AN ACT Relating to state personnel administration; amending RCW 41.06.030, 41.06.070, 41.06.130, 41.06.140, 41.06.160, 41.06.170, 41.06.186, 41.06.196, 41.06.220, 41.06.270, 41.06.280, 41.06.340, 41.06.350, 41.06.400, 41.06.410, 41.06.420, 41.06.430, 41.06.450, 41.06.475, 41.64.090, 34.12.020, 41.04.340, 41.48.140, 41.50.804, 41.56.100, 41.60.041, 41.64.010, 41.64.090, 42.16.010, 42.17.2401, 43.03.028, 43.03.305, 43.06.425, 43.06.430, 43.33A.100, 43.43.832, 43.60A.906, 43.131.090, 48.03.060, 49.46.010, 70.87.120, 72.01.210, 72.19.050, and 74.09.150; reenacting and amending RCW 41.06.020, 41.06.150, and 41.64.030; decodifying RCW 41.64.900 and 72.09.220; repealing RCW 41.06.110, 41.06.120, 41.06.230, 41.06.240, 41.06.300, 41.06.310, 41.06.320, 41.06.330, and 50.12.031; creating new sections; making an appropriation; and providing an effective date.

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

Sec. 1. Section 1, chapter 12, Laws of 1970 ex. sess. as last amended by section 3, chapter 365, Laws of 1985 and by section 1, chapter 461, Laws of 1985 and RCW 41.06.020 are each reenacted and amended to read as follows:

Unless the context clearly indicates otherwise, the words used in this chapter have the meaning given in this section.

(1) "Agency" means an office, department, board, commission, or other separate unit or division, however designated, of the state government and all personnel thereof; it includes any unit of state government established by law, the executive officer or members of which are either elected or appointed, upon which the statutes confer powers and impose duties in connection with operations of either a governmental or proprietary nature.

(2) ((~~"Board" means the state personnel board established under the provisions of RCW 41.06.110, except that this definition does not apply to the words "board" or "boards" when used in RCW 41.06.070.~~

~~(3)~~)) "Classified service" means all positions in the state service subject to the provisions of this chapter.

((~~(4)~~)) (3) "Competitive service" means all positions in the classified service for which a competitive examination is required as a condition precedent to appointment.

((~~(5)~~)) (4) "Comparable worth" means the provision of similar salaries for positions that require or impose similar responsibilities, judgments, knowledge, skills, and working conditions.

((~~(6)~~)) (5) "Noncompetitive service" means all positions in the classified service for which a competitive examination is not required.

((~~(7)~~)) (6) "Department" means an agency of government that has as its governing officer a person, or combination of persons such as a commission, board, or council, by law empowered to operate the agency responsible either to (a) no other public officer or (b) the governor.

((~~(8)~~)) (7) "Career development" means the progressive development of employee capabilities to facilitate productivity, job satisfaction, and upward mobility through work assignments as well as education and training that are both state-sponsored and are achieved by individual employee efforts, all of which shall be consistent with the needs and obligations of the state and its agencies.

((~~(9)~~)) (8) "Training" means activities designed to develop job-related knowledge and skills of employees.

((~~(10)~~)) (9) "Director" means the director of personnel appointed under the provisions of RCW 41.06.130.

((~~(11)~~)) (10) "Affirmative action" means a procedure by which racial minorities, women, persons in the protected age category, persons with disabilities, Vietnam-era veterans, and disabled veterans are provided with increased employment opportunities. It shall not mean any sort of quota system.

Sec. 2. Section 3, chapter 1, Laws of 1961 and RCW 41.06.030 are each amended to read as follows:

A department of personnel((~~, governed by a state personnel board and administered by a director of personnel,~~)) is hereby established as a separate agency within the state government.

Sec. 3. Section 1, chapter 11, Laws of 1972 ex. sess. as last amended by section 2, chapter 389, Laws of 1987 and RCW 41.06.070 are each amended to read as follows:

The provisions of this chapter do not apply to:

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

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

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

(4) The officers of the Washington state patrol;

(5) Elective officers of the state;

(6) The chief executive officer of each agency;

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

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

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

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

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

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

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

(10) Assistant attorneys general;

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

(12) Inmate, student, part-time, or temporary employees, and part-time professional consultants, as defined by the state department of 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 department of 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) Up to a total of five senior staff positions of the western library network under chapter 27.26 RCW responsible for formulating policy or for directing program management of a major administrative unit;

(27) Not more than six assistant directors in the department of personnel;

(28) In addition to the exemptions specifically provided by this chapter, the ((~~state personnel board~~)) director 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~~)) director stating the reasons for requesting such exemptions. The ((~~personnel board~~)) director shall hold a public hearing, after proper notice, on requests submitted pursuant to this subsection. If the ((~~board~~)) director 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~~)) director 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~~)) director.

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~~)) director 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. 4. Section 13, chapter 1, Laws of 1961 as amended by section 3, chapter 53, Laws of 1982 1st ex. sess. and RCW 41.06.130 are each amended to read as follows:

The office of director of personnel is hereby established.

(1) ((Within ninety days after December 8, 1960, a director of personnel shall be appointed. The merit system director then serving under RCW 50.12.030, whose position is terminated by this chapter, may serve as director of personnel hereunder until a permanent director of personnel is appointed as herein provided, and may be appointed as director of personnel by the governor alone; or the governor may fill the position in the manner hereinafter provided for subsequent vacancies therein on the basis of competitive examination, in conformance with board rules for competitive examinations, for which examinations the merit system director is eligible.

~~(2)~~)) The director of personnel shall be appointed by the governor ((from a list of three names submitted to him by the board with its recommendations. The names on such list shall be those of the three standing highest upon competitive examination conducted by a committee of three persons appointed by the board solely for that purpose whenever the position is vacant)) and shall be subject to senate confirmation. Only persons with substantial experience in the field of personnel management are eligible ((~~to take such examination~~)) for appointment to the position of director of personnel. The director's salary shall be established by the governor in accordance with RCW 43.03.040.

((~~(3)~~)) (2) The director of personnel ((~~is removable for cause by~~)) shall serve at the pleasure of the governor ((~~with the approval of a majority of the board or by a majority of the board~~)).

((~~(4)~~)) (3) The director of personnel shall direct and supervise all the department of personnel's ((~~administrative and technical~~)) activities in accordance with the provisions of this chapter and the rules and regulations approved and promulgated thereunder. ((~~He shall prepare for consideration by the board proposed rules and regulations required by this chapter. His salary shall be fixed by the board.~~

~~(5)~~)) (4) The department of personnel shall be organized into administrative divisions that the director deems necessary to promote efficient public management, to improve programs, and to take full advantage of both fiscal and administrative economies. The director may appoint not more than six assistant directors as necessary to administer the several divisions within the department. The assistant directors shall be exempt from this chapter and shall be paid salaries in an amount fixed by the governor in accordance with the procedure established by law for the fixing of salaries for officers exempt from the operation of the state civil service law.

(5) The director of personnel may delegate to any agency the authority to perform administrative and technical personnel activities if the agency requests such authority and the director of personnel is satisfied that the agency has the personnel management capabilities to effectively perform the delegated activities. The director of personnel shall prescribe standards and guidelines for the performance of delegated activities. If the director of personnel determines that an agency is not performing delegated activities within the prescribed standards and guidelines, the director shall withdraw the authority from the agency to perform such activities.

Sec. 5. Section 14, chapter 1, Laws of 1961 and RCW 41.06.140 are each amended to read as follows:

It shall be the duty of the ((~~board~~)) director to make rules and regulations providing for employee participation in the development and administration of personnel policies. To assure this right, personnel policies, rules, classification and pay plans, and amendments thereto, shall be acted on only after the ((~~board~~)) director has given twenty days notice to, and considered proposals from, employee representatives and agencies affected. Complete and current compilations of all rules and regulations of the ((~~board~~)) department in printed, mimeographed or multigraphed form shall be available to the public in the office of the director of personnel free of charge.

