committees' powers and duties under chapter 43.88 RCW in matters relating to the transportation programs of the state.

Sec. 534. Section 31, chapter 7, Laws of 1982 2nd ex. sess. and RCW 67.70.310 are each amended to read as follows:

The director of financial management may conduct a management review of the commission's lottery operations to assure that:

(1) The manner and time of payment of prizes to the holder of winning tickets or shares is consistent with this chapter and the rules adopted under this chapter;

(2) The apportionment of total revenues accruing from the sale of lottery tickets or shares and from all other sources is consistent with this chapter;

(3) The manner and type of lottery being conducted, and the expenses incidental thereto, are the most efficient and cost-effective; and

(4) The commission is not unnecessarily incurring operating and administrative costs.

In conducting a management review, the director of financial management may inspect the books, documents, and records of the commission. Upon completion of a management review, all irregularities shall be reported to the attorney general, the legislative ((~~budget~~)) fiscal services committee, and the state auditor. The director of financial management shall make such recommendations as may be necessary for the most efficient and cost-effective operation of the lottery.

Sec. 535. Section 34, chapter 7, Laws of 1982 2nd ex. sess. and RCW 67.70.900 are each amended to read as follows:

This chapter shall expire July 1, 1987, unless extended by law. The legislative ((~~budget~~)) fiscal services committee shall evaluate the effectiveness of this chapter. The final report of the evaluation shall be available to the legislature at least six months prior to the scheduled termination date. The report shall include, but is not limited to, objective findings of fact, conclusions, and recommendations as to continuation, modification, or termination of this chapter.

Sec. 536. Section 22, chapter 136, Laws of 1981 and RCW 72.09.180 are each amended to read as follows:

The corrections standards board shall cease to exist six years after July 1, 1981, unless extended by law. The legislative ((~~budget~~)) fiscal services committee shall review the board and recommend to the legislature by January of 1987 whether or not the board should be extended.

Sec. 537. Section 3, chapter 138, Laws of 1984 and RCW 82.01.125 are each amended to read as follows:

The ((~~administrator of the legislative evaluation and accountability program~~)) legislative fiscal services committee may request, and the supervisor shall provide, alternative economic and revenue forecasts based on assumptions specified by the ((~~administrator~~)) legislative fiscal services committee.

Sec. 538. Section 5, chapter 138, Laws of 1984 as amended by section 23, chapter 158, Laws of 1986 and RCW 82.01.135 are each amended to read as follows:

(1) To promote the free flow of information and to promote legislative input in the preparation of forecasts, immediate access to all information relating to economic and revenue forecasts shall be available to the economic and revenue forecast work group, hereby created. Revenue collection information shall be available to the economic and revenue forecast work group the first business day following the conclusion of each collection period. The economic and revenue forecast work group shall consist of one staff member selected by the executive head or chairperson of each of the following agencies or committees:

(a) Department of revenue;

(b) Office of financial management;

(d) Ways and means committee of the senate; and

(e) Ways and means committee of the house of representatives.

(2) The economic and revenue forecast work group shall provide technical support to the economic and revenue forecast council. Meetings of the economic and revenue forecast work group may be called by any member of the group for the purpose of assisting the economic and revenue forecast council, reviewing the state economic and revenue forecasts, or reviewing monthly revenue collection data or for any other purpose which may assist the economic and revenue forecast council. PART VI

MISCELLANEOUS

NEW SECTION. Sec. 601. All reports, documents, surveys, books, records, files, papers, or written material in the possession of the legislative evaluation and accountability program, the legislative budget committee, and the office of the state actuary shall be delivered to the custody of the senate and house of representatives. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the legislative evaluation and accountability program, the legislative budget committee, and the office of the state actuary shall be made available to the senate and house of representatives. All funds, credits, or other assets held by the legislative evaluation and accountability program, the legislative budget committee, and the office of the state actuary shall be assigned to the senate and house of representatives.

All employees of the legislative budget committee, the legislative evaluation and accountability program committee, and the office of the state actuary are transferred to the jurisdiction of the senate and house of representatives.

Any appropriations made to the legislative evaluation and accountability program, the legislative budget committee, and the office of the state actuary shall, on the effective date of this section, be transferred and credited to the senate and house of representatives.

Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management, after consultation with the chairs of the ways and means committees of the senate and house of representatives, shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

NEW SECTION. Sec. 602. All rules and all pending business before the legislative evaluation and accountability program, the legislative budget committee, and the office of the state actuary shall be continued and acted upon by the senate and house of representatives through the legislative fiscal services committee. All existing contracts and obligations shall remain in full force and shall be performed by the legislative fiscal services committee.

