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NINETY-SIXTH DAY

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MORNING SESSION

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Senate Chamber, Olympia, Friday, April 18, 1997

The Senate was called to order at 9:00 a.m. by President Owen. The Secretary called the roll and announced to the President that all Senators were present except Senators Prince and Sellar.

The Sergeant at Arms Color Guard, consisting of Pages Lindy Falk and Allison Myers, presented the Colors. Reverend Bob Moorehead, pastor of the Overlake Christian Church of Kirkland, and a guest of Senator Dan McDonald, offered the prayer.

MOTION

On motion of Senator Johnson, the reading of the Journal of the previous day was dispensed with and it was approved.

REPORTS OF STANDING COMMITTEES

GUBERNATORIAL APPOINTMENTS

April 17, 1997

GA 9121 MERRITT LONG, appointed January 15, 1997, for a term ending at the pleasure of the Governor, as Director of the Lottery Commission.

Reported by Committee on Commerce and Labor

MAJORITY Recommendation: That said appointment be confirmed. Signed by Senators Schow, Chair; Horn, Vice Chair; Franklin, Fraser, Heavey and Newhouse.

Passed to Committee on Rules for second reading.

April 17, 1997

GA 9199 MARILYN G. SAYAN, reappointed January 28, 1997, for a term ending September 8, 2000, as Chair of the Public Employment Relations Commission.

Reported by Committee on Commerce and Labor

MAJORITY Recommendation: That said reappointment be confirmed. Signed by Senators Schow, Chair; Horn, Vice Chair; Franklin, Fraser, Heavey and Newhouse.

Passed to Committee on Rules for second reading.

April 17, 1997

GA 9233 BARBARA SHINPOCH, reappointed February 7, 1997, for a term ending January 17, 2003, as a member of the Horse Racing Commission.

Reported by Committee on Commerce and Labor

MAJORITY Recommendation: That said reappointment be confirmed. Signed by Senators Schow, Chair; Horn, Vice Chair; Franklin, Fraser, Heavey and Newhouse.

Passed to Committee on Rules for second reading.

April 17, 1997

GA 9239 CHARLIE BRYDON, appointed March 10, 1997, for a term ending January 15, 2003, as a member of the Liquor Control Board.

Reported by Committee on Commerce and Labor

MAJORITY Recommendation: That said appointment be confirmed. Signed by Senators Schow, Chair; Horn, Vice Chair; Franklin, Heavey and Newhouse.

Passed to Committee on Rules for second reading.

April 17, 1997

GA 9240 JESSE FARIAS, appointed April 1, 1997, for a term ending January 15, 2001, as a member of the Liquor Control Board.

Reported by Committee on Commerce and Labor

MAJORITY Recommendation: That said appointment be confirmed. Signed by Senators Schow, Chair; Horn, Vice Chair; Franklin, Heavey and Newhouse.

Passed to Committee on Rules for second reading.

MESSAGES FOR THE GOVERNOR

GUBERNATORIAL APPOINTMENTS

April 2, 1997

TO THE HONORABLE, THE SENATE OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

I have the honor to submit the following appointment, subject to your confirmation.

Sharon Hart, appointed April 2, 1997, for a term ending September 30, 1998, as a member of the Board of Trustees for Lower Columbia Community College, District No. 13.

Sincerely,

GARY LOCKE, Governor

Referred to the Committee on Higher Education.

April 2, 1997

TO THE HONORABLE, THE SENATE OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

I have the honor to submit the following appointment, subject to your confirmation.

Judge Marshall Forrest, appointed April 2, 1997, for a term ending June 30, 2002, as a member of the Gambling Commission.

Sincerely,

GARY LOCKE, Governor

Referred to the Committee on Commerce and Labor.

FURTHER MESSAGE FROM THE GOVERNOR

April 18, 1997

TO THE HONORABLE, THE SENATE OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

I have the honor to advise you that on April 17, 1997, Governor Locke approved the following Senate Bills entitled:

Senate Bill No. 5364

Relating to local government unclassified employees.

Engrossed Senate Bill No. 6098

Relating to human services.

Sincerely,

EVERETT H. BILLINGSLEA, General Counsel

VETO MESSAGE FROM THE GOVERNOR

ENGROSSED SENATE BILL NO. 5163

April 17, 1997

To the Honorable President and Members,

The Senate of the State of Washington

Ladies and Gentlemen:

I am returning herewith, without my approval, Engrossed Senate Bill No. 5163 entitled:

"AN ACT Relating to the expiration of filed financing statements;"

This legislation provides that the Department of Licensing shall notify all creditors who file a UCC financing statement, four and one-half years after filing, that the lien expires after five years unless a continuation statement is filed. Failure to provide this notice does not create a cause of action against the state.