Sec. 6. Section 4, chapter 53, Laws of 1982 1st ex. sess. as last amended by section 5, chapter 365, Laws of 1985 and by section 2, chapter 461, Laws of 1985 and RCW 41.06.150 are each reenacted and amended to read as follows:

The ((~~board~~)) director shall adopt rules, consistent with the purposes and provisions of this chapter, as now or hereafter amended, and with the best standards of personnel administration, regarding the basis and procedures to be followed for:

(1) The reduction, dismissal, suspension, or demotion of an employee;

(2) Certification of names for vacancies, including departmental promotions, with the number of names equal to four more names than there are vacancies to be filled, such names representing applicants rated highest on eligibility lists;

(3) Examinations for all positions in the competitive and noncompetitive service;

(4) Appointments;

(5) Training and career development;

(6) Probationary periods of six to twelve months and rejections therein, depending on the job requirements of the class, except that entry level state park rangers shall serve a probationary period of twelve months;

(7) Transfers;

(8) Sick leaves and vacations;

(9) Hours of work;

(10) Layoffs when necessary and subsequent reemployment, both according to seniority;

(11) Determination of appropriate bargaining units within any agency: PROVIDED, That in making such determination the ((~~board~~)) director shall consider the duties, skills, and working conditions of the employees, the history of collective bargaining by the employees and their bargaining representatives, the extent of organization among the employees, and the desires of the employees;

(12) Certification and decertification of exclusive bargaining representatives: PROVIDED, That after certification of an exclusive bargaining representative and upon the representative's request, the director shall hold an election among employees in a bargaining unit to determine by a majority whether to require as a condition of employment membership in the certified exclusive bargaining representative on or after the thirtieth day following the beginning of employment or the date of such election, whichever is the later, and the failure of an employee to comply with such a condition of employment constitutes cause for dismissal: PROVIDED FURTHER, That no more often than once in each twelve-month period after expiration of twelve months following the date of the original election in a bargaining unit and upon petition of thirty percent of the members of a bargaining unit the director shall hold an election to determine whether a majority wish to rescind such condition of employment: PROVIDED FURTHER, That for purposes of this clause, membership in the certified exclusive bargaining representative is satisfied by the payment of monthly or other periodic dues and does not require payment of initiation, reinstatement, or any other fees or fines and includes full and complete membership rights: AND PROVIDED FURTHER, That in order to safeguard the right of nonassociation of public employees, based on bona fide religious tenets or teachings of a church or religious body of which such public employee is a member, such public employee shall pay to the union, for purposes within the program of the union as designated by such employee that would be in harmony with his individual conscience, an amount of money equivalent to regular union dues minus any included monthly premiums for union-sponsored insurance programs, and such employee shall not be a member of the union but is entitled to all the representation rights of a union member;

(13) Agreements between agencies and certified exclusive bargaining representatives providing for grievance procedures and collective negotiations on all personnel matters over which the appointing authority of the appropriate bargaining unit of such agency may lawfully exercise discretion;

(14) Written agreements may contain provisions for payroll deductions of employee organization dues upon authorization by the employee member and for the cancellation of such payroll deduction by the filing of a proper prior notice by the employee with the appointing authority and the employee organization: PROVIDED, That nothing contained herein permits or grants to any employee the right to strike or refuse to perform his or her official duties;

(15) Adoption and revision of a comprehensive classification plan for all positions in the classified service, based on investigation and analysis of the duties and responsibilities of each such position;

(16) Allocation and reallocation of positions within the classification plan;

(17) Adoption and revision of a state salary schedule to reflect the prevailing rates in Washington state private industries and other governmental units but the rates in the salary schedules or plans shall be increased if necessary to attain comparable worth under an implementation plan under RCW 41.06.155, such adoption and revision subject to approval by the director of financial management in accordance with the provisions of chapter 43.88 RCW;

(18) Increment increases within the series of steps for each pay grade based on length of service for all employees whose standards of performance are such as to permit them to retain job status in the classified service;

(19) Providing for veteran's preference as required by existing statutes, with recognition of preference in regard to layoffs and subsequent reemployment for veterans and their widows by giving such eligible veterans and their widows additional credit in computing their seniority by adding to their unbroken state service, as defined by the ((~~board~~)) director, the veteran's service in the military not to exceed five years. For the purposes of this section, "veteran" means any person who has one or more years of active military service in any branch of the armed forces of the United States or who has less than one year's service and is discharged with a disability incurred in the line of duty or is discharged at the convenience of the government and who, upon termination of such service has received an honorable discharge, a discharge for physical reasons with an honorable record, or a release from active military service with evidence of service other than that for which an undesirable, bad conduct, or dishonorable discharge shall be given: PROVIDED, HOWEVER, That the widow of a veteran is entitled to the benefits of this section regardless of the veteran's length of active military service: PROVIDED FURTHER, That for the purposes of this section "veteran" does not include any person who has voluntarily retired with twenty or more years of active military service and whose military retirement pay is in excess of five hundred dollars per month;

(20) Permitting agency heads to delegate the authority to appoint, reduce, dismiss, suspend, or demote employees within their agencies if such agency heads do not have specific statutory authority to so delegate: PROVIDED, That the ((~~board~~)) director may not authorize such delegation to any position lower than the head of a major subdivision of the agency;

(21) Assuring persons who are or have been employed in classified positions under chapter 28B.16 RCW will be eligible for employment, reemployment, transfer, and promotion in respect to classified positions covered by this chapter.

(22) Affirmative action in appointment, promotion, transfer, recruitment, training, and career development; development and implementation of affirmative action goals and timetables; and monitoring of progress against those goals and timetables.

The ((~~board~~)) director shall consult with the human rights commission in the development of rules pertaining to affirmative action. The department of personnel shall transmit a report annually to the human rights commission which states the progress each state agency has made in meeting affirmative action goals and timetables.

Sec. 7. Section 16, chapter 1, Laws of 1961 as last amended by section 2, chapter 94, Laws of 1985 and RCW 41.06.160 are each amended to read as follows:

In preparing classification and salary schedules as set forth in RCW 41.06.150 as now or hereafter amended the department of personnel shall give full consideration to prevailing rates in other public employment and in private employment in this state. For this purpose the department shall undertake comprehensive salary and fringe benefit surveys to be planned and conducted on a joint basis with the higher education personnel board, with such surveys to be conducted in the year prior to the convening of every other one hundred five day regular session of the state legislature. In the year prior to the convening of each one hundred five day regular session during which a comprehensive salary and fringe benefit survey is not conducted, the department shall plan and conduct on a joint basis with the higher education personnel board a trend salary and fringe benefit survey. This survey shall measure average salary and fringe benefit movement for broad occupational groups which has occurred since the last comprehensive salary and fringe benefit survey was conducted. The results of each comprehensive and trend salary and fringe benefit survey shall be completed and forwarded by September 30 with a recommended state salary schedule to the governor and director of financial management for their use in preparing budgets to be submitted to the succeeding legislature. A copy of the data and supporting documentation shall be furnished by the department of personnel to the standing committees for appropriations of the senate and house of representatives.

In the case of comprehensive salary and fringe benefit surveys, the department shall furnish the following supplementary data in support of its recommended salary schedule:

(1) A total dollar figure which reflects the recommended increase or decrease in state salaries as a direct result of the specific salary and fringe benefit survey that has been conducted and which is categorized to indicate what portion of the increase or decrease is represented by salary survey data and what portion is represented by fringe benefit survey data;

(2) An additional total dollar figure which reflects the impact of recommended increases or decreases to state salaries based on other factors rather than directly on prevailing rate data obtained through the survey process and which is categorized to indicate the sources of the requests for deviation from prevailing rates and the reasons for the changes;

(3) A list of class codes and titles indicating recommended monthly salary ranges for all state classes under the control of the department of personnel with:

(a) Those salary ranges which do not substantially conform to the prevailing rates developed from the salary and fringe benefit survey distinctly marked and an explanation of the reason for the deviation included; and

(b) Those department of personnel classes which are substantially the same as classes being used by the higher education personnel board clearly marked to show the commonality of the classes between the two jurisdictions;

(4) A supplemental salary schedule which indicates the additional salary to be paid state employees for hazardous duties or other considerations requiring extra compensation under specific circumstances. Additional compensation for these circumstances shall not be included in the basic salary schedule but shall be maintained as a separate pay schedule for purposes of full disclosure and visibility; and

(5) A supplemental salary schedule which indicates those cases where the ((~~board~~)) director determines that prevailing rates do not provide similar salaries for positions that require or impose similar responsibilities, judgment, knowledge, skills, and working conditions. This supplementary salary schedule shall contain proposed salary adjustments necessary to eliminate any such dissimilarities in compensation. Additional compensation needed to eliminate such salary dissimilarities shall not be included in the basic salary schedule but shall be maintained as a separate salary schedule for purposes of full disclosure and visibility.