NEW SECTION. Sec. 603. The transfer of the powers, duties, functions, and personnel of the legislative evaluation and accountability program, the legislative budget committee, and the office of the state actuary shall not affect the validity of any act performed prior to the effective date of this section.

NEW SECTION. Sec. 604. If apportionments of budgeted funds are required because of the transfers directed by section 601 of this act, the director of financial management, after consultation with the chairs of the ways and means committees of the senate and house of representatives, shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

NEW SECTION. Sec. 605. (1) Sections 101 through 104 of this act are each added to chapter 44.28 RCW.

(2) RCW 44.48.070, 44.48.080, and 44.48.090 , as amended by this act, are each recodified as sections in chapter 44.28 RCW.

NEW SECTION. Sec. 606. The following acts or parts of acts are each repealed:

(1) Section 20, chapter 105, Laws of 1975-'76 2nd ex. sess. and RCW 44.44.020; and

(2) Section 21, chapter 105, Laws of 1975-'76 2nd ex. sess. and RCW 44.44.030.

NEW SECTION. Sec. 607. The following acts or parts of acts are each repealed:

(1) Section 1, chapter 43, Laws of 1951, section 4, chapter 206, Laws of 1955, section 1, chapter 20, Laws of 1963 ex. sess., section 1, chapter 114, Laws of 1967 ex. sess., section 4, chapter 10, Laws of 1969, section 30, chapter 87, Laws of 1980, section 1, chapter 52, Laws of 1983 and RCW 44.28.010;

(2) Section 12, chapter 43, Laws of 1951, section 5, chapter 206, Laws of 1955, section 5, chapter 10, Laws of 1969, section 31, chapter 87, Laws of 1980 and RCW 44.28.020;

(3) Section 13, chapter 43, Laws of 1951, section 6, chapter 206, Laws of 1955 and RCW 44.28.030;

(4) Section 14, chapter 43, Laws of 1951, section 134, chapter 34, Laws of 1975-'76 2nd ex. sess. and RCW 44.28.040;

(5) Section 15, chapter 43, Laws of 1951, section 7, chapter 206, Laws of 1955 and RCW 44.28.050;

(6) Section 2, chapter 43, Laws of 1951, section 13, chapter 293, Laws of 1975 1st ex. sess. and RCW 44.28.060;

(7) Section 6, chapter 43, Laws of 1951, section 16, chapter 293, Laws of 1975 1st ex. sess. and RCW 44.28.100;

(8) Section 10, chapter 43, Laws of 1951 and RCW 44.28.130;

(9) Section 11, chapter 43, Laws of 1951, section 9, chapter 206, Laws of 1955, section 17, chapter 293, Laws of 1975 1st ex. sess. and RCW 44.28.140;

(10) Section 7, chapter 43, Laws of 1951, section 18, chapter 293, Laws of 1975 1st ex. sess. and RCW 44.28.150; and

(11) Section 16, chapter 43, Laws of 1951 and RCW 44.28.900.

NEW SECTION. Sec. 608. The following acts or parts of acts are each repealed:

(1) Section 1, chapter 373, Laws of 1977 ex. sess., section 40, chapter 87, Laws of 1980 and RCW 44.48.010;

(2) Section 2, chapter 373, Laws of 1977 ex. sess., section 41, chapter 87, Laws of 1980 and RCW 44.48.020;

(3) Section 3, chapter 373, Laws of 1977 ex. sess., section 42, chapter 87, Laws of 1980 and RCW 44.48.030;

(4) Section 4, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.040;

(5) Section 5, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.050;

(6) Section 6, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.060;

(7) Section 10, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.100;

(8) Section 11, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.110;

(9) Section 12, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.120;

(10) Section 13, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.130;

(11) Section 14, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.140; and

(12) Section 16, chapter 373, Laws of 1977 ex. sess. and RCW 44.48.900.

NEW SECTION. Sec. 609. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 610. Captions and headings as used in this act do not constitute any part of the law.

NEW SECTION. Sec. 611. This act shall take effect on July 1, 1988, except that section 101 of this act shall take effect on January 1, 1988, for the purpose of appointment of legislative fiscal services committee members. Notwithstanding section 101(3) of this act, the initial members of the committee shall serve one-year terms beginning with their appointment during the 1988 regular legislative session.