No change to the Uniform Commercial Code should be made lightly and without first studying its affect on the transaction of business and considering the recommendations of the National Conference of Commissioners on Uniform State Laws. This bill would make Washington's law non-uniform, creating uncertainty for those doing business in Washington and between Washington and other states. Although it protects the state from liability if a notice is not received by a creditor, it would create difficulties in enforcing security interests in cases where a UCC financing statement has lapsed and no warning notice was received. Uncertainty in such a fundamental aspect of commercial law is simply not acceptable to me.

It might be more practical to require that a Washington UCC financing statement contain a clear and simple warning statement that it will expire, that expiration could leave the creditor without security, and the date of expiration.

State government should not insert itself into the everyday operation of business unless there is a compelling public safety or other interest to be served. This bill does not meet that test. Most of the beneficiaries of this service would be banks and other sophisticated, well-financed organizations with their own internal system of flagging due dates such as this.

Finally, since no funds are currently included in the bill or budgets passed by the legislature for this new service, the Department of Licensing would have to absorb this new task into its current appropriation, or, more likely, institute a fee increase. A fee increase to provide for a service that most beneficiaries feel is redundant and unnecessary is not justified.

For these reasons, I have vetoed Engrossed Senate Bill No. 5163 in its entirety.

Respectfully submitted,

GARY LOCKE, Governor

MOTION

On motion of Senator Johnson, the Veto Message on Engrossed Senate Bill No. 5163 was held on the desk.

MESSAGE FROM THE HOUSE

April 17, 1997

MR. PRESIDENT:

The Speaker has signed:

SUBSTITUTE HOUSE BILL NO. 1047,

ENGROSSED HOUSE BILL NO. 1411,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1576,

HOUSE BILL NO. 1802,

HOUSE BILL NO. 1828,

HOUSE BILL NO. 1908,

SUBSTITUTE HOUSE BILL NO. 1955,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1969,

SUBSTITUTE HOUSE BILL NO. 2044, and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

SIGNED BY THE PRESIDENT

The President signed:

SUBSTITUTE HOUSE BILL NO. 1047,

ENGROSSED HOUSE BILL NO. 1411,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1576,

HOUSE BILL NO. 1802,

HOUSE BILL NO. 1828,

HOUSE BILL NO. 1908,

SUBSTITUTE HOUSE BILL NO. 1955,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1969,

SUBSTITUTE HOUSE BILL NO. 2044.

President Pro Tempore Newhouse assumed the Chair.

MOTION

On motion of Senator Wood, the following resolution was adopted:

SENATE RESOLUTION 1997-8636

By Senators Wood, Winsley, Kohl, McDonald, Anderson, Heavey, Thibaudeau, Loveland, Fraser, Roach, Jacobsen, Wojahn, Benton, Finkbeiner, Brown, Stevens, Johnson, Long, Patterson, Fairley, Prentice, Bauer, Rossi, Zarelli, West, Newhouse, Kline, Morton, Rasmussen, Strannigan, Haugen, Spanel, Swecker, Horn, Goings, Franklin, Sheldon, Swanson, Hochstatter, Schow, Prince and Snyder

WHEREAS, The Washington State Legislature, in 1981, established the Washington Scholars Program to recognize selected senior students from Washington public and private high schools for their academic achievements, leadership abilities, and community service contributions; and

WHEREAS, Three graduating seniors are selected from each of the state's forty-nine legislative districts by a review committee composed of distinguished secondary and postsecondary educators; and

WHEREAS, The students selected for special recognition as Washington Scholars have distinguished themselves by their energy and diversity as student leaders; as participants in music, debate, sports, and other activities; and through valuable service to their communities; and

WHEREAS, The families of these students have nurtured and supported the individual interests and special talents of their children; and

WHEREAS, The state of Washington benefits from the accomplishments of these caring and gifted individuals, not only as students, but as citizens of our communities and our state;

NOW, THEREFORE, BE IT RESOLVED, That the Senate recognize and congratulate the Washington Scholars for their hard work, dedication, and maturity in achieving this noteworthy accomplishment; and

BE IT FURTHER RESOLVED, That the Senate commend the families of these students for their encouragement and support; and

BE IT FURTHER RESOLVED, That the Secretary of the Senate immediately transmit copies of this resolution to all of the Washington Scholars from each of the forty-nine legislative districts.

Senators Wood, Sheldon, Heavey, Kohl and McAuliffe spoke to Senate Resolution 1997-8636.

INTRODUCTION OF SPECIAL GUESTS

The President Pro Tempore welcomed and introduced the Washington Scholars and their parents who were seated in the gallery.