It is the intention of the legislature that requests for funds to support recommendations for salary deviations from the prevailing rate survey data shall be kept to a minimum, and that the requests be fully documented when forwarded by the department of personnel. Further, it is the intention of the legislature that the department of personnel and the higher education personnel board jointly determine job classes which are substantially common to both jurisdictions and that basic salaries for these job classes shall be equal based on salary and fringe benefit survey findings.

Salary and fringe benefit survey information collected from private employers which identifies a specific employer with the salary and fringe benefit rates which that employer pays to its employees shall not be subject to public disclosure under chapter 42.17 RCW.

The first comprehensive salary and fringe benefit survey required by this section shall be completed and forwarded to the governor and the director of financial management by September 30, 1986. The first trend salary and fringe benefit survey required by this section shall be completed and forwarded to the governor and the director of financial management by September 30, 1988.

Sec. 8. Section 17, chapter 1, Laws of 1961 as last amended by section 19, chapter 311, Laws of 1981 and RCW 41.06.170 are each amended to read as follows:

(1) The ((~~board~~)) director, in the promulgation of rules and regulations governing suspensions for cause, shall not authorize an appointing authority to suspend an employee for more than fifteen calendar days as a single penalty or more than thirty calendar days in any one calendar year as an accumulation of several penalties. The ((~~board~~)) director shall require that the appointing authority give written notice to the employee not later than one day after the suspension takes effect, stating the reasons for and the duration thereof. The authority shall file a copy of the notice with the director of personnel.

(2) Any employee who is reduced, dismissed, suspended, or demoted, after completing his or her probationary period of service as provided by the rules and regulations of the ((~~board~~)) director, or any employee who is adversely affected by a violation of the state civil service law, chapter 41.06 RCW, as now or hereafter amended, or rules promulgated pursuant thereto, shall have the right to appeal to the personnel appeals board created by RCW 41.64.010 not later than thirty days after the effective date of such action. The employee shall be furnished with specified charges in writing when a reduction, dismissal, suspension, or demotion action is taken. Such appeal shall be in writing.

(3) An employee incumbent in a position at the time of its allocation or reallocation, or the agency utilizing the position, may appeal the allocation or reallocation to the personnel appeals board created by RCW 41.64.010. Notice of such appeal must be filed in writing within thirty days of the action from which appeal is taken.

(4) An applicant or employee who is adversely affected by a decision of the director relating to an application for employment, an examination, or eligibility for employment may request a hearing of the personnel appeals board created by RCW 41.64.010.

(5) An employee or exclusive bargaining representative may request arbitration by the personnel appeals board of unresolved grievances filed pursuant to a collective bargaining agreement.

(6) An exclusive bargaining representative or an agency may request arbitration by the personnel appeals board to resolve an impasse in collective bargaining negotiations.

Sec. 9. Section 5, chapter 461, Laws of 1985 and RCW 41.06.186 are each amended to read as follows:

The ((~~personnel board~~)) director shall adopt rules designed to terminate the state employment of any employee whose performance is so inadequate as to warrant termination.

Sec. 10. Section 6, chapter 461, Laws of 1985 and RCW 41.06.196 are each amended to read as follows:

The ((~~personnel board~~)) director shall adopt rules designed to remove from supervisory positions those supervisors who in violation of the rules adopted under RCW 41.06.186 have tolerated the continued employment of employees under their supervision whose performance has warranted termination from state employment.

Sec. 11. Section 22, chapter 1, Laws of 1961 and RCW 41.06.220 are each amended to read as follows:

(1) An employee who is terminated from state service may request the ((~~board~~)) director to place his or her name on an appropriate reemployment list and the ((~~board~~)) director shall grant this request where the circumstances are found to warrant reemployment.

(2) Any employee, when fully reinstated after appeal, shall be guaranteed all employee rights and benefits, including back pay, sick leave, vacation accrual, retirement and OASDI credits.

Sec. 12. Section 27, chapter 1, Laws of 1961 as amended by section 61, chapter 151, Laws of 1979 and RCW 41.06.270 are each amended to read as follows:

A disbursing officer shall not pay any employee holding a position covered by this chapter unless the employment is in accordance with this chapter or the rules, regulations and orders issued hereunder. The ((~~board~~)) director and the director of financial management shall jointly establish procedures for the certification of payrolls.

Sec. 13. Section 28, chapter 1, Laws of 1961 as last amended by section 4, chapter 248, Laws of 1987 and RCW 41.06.280 are each amended to read as follows:

There is hereby created a fund within the state treasury, designated as the "Department of Personnel Service Fund," to be used by the ((~~board~~)) director as a revolving fund for the payment of salaries, wages, and operations required for the administration of the provisions of this chapter, applicable provisions of chapter 41.04 RCW, and chapter 41.60 RCW. An amount not to exceed one percent of the approved allotments of salaries and wages for all positions in the classified service in each of the agencies subject to this chapter, except the institutions of higher learning, shall be charged to the operations appropriations of each agency and credited to the department of personnel service fund as the allotments are approved pursuant to chapter 43.88 RCW. Subject to the above limitations, the amount shall be charged against the allotments pro rata, at a rate to be fixed by the director from time to time which, together with income derived from services rendered under RCW 41.06.080, will provide the department with funds to meet its anticipated expenditures during the allotment period.

The director of personnel shall fix the terms and charges for services rendered by the department of personnel pursuant to RCW 41.06.080, which amounts shall be credited to the department of personnel service fund and charged against the proper fund or appropriation of the recipient of such services on a quarterly basis. Payment for services so rendered under RCW 41.06.080 shall be made on a quarterly basis to the state treasurer and deposited by him in the department of personnel service fund.

Moneys from the department of personnel service fund shall be disbursed by the state treasurer by warrants on vouchers duly authorized by the ((~~board~~)) director.

Sec. 14. Section 13, chapter 215, Laws of 1969 ex. sess. and RCW 41.06.340 are each amended to read as follows:

Each and every provision of RCW 41.56.140 through 41.56.190 shall be applicable to this chapter as it relates to state civil service employees and the ((~~state personnel board, or its~~)) director or the director's designee, whose final decision shall be appealable to the ((~~state~~)) personnel appeals board created by RCW 41.64.010, which is granted all powers and authority granted to the ((~~department of labor and industries~~)) public employment relations commission by RCW 41.56.140 through 41.56.190.

Sec. 15. Section 1, chapter 152, Laws of 1969 ex. sess. and RCW 41.06.350 are each amended to read as follows:

The ((~~state personnel board~~)) director is authorized to receive federal funds now available or hereafter made available for the assistance and improvement of public personnel administration, which may be expended in addition to the department of personnel service fund established by RCW 41.06.280.

Sec. 16. Section 4, chapter 118, Laws of 1980 and RCW 41.06.400 are each amended to read as follows:

(1) In addition to other powers and duties specified in this chapter, the ((~~board~~)) director shall, by rule, prescribe the purpose and minimum standards for training and career development programs and, in so doing, regularly consult with and consider the needs of individual agencies and employees.

(2) In addition to other powers and duties specified in this chapter, the director shall:

(a) Provide for the evaluation of training and career development programs and plans of agencies based on minimum standards established by the ((~~board~~)) director. The director shall report the results of such evaluations to the agency which is the subject of the evaluation;

(b) Provide training and career development programs which may be conducted more efficiently and economically on an interagency basis;

(d) Monitor ((~~and~~)), review, and document the impact of training and career development programs to ensure that the responsibilities of the state to provide equal employment opportunities are diligently carried out. ((~~The director shall report to the board the impact of training and career development programs on the fulfillment of such responsibilities.~~))

(3) At an agency's request, the director may provide training and career development programs for an agency's internal use which may be conducted more efficiently and economically by the department of personnel.

Sec. 17. Section 5, chapter 118, Laws of 1980 and RCW 41.06.410 are each amended to read as follows:

Each agency subject to the provisions of this chapter shall:

(1) Prepare an employee training and career development plan which shall at least meet minimum standards established by the ((~~board~~)) director. A copy of such plan shall be submitted to the director for purposes of administering the provisions of RCW 41.06.400(2);

(2) Provide for training and career development for its employees in accordance with the agency plan;

(3) Report on its training and career development program operations and costs to the director in accordance with reporting procedures adopted by the ((~~board~~)) director;

(4) Budget for training and career development in accordance with procedures of the office of financial management.

Sec. 18. Section 6, chapter 118, Laws of 1980 and RCW 41.06.420 are each amended to read as follows:

(1) The ((~~board~~)) director, by rule, shall prescribe the conditions under which an employee appointed to a supervisory or management position after June 12, 1980, shall be required to successfully complete an entry-level management training course as approved by the director. Such training shall not be required of any employee who has completed a management training course prior to the employee's appointment which is, in the judgment of the director, at least equivalent to the entry-level course required by this section.

(2) The ((~~board~~)) director, by rule, shall establish procedures for the suspension of the entry-level training requirement in cases where the ability of an agency to perform its responsibilities is adversely affected, or for the waiver of this requirement in cases where a person has demonstrated experience as a substitute for training.

(3) Agencies subject to the provisions of this chapter, in accordance with rules prescribed by the ((~~board~~)) director, shall designate individual positions, or groups of positions, as being "supervisory" or "management" positions. Such designations shall be subject to review by the director as part of the director's evaluation of training and career development programs prescribed by RCW 41.06.400(2).

Sec. 19. Section 7, chapter 118, Laws of 1980 and RCW 41.06.430 are each amended to read as follows:

(1) The ((~~board~~)) director, by rule, shall develop a career executive program which recognizes the profession of management and recognizes excellence in managerial skills in order to (a) identify, attract, and retain highly qualified executive candidates, (b) provide outstanding employees a broad opportunity for career development, and (c) provide for the mobility of such employees among agencies, it being to the advantage of the state to make the most beneficial use of individual managerial skills.

(2) To accomplish the purposes of subsection (1) of this section, the ((~~board~~)) director, notwithstanding any other provision of this chapter, may provide policies and standards for recruitment, appointment, examination, training, probation, employment register control, certification, classification, salary administration, transfer, promotion, reemployment, conditions of employment, and separation separate from procedures established for other employment.

(3) The director, in consultation with affected agencies, shall ((~~recommend to the board the classified positions which~~)) determine which classified positions may be filled by participants in the career executive program. Upon the request of an agency, management positions that are exempt from the state civil service law pursuant to RCW 41.06.070 may be included in all or any part of the career executive program: PROVIDED, That an agency may at any time, after providing written notice to the ((~~board~~)) director, withdraw an exempt position from the career executive program. No employee may be placed in the career executive program without the employee's consent.

(4) The number of employees participating in the career executive program shall not exceed one percent of the employees subject to the provisions of this chapter.

(5) The director shall monitor and review the impact of the career executive program to ensure that the responsibilities of the state to provide equal employment opportunities are diligently carried out. ((~~The director shall report to the board the impact of the career executive program on the fulfillment of such responsibilities.~~))

(6) Any classified state employee, upon entering a position in the career executive program, shall be entitled subsequently to revert to any class or position previously held with permanent status, or, if such position is not available, revert to a position similar in nature and salary to the position previously held.

Sec. 20. Section 10, chapter 208, Laws of 1982 and RCW 41.06.450 are each amended to read as follows:

(1) By January 1, 1983, the ((~~personnel board~~)) director shall adopt rules applicable to each agency to ensure that information relating to employee misconduct or alleged misconduct is destroyed or maintained as follows:

(a) All such information determined to be false and all such information in situations where the employee has been fully exonerated of wrongdoing, shall be promptly destroyed;

(b) All such information having no reasonable bearing on the employee's job performance or on the efficient and effective management of the agency, shall be promptly destroyed;

(c) All other information shall be retained only so long as it has a reasonable bearing on the employee's job performance or on the efficient and effective management of the agency.

(2) Notwithstanding subsection (1) of this section, an agency may retain information relating to employee misconduct or alleged misconduct if:

(a) The employee requests that the information be retained; or

(b) The information is related to pending legal action or legal action may be reasonably expected to result.

(3) In adopting rules under this section, the ((~~personnel board~~)) director shall consult with the public disclosure commission to ensure that the public policy of the state, as expressed in chapter 42.17 RCW, is adequately protected.

Sec. 21. Section 2, chapter 269, Laws of 1986 and RCW 41.06.475 are each amended to read as follows:

The ((~~state personnel board~~)) director shall adopt rules, in cooperation with the secretary of social and health services, for the background investigation of persons being considered for state employment in positions directly responsible for the supervision, care, or treatment of children or developmentally disabled persons.

Sec. 22. Section 4, chapter 311, Laws of 1981 as amended by section 4, chapter 34, Laws of 1984 and by section 73, chapter 287, Laws of 1984 and RCW 41.64.030 are each reenacted and amended to read as follows:

(1) The board shall operate on ((~~either a part-time or~~)) a full-time basis((~~, as determined by the governor~~)). ((~~If it is determined that the board shall operate on a full-time basis,~~)) Each member of the board shall receive an annual salary to be determined by the governor pursuant to RCW 43.03.040. ((~~If it is determined that the board shall operate on a part-time basis, each member of the board shall be compensated in accordance with RCW 43.03.250.~~)) Each board member shall receive reimbursement for travel expenses incurred in the discharge of his or her duties in accordance with RCW 43.03.050 and 43.03.060.

(2) Members of the board shall report their financial affairs to the public disclosure commission pursuant to RCW 42.17.240 and 42.17.241.

Sec. 23. Section 10, chapter 311, Laws of 1981 and RCW 41.64.090 are each amended to read as follows:

The board shall have jurisdiction to decide appeals ((~~filed on or after July 1, 1981,~~)) of applicants for employment and employees under the jurisdiction of the state department of personnel ((~~board~~)) pursuant to RCW 41.06.170 and 41.06.340, as now or hereafter amended.

NEW SECTION. Sec. 24. All powers, duties, and functions of the department of personnel and the state personnel board pertaining to personnel appeals functions are transferred to the personnel appeals board. All references to the director or department of personnel or the state personnel board in the Revised Code of Washington shall be construed to mean the personnel appeals board when referring to the functions transferred in this section.

NEW SECTION. Sec. 25. All reports, documents, surveys, books, records, files, papers, or written material in the possession of the department of personnel pertaining to the powers, functions, and duties transferred in section 24 of this act shall be delivered to the custody of the personnel appeals board. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the department of personnel in carrying out the powers, functions, and duties transferred shall be made available to the personnel appeals board. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the personnel appeals board.

Any appropriations made to the department of personnel for carrying out the powers, functions, and duties transferred in section 24 of this act shall, on the effective date of this section, be transferred and credited to the personnel appeals board.

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 shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

NEW SECTION. Sec. 26. All employees of the department of personnel engaged in performing the powers, functions, and duties transferred in section 24 of this act are transferred to the jurisdiction of the personnel appeals board. All employees are assigned to the personnel appeals board to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

NEW SECTION. Sec. 27. All rules and all pending business before the state personnel board pertaining to the powers, functions, and duties transferred in section 24 of this act shall be continued and acted upon by the personnel appeals board. All existing contracts and obligations shall remain in full force and shall be performed by the personnel appeals board.

NEW SECTION. Sec. 28. The transfer of the powers, duties, functions, and personnel of the state personnel board in section 24 of this act shall not affect the validity of any act performed or rule adopted prior to the effective date of this section.

NEW SECTION. Sec. 29. If apportionments of budgeted funds are required because of the transfers directed by sections 25 through 28 of this act, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

NEW SECTION. Sec. 30. Nothing contained in sections 24 through 29 of this act may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the personnel board as provided by law.

NEW SECTION. Sec. 31. All powers, duties, and functions of the state personnel board except for those personnel appeals functions transferred in section 24 of this act are transferred to the director of personnel. All references to the state personnel board in the Revised Code of Washington shall be construed to mean the director of personnel when referring to the functions transferred in this section.