MOTION

On motion of Senator Johnson, the Senate reverted to the sixth order of business.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2050, by House Committee on Agriculture and Ecology (originally sponsored by Representatives Mastin, Chandler, Clements and Honeyford)

Identifying when a new water right would interfere with an existing water right.

The bill was read the second time.

MOTION

Senator Morton moved that the following Committee on Agriculture and Environment striking amendment not be adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 90.03.380 and 1996 c 320 s 19 are each amended to read as follows: (1) The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the same is used: PROVIDED, HOWEVER, That said right may be transferred to another or to others and become appurtenant to any other land or place of use without loss of priority of right theretofore established if such change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if such change can be made without detriment or injury to existing rights. Before any transfer of such right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department, and said application shall not be granted until notice of said application shall be published as provided in RCW 90.03.280. If it shall appear that such transfer or such change may be made without injury or detriment to existing rights, the department shall issue to the applicant a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant may be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water. (2) If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts. (3) A change in place of use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of jurisdiction of the joint board and the change can be made without detriment or injury to existing rights. (4) Any right represented by an application for a water right for which a permit for water use has not been issued by the time a transfer or change is approved under this section shall not be construed as being injured or detrimentally affected by the transfer or change. (5) This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070. Sec. 2. RCW 90.44.100 and 1987 c 109 s 113 are each amended to read as follows: After an application to, and upon the issuance by the department of an amendment to the appropriate permit or certificate of ground water right, the holder of a valid right to withdraw public ground waters may, without losing his priority of right, construct wells or other means of withdrawal at a new location in substitution for or in addition to those at the original location, or he may change the manner or the place of use of the water: PROVIDED, HOWEVER, That such amendment shall be issued only after publication of notice of the application and findings as prescribed in the case of an original application. Such amendment shall be issued by the department only on the conditions that: (1) The additional or substitute well or wells shall tap the same body of public ground water as the original well or wells; (2) use of the original well or wells shall be discontinued upon construction of the substitute well or wells; (3) the construction of an additional well or wells shall not enlarge the right conveyed by the original permit or certificate; and (4) other existing rights shall not be impaired. The department may specify an approved manner of construction and shall require a showing of compliance with the terms of the amendment, as provided in RCW 90.44.080 in the case of an original permit. Any right represented by an application for a water right for which a permit for water use has not been issued by the time an amendment is approved under this section shall not be construed as being impaired by the amendment. Sec. 3. RCW 90.44.030 and 1945 c 263 s 2 are each amended to read as follows: The rights to appropriate the surface waters of the state and the rights acquired by the appropriation and use of surface waters shall not be affected or impaired by any of the provisions of this supplementary chapter and, to the extent that any underground water is part of or tributary to the source of any surface stream or lake, or that the withdrawal of ground water may affect the flow of any spring, water course, lake, or other body of surface water, the right of an appropriation and owner of surface water shall be superior to any subsequent right hereby authorized to be acquired in or to ground water. (2) Rights acquired by appropriation of surface waters are affected or impaired by a ground water withdrawal only if: (a) After no more than six months pumping, the surface water will lie within the cone of depression of a well tapping an unconfined aquifer; or (b) Withdrawal of ground water from a well tapping a confined aquifer will cause a measurable head reduction within fifty feet of the surface water body in question in the shallowest unconfined water table aquifer that underlies that surface water body; or (c) Withdrawal of ground water will cause a measurable reduction in the flow or level of the surface water body. (3) If any of the conditions in subsection (2) of this section occur or will occur, then withdrawal of ground water affects or impairs existing surface water rights, including instream flow appropriations adopted by regulation, that are not being satisfied during the period of the occurrence. Sec. 4. RCW 90.44.035 and 1987 c 109 s 107 are each amended to read as follows: For purposes of this chapter: (1) "Department" means the department of ecology; (2) "Director" means the director of ecology; (3) "Ground waters" means all waters that exist beneath the land surface or beneath the bed of any stream, lake or reservoir, or other body of surface water within the boundaries of this state, whatever may be the geological formation or structure in which such water stands or flows, percolates or otherwise moves. There is a recognized distinction between natural ground water and artificially stored ground water; (4) "Natural ground water" means water that exists in underground storage owing wholly to natural processes; ((and)) (5) "Artificially stored ground water" means water that is made available in underground storage artificially, either intentionally, or incidentally to irrigation and that otherwise would have been dissipated by natural waste; (6) "Confined aquifer" means an aquifer in which ground water is under sufficient hydrostatic head to rise above the bottom of the overlying confining bed; (7) "Confining bed" means a layer of