Sec. 32. Section 2, chapter 67, Laws of 1981 as amended by section 1, chapter 189, Laws of 1982 and RCW 34.12.020 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Office" means the office of administrative hearings.

(2) "Administrative law judge" means any person appointed by the chief administrative law judge to conduct or preside over hearings as provided in this chapter.

(3) "Hearing" means ((~~a "contested case~~)) an "adjudicative proceeding" within the meaning of RCW ((~~34.04.010(3)~~)) 34.05.010(1) conducted by a state agency under RCW 34.05.413 through 34.05.476.

(4) "State agency" means any state board, commission, department, or officer authorized by law to make rules or to ((~~adjudicate contested cases~~)) conduct adjudicative proceedings, except those in the legislative or judicial branches, the pollution control hearings board, the shorelines hearings board, the forest practices appeals board, the environmental hearings office, the board of industrial insurance appeals, the ((~~state~~)) department of personnel ((~~board~~)), the higher education personnel board, the public employment relations commission, the personnel appeals board, and the board of tax appeals.

Sec. 33. Section 1, chapter 150, Laws of 1979 ex. sess. as amended by section 1, chapter 182, Laws of 1980 and RCW 41.04.340 are each amended to read as follows:

As used in this section the term "eligible employee" means any employee of the state, other than teaching and research faculty at the state and regional universities and The Evergreen State College, entitled to accumulate sick leave and for whom accurate sick leave records have been maintained: PROVIDED, That no employee may receive compensation under this section for any portion of sick leave accumulated at a rate in excess of one day per month.

An attendance incentive program is established for all eligible employees. In January of the year following any year in which a minimum of sixty days of sick leave is accrued, and each January thereafter, any eligible employee may receive remuneration for unused sick leave accumulated in the previous year at a rate equal to one day's monetary compensation of the employee for each four full days of accrued sick leave in excess of sixty days. Sick leave for which compensation has been received shall be deducted from accrued sick leave at the rate of four days for every one day's monetary compensation.

At the time of separation from state service due to retirement or death, an eligible employee or the employee's estate shall receive remuneration at a rate equal to one day's current monetary compensation of the employee for each four full days of accrued sick leave: PROVIDED, That community college districts may delay until July 1, 1981, payment due any eligible employee or employee's estate: PROVIDED FURTHER, That there shall be added to any such delayed payment interest at the rate of eight percent per year.

Moneys received under this section shall not be included for the purpose of computing a retirement allowance under any public retirement system in this state.

This section shall be administered, and rules shall be promulgated to carry out its purposes, by the ((~~state~~)) director of personnel ((~~board~~)) and the higher education personnel board for persons subject to chapters 41.06 and 28B.16 RCW, respectively, and by their respective personnel authorities for other eligible employees: PROVIDED, That determination of classes of eligible employees shall be subject to approval by the office of financial management.

Should the legislature revoke any benefits granted under this section, no affected employee shall be entitled thereafter to receive such benefits as a matter of contractual right.

Sec. 34. Section 3, chapter 152, Laws of 1979 and RCW 41.48.140 are each amended to read as follows:

Nothing in RCW 41.48.120 or 41.48.130 shall affect the power of the ((~~state~~)) department of personnel ((~~board~~)), the higher education personnel board, or any other state personnel authority to establish sick leave regulations except as may be required under RCW 41.48.120 or 41.48.130: PROVIDED, That each personnel board and personnel authority shall establish the maximum number of working days an employee under its jurisdiction may be absent on account of sickness or accident disability without a medical certificate.

"Personnel authority" as used in this section, means a state agency, board, committee, or similar body having general authority to establish personnel regulations.

Sec. 35. Section 17, chapter 105, Laws of 1975-'76 2nd ex. sess. and RCW 41.50.804 are each amended to read as follows:

Nothing contained in this chapter shall be construed to alter any existing collective bargaining agreement until any such agreement has expired or until any such bargaining unit has been modified by action of the department of personnel ((~~board~~)) as provided by law.

Sec. 36. Section 10, chapter 108, Laws of 1967 ex. sess. as amended by section 21, chapter 296, Laws of 1975 1st ex. sess. and RCW 41.56.100 are each amended to read as follows:

A public employer shall have the authority to engage in collective bargaining with the exclusive bargaining representative and no public employer shall refuse to engage in collective bargaining with the exclusive bargaining representative: PROVIDED, That nothing contained herein shall require any public employer to bargain collectively with any bargaining representative concerning any matter which by ordinance, resolution or charter of said public employer has been delegated to any civil service commission ((or)), personnel board ((~~similar in scope, structure and authority to the board created by chapter 41.06 RCW~~)), or the department of personnel. Upon the failure of the public employer and the exclusive bargaining representative to conclude a collective bargaining agreement, any matter in dispute may be submitted by either party to the commission.

Sec. 37. Section 9, chapter 167, Laws of 1982 as last amended by section 3, chapter 387, Laws of 1987 and RCW 41.60.041 are each amended to read as follows:

(1) Cash awards for suggestions generating net savings to the state shall be ten percent of the net savings.

(2) No award may be granted in excess of ten thousand dollars.

(3) If the suggestion is significantly modified when implemented, the percentage specified in subsection (1) of this section may be decreased at the option of the board.

(4) The board shall establish guidelines for making cash awards for suggestions for which benefits to the state are intangible or for which benefits cannot be calculated. In cases where cost avoidances are identified, the ((~~state~~)) department of personnel ((~~board~~)) and the higher education personnel board in consultation with the productivity board shall adopt rules which allow agencies and institutions of higher education to grant leave in lieu of cash awards.

(5) Funds for the awards shall be drawn from the appropriation of the agency benefiting from the employee's suggestion. If the suggestion reduces costs to a nonappropriated fund or reduces costs paid without appropriation from a nonappropriated portion of an appropriated fund, an award may be paid from the benefitting fund or account without appropriation.

(6) Awards and fees for suggestions which generate new or additional money for the general fund may be drawn from the general fund by joint approval of the productivity board and the director of financial management.

(7) In addition to the amount awarded, the agency shall transfer ten percent of the savings to the department of personnel service fund. Moneys so transferred shall be used exclusively for the operations of the productivity board or as an offset to any amount appropriated to the productivity board for administrative expenses from another revenue source, other than that provided under RCW 41.60.120.

The productivity board at least annually shall review amounts transferred to the department of personnel service fund under this section and may reduce the percentage of savings to be transferred or temporarily suspend transfer if cash receipts exceed needs for program administration.

Sec. 38. Section 1, chapter 311, Laws of 1981 and RCW 41.64.010 are each amended to read as follows:

(1) There is hereby created a "personnel appeals board," hereinafter in this chapter referred to as the "board," which shall consist of three members to be appointed by the governor, subject to confirmation by the senate. The first board shall be appointed within thirty days after May 19, 1981, for terms of two, four, and six years. Thereafter, appointments shall be made for six-year terms. A vacancy shall be filled by appointment by the governor for the unexpired term in which the vacancy exists. Each member shall continue to hold office after the expiration of the member's term until a successor has been appointed. Members may be reappointed to the board for successive terms. Persons appointed to the board shall be qualified by experience and training in the field of administrative procedures and merit principles. Such members:

(a) May not hold any other employment with the state;

(b) May not during the terms to which they are appointed be or become candidates for public office, hold any other public office or trust, engage in any occupation or business which interferes, or is inconsistent, with their duties as members of the board, serve on or under any committee of any political party, and may not have been officers of a political party for a period of one year immediately prior to their appointment; and

(c) May not for a period of one year after the termination of their membership on the board, act in a representative capacity before the board on any matter.

(2) Unless the context clearly indicates otherwise, the following definitions apply to this chapter:

(a) "Agency" means any agency as defined in RCW 41.06.020;

(b) For appeals filed on or after July 1, 1981, under RCW 41.64.090, "board" or "personnel appeals board" means the personnel appeals board created by subsection (1) of this section((;

(c) For purposes of RCW 41.64.080 through 41.64.140 for appeals filed before July 1, 1981, under RCW 41.06.170, as it existed prior to or after May 19, 1981, "board" or "personnel appeals board" means the state personnel board created by RCW 41.06.110)).

Sec. 39. Section 10, chapter 311, Laws of 1981 and RCW 41.64.090 are each amended to read as follows:

The board shall have jurisdiction to decide appeals filed on or after July 1, 1981, of employees under the jurisdiction of the ((~~state~~)) department of personnel ((~~board~~)) pursuant to RCW 41.06.170, as now or hereafter amended.

Sec. 40. Section 1, chapter 130, Laws of 1891 as last amended by section 1, chapter 28, Laws of 1983 1st ex. sess. and RCW 42.16.010 are each amended to read as follows:

(1) Except as provided otherwise in subsection (2) of this section, all state officers and employees shall be paid for services rendered from the first day of the month through the fifteenth day of the month and for services rendered from the sixteenth day of the month through the last calendar day of the month. Paydates for these two pay periods shall be established by the director of financial management through the administrative hearing process and the official paydates shall be established six months prior to the beginning of each subsequent calendar year. Under no circumstance shall the paydate be established more than ten days after the pay period in which the wages are earned except when the designated paydate falls on Sunday, in which case the paydate shall not be later than the following Monday. Payment shall be deemed to have been made by the established paydates if: (a) The salary warrant is available at the geographic work location at which the warrant is normally available to the employee; or (b) the salary has been electronically transferred into the employee's account at the employee's designated financial institution; or (c) the salary warrants are mailed at least two days before the established paydate for those employees engaged in work in remote or varying locations from the geographic location at which the payroll is prepared, provided that the employee has requested payment by mail.

The office of financial management shall develop the necessary policies and operating procedures to assure that all remuneration for services rendered including basic salary, shift differential, standby pay, overtime, penalty pay, salary due based on contractual agreements, and special pay provisions, as provided for by law, department of personnel ((~~board~~)) rules, agency policy or rule, or contract, shall be available to the employee on the designated paydate. Overtime, penalty pay, and special pay provisions may be paid by the next following paydate if the postponement of payment is attributable to: The employee's not making a timely or accurate report of the facts which are the basis for the payment, or the employer's lack of reasonable opportunity to verify the claim.

Compensable benefits payable because of separation from state service shall be paid with the earnings for the final period worked unless the employee separating has not provided the agency with the proper notification of intent to terminate.

One-half of the employee's basic monthly salary shall be paid in each pay period. Employees paid on an hourly basis or employees who work less than a full pay period shall be paid for actual salary earned.

(2) Subsection (1) of this section shall not apply in instances where it would conflict with contractual rights or, with the approval of the office of financial management, to short-term, intermittent, noncareer state employees, to student employees of institutions of higher education, and to liquor control agency managers who are paid a percentage of monthly liquor sales.

Sec. 41. Section 2, chapter 34, Laws of 1984 as last amended by section 13, chapter 36, Laws of 1988 and RCW 42.17.2401 are each amended to read as follows:

For the purposes of RCW 42.17.240, the term "executive state officer" includes:

(1) The chief administrative law judge, the director of financial management, the director of personnel, the director of community development, the director of the state system of community colleges, the director of the department of information services, the executive secretary of the forest practices appeals board, the director of the gambling commission, the director of the higher education personnel board, the secretary of transportation, the executive secretary of the horse racing commission, the executive secretary of the human rights commission, the administrator of the interagency committee for outdoor recreation, the director of parks and recreation, the executive secretary of the ((~~board of prison terms and paroles~~)) indeterminate sentence review board, the administrator of the public disclosure commission, the director of retirement systems, the secretary of the utilities and transportation commission, the executive secretary of the board of tax appeals, the secretary of the state finance committee, the president of each of the regional and state universities and the president of The Evergreen State College, each district and each campus president of each state community college;

(2) Each professional staff member of the office of the governor;

(3) Each professional staff member of the legislature; and

(4) Each member of the state board for community college education, information services board, forest practices board, forest practices appeals board, gambling commission, wildlife commission, higher education personnel board, transportation commission, horse racing commission, human rights commission, board of industrial insurance appeals, liquor control board, interagency committee for outdoor recreation, parks and recreation commission, ((~~personnel board,~~)) personnel appeals board, ((~~board of prison terms and paroles~~)) indeterminate sentence review board, public disclosure commission, public employees' retirement system board, public pension commission, University of Washington board of regents, Washington State University board of regents, board of tax appeals, teachers' retirement system board of trustees, Central Washington University board of trustees, Eastern Washington University board of trustees, The Evergreen State College board of trustees, Western Washington University board of trustees, board of trustees of each community college, state housing finance commission, and the utilities and transportation commission.

Sec. 42. Section 9, chapter 167, Laws of 1988 and RCW 43.03.028 are each amended to read as follows:

(1) There is hereby created a state committee on agency officials' salaries to consist of seven members, or their designees, as follows: The president of the University of Puget Sound; the chairperson of the council of presidents of the state's four-year institutions of higher education; ((~~the chairperson of the State Personnel Board;~~)) the director of the state department of personnel; the president of the Association of Washington Business; the president of the Pacific Northwest Personnel Managers' Association; the president of the Washington State Bar Association; and the president of the Washington State Labor Council. If any of the titles or positions mentioned in this subsection are changed or abolished, any person occupying an equivalent or like position shall be qualified for appointment by the governor to membership upon the committee.

(2) The committee shall study the duties and salaries of the directors of the several departments and the members of the several boards and commissions of state government, who are subject to appointment by the governor or whose salaries are fixed by the governor, and of the chief executive officers of the following agencies of state government:

The arts commission; the human rights commission; the board of accountancy; the board of pharmacy; the capitol historical association and museum; the eastern Washington historical society; the Washington state historical society; the interagency committee for outdoor recreation; the criminal justice training commission; the department of personnel; the state finance committee; the state library; the traffic safety commission; the horse racing commission; the advisory council on vocational education; the public disclosure commission; the hospital commission; the state conservation commission; the commission on Hispanic affairs; the commission on Asian-American affairs; the state board for volunteer firemen; the transportation improvement board; the public employees relations commission; the forest practices appeals board; and the energy facilities site evaluation council.

The committee shall report to the governor or the chairperson of the appropriate salary fixing authority at least once in each fiscal biennium on such date as the governor may designate, but not later than seventy-five days prior to the convening of each regular session of the legislature during an odd-numbered year, its recommendations for the salaries to be fixed for each position.

(3) Committee members shall be reimbursed by the department of personnel for travel expenses under RCW 43.03.050 and 43.03.060.

Sec. 43. Section 2, chapter 155, Laws of 1986 and RCW 43.03.305 are each amended to read as follows:

There is created a commission to be known as the Washington citizens' commission on salaries for elected officials, to consist of fifteen members appointed by the governor as provided in this section.

(1) Eight of the fifteen commission members shall be selected by lot by the secretary of state from among those registered voters eligible to vote at the general election held in November, 1986, and thereafter from among those registered voters eligible to vote at the time of the selection. One member shall be selected from each congressional district. The secretary shall establish policies and procedures for conducting the selection by lot. The policies and procedures shall include, but not be limited to, those for notifying persons selected and for providing a new selection from a congressional district if a person selected from the district declines appointment to the commission.

(2) The remaining seven of the fifteen commission members, all residents of this state, shall be selected jointly by the speaker of the house of representatives and the president of the senate. The persons selected under this subsection shall have had experience in the field of personnel management. Of these seven members, one shall be selected from each of the following five sectors in this state: Private institutions of higher education; business; professional personnel management; legal profession; and organized labor. Of the two remaining members, one shall be a person recommended to the speaker and the president by the ((~~chairperson of the state personnel board~~)) director of personnel and one shall be a person recommended by majority vote of the presidents of the state's four-year institutions of higher education.

(3) The secretary of state shall forward the names of persons selected under subsection (1) of this section and the speaker of the house of representatives and president of the senate shall forward the names of persons selected under subsection (2) of this section to the governor who shall appoint these persons to the commission. Except as provided in subsection (6) of this section, the names of persons selected for appointment to the commission shall be forwarded to the governor not later than February 15, 1987, and not later than the fifteenth day of February every four years thereafter.

(4) Members shall hold office for terms of four years, and no person may be appointed to more than two such terms. No member of the commission may be removed by the governor during his or her term of office unless for cause of incapacity, incompetence, neglect of duty, or malfeasance in office or for a disqualifying change of residence.

(5) No state official, public employee, or lobbyist, or immediate family member of the official, employee, or lobbyist, subject to the registration requirements of chapter 42.17 RCW is eligible for membership on the commission.

As used in this subsection the phrase "immediate family" means the parents, spouse, siblings, children, or dependent relative of the official, employee, or lobbyist whether or not living in the household of the official, employee, or lobbyist.

(6) Upon a vacancy in any position on the commission, a successor shall be selected and appointed to fill the unexpired term. The selection and appointment shall be concluded within thirty days of the date the position becomes vacant and shall be conducted in the same manner as originally provided.

Sec. 44. Section 4, chapter 442, Laws of 1985 and RCW 43.06.425 are each amended to read as follows:

The ((~~state~~)) director of personnel ((~~board~~)) and the higher education personnel board shall each adopt rules to provide that:

(1) Successful completion of an internship under RCW 43.06.420 shall be considered as employment experience at the level at which the intern was placed;

(2) Persons leaving classified or exempt positions in state government in order to take an internship under RCW 43.06.420: (a) Have the right of reversion to the previous position at any time during the internship or upon completion of the internship; and (b) shall continue to receive all fringe benefits as if they had never left their classified or exempt positions;

(3) Participants in the undergraduate internship program who were not public employees prior to accepting a position in the program receive sick leave allowances commensurate with other state employees;

(4) Participants in the executive fellows program who were not public employees prior to accepting a position in the program receive sick and vacation leave allowances commensurate with other state employees.

Sec. 45. Section 5, chapter 442, Laws of 1985 and RCW 43.06.430 are each amended to read as follows:

The ((~~state~~)) director of personnel ((~~board~~)) shall adopt rules to provide that persons successfully completing an internship under the executive fellows program created under RCW 43.06.420 are eligible for positions in the career executive program under RCW 41.06.430.

Sec. 46. Section 10, chapter 3, Laws of 1981 as amended by section 3, chapter 219, Laws of 1981 and RCW 43.33A.100 are each amended to read as follows:

The state investment board shall maintain appropriate offices and employ such personnel as may be necessary to perform its duties. Employment by the investment board shall include but not be limited to an executive director, investment officers, and a confidential secretary, which positions are exempt from classified service under chapter 41.06 RCW. Employment of the executive director by the board shall be for a term of three years, and such employment shall be subject to confirmation of the state finance committee: PROVIDED, That nothing shall prevent the board from dismissing the director for cause before the expiration of the term nor shall anything prohibit the board, with the confirmation of the state finance committee, from employing the same individual as director in succeeding terms. Compensation levels for the investment officers employed by the investment board shall be established by the ((~~state~~)) director of personnel ((~~board~~)).

As of July 1, 1981, all employees classified under chapter 41.06 RCW and engaged in duties assumed by the state investment board on July 1, 1981, are assigned to the state investment board. The transfer shall not diminish any rights granted these employees under chapter 41.06 RCW nor exempt the employees from any action which may occur thereafter in accordance with chapter 41.06 RCW.

All existing contracts and obligations pertaining to the functions transferred to the state investment board in this 1980 act shall remain in full force and effect, and shall be performed by the board. None of the transfers directed by this 1980 act shall affect the validity of any act performed by a state entity or by any official or employee thereof prior to July 1, 1981.

Sec. 47. Section 2, chapter 486, Laws of 1987 and RCW 43.43.832 are each amended to read as follows:

(1) The legislature finds that businesses and organizations providing services to children or developmentally disabled persons need adequate information to determine which employees or licensees to hire or engage. Therefore, the Washington state patrol criminal identification system may disclose, upon the request of a business or organization as defined in RCW 43.43.830, a prospective employee's record for convictions of offenses against persons, adjudications of child abuse in a civil action, and disciplinary board final decisions. When necessary, applicants may be employed on a conditional basis pending completion of such a background investigation.

(2) The legislature also finds that the state board of education may request of the Washington state patrol criminal identification system information regarding a certificate applicant's record for convictions under subsection (1) of this section.

(3) The legislature also finds that law enforcement agencies, the office of the attorney general, prosecuting authorities, and the department of social and health services may request this same information to aid in the investigation and prosecution of child and adult abuse cases and to protect children and adults from further incidents of abuse.

(4) The legislature further finds that the department of social and health services, when considering persons for state positions directly responsible for the care, supervision, or treatment of children or the developmentally disabled or when licensing or authorizing such persons or agencies pursuant to its authority under chapter 74.15 RCW, must consider the information listed in subsection (1) of this section. However, when necessary, persons may be employed on a conditional basis pending completion of the background investigation. The ((~~state~~)) director of personnel ((~~board~~)) shall adopt rules to accomplish the purposes of this subsection as it applies to state employees.

Sec. 48. Section 16, chapter 115, Laws of 1975-'76 2nd ex. sess. and RCW 43.60A.906 are each amended to read as follows:

Nothing contained in this chapter shall be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until any such agreement has expired or until any such bargaining unit has been modified by action of the department of personnel ((~~board~~)) as provided by law.

Sec. 49. Section 9, chapter 289, Laws of 1977 ex. sess. as amended by section 4, chapter 27, Laws of 1983 1st ex. sess. and RCW 43.131.090 are each amended to read as follows:

Unless the legislature specifies a shorter period of time, a terminated state agency shall continue in existence until June 30th of the next succeeding year for the purpose of concluding its affairs: PROVIDED, That the powers and authority of the state agency shall not be reduced or otherwise limited during this period. Unless otherwise provided:

(1) All employees of terminated state agencies classified under chapter 41.06 RCW, the state civil service law, shall be transferred as appropriate or as otherwise provided in the procedures adopted by the director of personnel ((~~board~~)) pursuant to RCW 41.06.150;

(2) All documents and papers, equipment, or other tangible property in the possession of the terminated state agency shall be delivered to the custody of the agency assuming the responsibilities of the terminated agency or if such responsibilities have been eliminated, documents and papers shall be delivered to the state archivist and equipment or other tangible property to the department of general administration;

(3) All funds held by, or other moneys due to, the terminated state agency shall revert to the fund from which they were appropriated, or if that fund is abolished to the general fund;

(4) Notwithstanding the provisions of RCW ((~~34.04.940~~)) 34.05.020, all rules made by a terminated state agency shall be repealed, without further action by the state agency, at the end of the period provided in this section, unless assumed and reaffirmed by the agency assuming the related legal responsibilities of the terminated state agency;

(5) All contractual rights and duties of a state agency shall be assigned or delegated to the agency assuming the responsibilities of the terminated state agency, or if there is none to such agency as the governor shall direct.

Sec. 50. Section .03.06, chapter 79, Laws of 1947 as last amended by section 2, chapter 339, Laws of 1981 and RCW 48.03.060 are each amended to read as follows:

(1) Examinations within this state of any insurer domiciled or having its home offices in this state, other than a title insurer, made by the commissioner or ((~~his~~)) the commissioner's examiners and employees shall, except as to fees, mileage, and expense incurred as to witnesses, be at the expense of the state.

(2) Every other examination, whatsoever, or any part of the examination of any person domiciled or having its home offices in this state requiring travel and services outside this state, shall be made by the commissioner or by examiners designated by ((~~him~~)) the commissioner and shall be at the expense of the person examined; but a domestic insurer shall not be liable for the compensation of examiners employed by the commissioner for such services outside this state.

(3) The person examined and liable therefor shall reimburse the state upon presentation of an itemized statement thereof, for the actual travel expenses of the commissioner's examiners, their reasonable living expense allowance, and their per diem compensation, including salary and the employer's cost of employee benefits, at a reasonable rate approved by the commissioner, incurred on account of the examination. Per diem salary and expenses for employees examining insurers domiciled outside the state of Washington shall be established by the commissioner on the basis of the National Association of Insurance Commissioner's recommended salary and expense schedule for zone examiners, or the salary schedule established by the ((~~state~~)) director of personnel ((~~board~~)) and the expense schedule established by the office of financial management, whichever is higher. Domestic title insurers shall pay the examination expense and costs to the commissioner as itemized and billed by ((~~him~~)) the commissioner.

The commissioner or ((~~his~~)) the commissioner's examiners shall not receive or accept any additional emolument on account of any examination.

Sec. 51. Section 1, chapter 294, Laws of 1959 as last amended by section 364, chapter 7, Laws of 1984 and RCW 49.46.010 are each amended to read as follows:

As used in this chapter:

(1) "Director" means the director of labor and industries;

(2) "Wage" means compensation due to an employee by reason of employment, payable in legal tender of the United States or checks on banks convertible into cash on demand at full face value, subject to such deductions, charges, or allowances as may be permitted by regulations of the director;

(3) "Employ" includes to permit to work;

(4) "Employer" includes any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee;

(5) "Employee" includes any individual employed by an employer but shall not include:

(a) Any individual employed (i) on a farm, in the employ of any person, in connection with the cultivation of the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and furbearing animals and wildlife, or in the employ of the owner or tenant or other operator of a farm in connection with the operation, management, conservation, improvement, or maintenance of such farm and its tools and equipment; or (ii) in packing, packaging, grading, storing or delivering to storage, or to market or to a carrier for transportation to market, any agricultural or horticultural commodity; and the exclusions from the term "employee" provided in this item shall not be deemed applicable with respect to commercial canning, commercial freezing, or any other commercial processing, or with respect to services performed in connection with the cultivation, raising, harvesting, and processing of oysters or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption;

(b) Any individual employed in domestic service in or about a private home;

(c) Any individual employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesman as those terms are defined and delimited by regulations of the director. However, those terms shall be defined and delimited by the ((~~state~~)) director of personnel ((~~board~~)) pursuant to chapter 41.06 RCW and the higher education personnel board pursuant to chapter 28B.16 RCW for employees employed under their respective jurisdictions;

(d) Any individual engaged in the activities of an educational, charitable, religious, state or local governmental body or agency, or nonprofit organization where the employer-employee relationship does not in fact exist or where the services are rendered to such organizations gratuitously. If the individual receives reimbursement in lieu of compensation for normally incurred out-of-pocket expenses or receives a nominal amount of compensation per unit of voluntary service rendered, an employer-employee relationship is deemed not to exist for the purpose of this section or for purposes of membership or qualification in any state, local government or publicly supported retirement system other than that provided under chapter 41.24 RCW;

(e) Any individual employed full time by any state or local governmental body or agency who provides voluntary services but only with regard to the provision of the voluntary services. The voluntary services and any compensation therefor shall not affect or add to qualification, entitlement or benefit rights under any state, local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;

(f) Any newspaper vendor or carrier;

(g) Any carrier subject to regulation by Part 1 of the Interstate Commerce Act;

(h) Any individual engaged in forest protection and fire prevention activities;

(i) Any individual employed by any charitable institution charged with child care responsibilities engaged primarily in the development of character or citizenship or promoting health or physical fitness or providing or sponsoring recreational opportunities or facilities for young people or members of the armed forces of the United States;

(j) Any individual whose duties require that he or she reside or sleep at the place of his or her employment or who otherwise spends a substantial portion of ((~~his~~)) work time subject to call, and not engaged in the performance of active duties;

(k) Any resident, inmate, or patient of a state, county, or municipal correctional, detention, treatment or rehabilitative institution;

(l) Any individual who holds a public elective or appointive office of the state, any county, city, town, municipal corporation or quasi municipal corporation, political subdivision, or any instrumentality thereof, or any employee of the state legislature;

(m) All vessel operating crews of the Washington state ferries operated by the department of transportation;

(n) Any individual employed as a seaman on a vessel other than an American vessel.

(6) "Occupation" means any occupation, service, trade, business, industry, or branch or group of industries or employment or class of employment in which employees are gainfully employed.

Sec. 52. Section 12, chapter 26, Laws of 1963 as last amended by section 13, chapter 123, Laws of 1983 and RCW 70.87.120 are each amended to read as follows:

(1) The department shall appoint and employ inspectors, as may be necessary to carry out the provisions of this chapter, under the provisions of the rules adopted by the ((~~state~~)) director of personnel ((~~board~~)) in accordance with chapter 41.06 RCW.

(2) The department shall cause all conveyances to be inspected and tested at least once each year. Inspectors have the right during reasonable hours to enter into and upon any building or premises in the discharge of their official duties, for the purpose of making any inspection or testing any conveyance contained thereon or therein. Inspections and tests shall conform with the rules adopted by the department. The department shall inspect all installations before it issues any initial permit for operation. Permits shall not be issued until the fees required by this chapter have been paid.

(3) If inspection shows a conveyance to be in an unsafe condition, the department shall issue an inspection report in writing requiring the repairs or alterations to be made to the conveyance that are necessary to render it safe and may also suspend or revoke a permit pursuant to RCW 70.87.125 or order the operation of a conveyance discontinued pursuant to RCW 70.87.145.

(4) The department may investigate accidents and alleged or apparent violations of this chapter.

Sec. 53. Section 72.01.210, chapter 28, Laws of 1959 as last amended by section 69, chapter 136, Laws of 1981 and RCW 72.01.210 are each amended to read as follows:

The secretary of corrections shall appoint chaplains for the state correctional institutions for convicted felons; and the secretary of social and health services shall appoint chaplains for the correctional institutions for juveniles found delinquent by the juvenile courts; and the secretary of corrections and the secretary of social and health services shall appoint one or more chaplains for other custodial, correctional and mental institutions under their control. The chaplains so appointed shall have the qualifications and shall be compensated in an amount, as shall hereafter be recommended by the department and approved by the ((~~state~~)) director of personnel ((~~board~~)).

Sec. 54. Section 5, chapter 165, Laws of 1963 as amended by section 226, chapter 141, Laws of 1979 and RCW 72.19.050 are each amended to read as follows:

The superintendent shall have the following powers, duties and responsibilities:

(1) Subject to the rules and regulations of the department, the superintendent shall have the supervision and management of the institution, of the grounds and buildings, the subordinate officers and employees, and of the juveniles received at such institution and the custody of such persons until released or transferred as provided by law.

(2) Subject to the rules and regulations of the department and the ((~~state~~)) director of personnel ((~~board~~)), appoint all subordinate officers and employees.

(3) The superintendent shall be the custodian of the personal property of all juveniles in the institution and shall make rules and regulations governing the accounting and disposition of all moneys received by such juveniles, not inconsistent with the law, and subject to the approval of the secretary.

Sec. 55. Section 74.09.150, chapter 26, Laws of 1959 and RCW 74.09.150 are each amended to read as follows:

All personnel employed in the administration of the medical care program shall be covered by the existing merit system under the ((~~state~~)) department of personnel ((~~board or its successor~~)).

NEW SECTION. Sec. 56. The following acts or parts of acts are each repealed:

(1) Section 8, chapter 10, Laws of 1982, section 69, chapter 287, Laws of 1984 and RCW 41.06.110;

(2) Section 12, chapter 1, Laws of 1961, section 2, chapter 43, Laws of 1975-'76 2nd ex. sess., section 17, chapter 311, Laws of 1981 and RCW 41.06.120;

(3) Section 23, chapter 1, Laws of 1961 and RCW 41.06.230;

(4) Section 24, chapter 1, Laws of 1961 and RCW 41.06.240;

(5) Section 1, chapter 45, Laws of 1969 and RCW 41.06.300;

(6) Section 2, chapter 45, Laws of 1969 and RCW 41.06.310;

(7) Section 3, chapter 45, Laws of 1969 and RCW 41.06.320;

(8) Section 4, chapter 45, Laws of 1969 and RCW 41.06.330; and

(9) Section 2, chapter 127, Laws of 1959, section 148, chapter 34, Laws of 1975-'76 2nd ex. sess. and RCW 50.12.031.

NEW SECTION. Sec. 57. The following sections are each decodified:

(1) RCW 41.64.900; and

(2) RCW 72.09.220.

NEW SECTION. Sec. 58. The sum of ______ dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1991, from the department of personnel service fund to the personnel appeals board for the purposes of this act.

NEW SECTION. Sec. 59. 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. 60. This act shall take effect January 1, 1990.