low permeability material immediately overlying a confined aquifer; and (8) "Measurable" means capable of being measured in the field with the use of equipment normally used by professionals for the measurement in question. Sec. 5. RCW 90.44.070 and 1987 c 109 s 110 are each amended to read as follows: (1) No permit shall be granted for the development or withdrawal of public ground waters beyond the capacity of the underground bed or formation in the given basin, district, or locality to yield such water within a reasonable or feasible pumping lift in case of pumping developments, or within a reasonable or feasible reduction of pressure in the case of artesian developments. The department shall have the power to determine whether the granting of any such permit will injure or damage any vested or existing right or rights under prior permits and may in addition to the records of the department, require further evidence, proof, and testimony before granting or denying any such permits. (2) No permit for the development or withdrawal of public ground waters may be denied or conditioned due to injury to, impairment of, or conflict with an existing surface water right unless the ground water withdrawal in question will impair the surface water right pursuant to RCW 90.44.030(2): PROVIDED, That this section does not affect the ability of the department to limit or restrict future ground water appropriations by adopting rules after following the procedures of RCW 90.44.180 or 90.44.400 through 90.44.420 or chapter 90.54 RCW. (3) The standards governing impairment of existing surface water rights by applications to appropriate public ground water in RCW 90.44.030(2), this subsection, and subsection (2) of this section apply only to the determinations to be made by the department in ruling upon such applications, and reflect the uncertainties inherent in making tentative determinations regarding future impacts of withdrawing ground water. Any person claiming that a senior water right is injured by one or more junior water rights may file an action to enjoin the junior water rights in the superior court of the county where the claimed senior water right is located. The superior court shall hear such action de novo, and if it finds by a preponderance of the evidence that one or more junior water rights is causing or contributing to the injury of a senior water right, the court may enjoin use of the junior water rights in reverse order of priority in the manner it deems necessary to protect the senior water right. This section does not apply where the claimed senior water right consists of a minimum flow or level of the closure of a surface water body. NEW SECTION. Sec. 6. A new section is added to chapter 90.03 RCW to read as follows: (1) The existence of hydraulic continuity between ground water and a surface body of water does not, in itself, constitute the impairment of an existing water right in the surface water body by a proposed permit for a ground water right or an amendment to a ground water right. (2) In making a determination as to whether an application to appropriate public water will impair existing rights the department shall take into consideration: (a) The availability of water and the effect of granting a water right permit, transfer, change, or amendment are those that exist with the incorporation of the effects of any offset to be provided by the applicant under RCW 90.03.255 or 90.44.055 or any other water supply augmentation or mitigation to be provided by the applicant as part of his or her application for a water right permit, transfer, change, or amendment; (b) Seasonal variations in water supply and in the recharge of surface and ground water bodies; and (c) The provisions of RCW 90.44.030. (3) The rule of impairment provided by RCW 90.44.030 is provided for water allocation decisions made by the department and is provided to adjust for the uncertainty that is inherent in evaluating the effects of proposed ground water withdrawals on surface water bodies. It does not provide a standard for reviewing any claim made by a person with a senior water right in superior court or in an appeal of a superior court decision that the person's senior water right is impaired or injured by the use of any junior water right or that the use of a junior water right conflicts with or is detrimental to the use of the person's senior water right. NEW SECTION. Sec. 7. Any person whose application to appropriate public ground water was denied by the department of ecology between November 1, 1995, and the effective date of this section, when one of the grounds for denial was that the proposed ground water withdrawal would impair, or conflict with, surface water closures or surface water rights including minimum flows, may have his or her application reconsidered in accordance with this section. Any such person desiring reconsideration shall resubmit his or her application to the department of ecology within thirty days of the effective date of this section. The department of ecology shall accord any such resubmitted application its original priority date and shall reconsider the application on a priority basis, applying the standards of this act. The decision of the department of ecology may be appealed in the manner provided by law for appeals of decisions on applications to appropriate public water." The President declared the question before the Senate to be the motion by Senator Morton to not adopt the Committee on Agriculture and Environment striking amendment to Engrossed Substitute House Bill No. 2050.

The motion by Senator Morton carried and the Committee on Agriculture and Environment striking amendment was not adopted.

MOTION

Senator Morton moved that the following amendment be adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 90.03.380 and 1996 c 320 s 19 are each amended to read as follows: (1) The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the same is used: PROVIDED, HOWEVER, That said right may be transferred to another or to others and become appurtenant to any other land or place of use without loss of priority of right theretofore established if such change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if such change can be made without detriment or injury to existing rights. Before any transfer of such right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department, and said application shall not be granted until notice of said application shall be published as provided in RCW 90.03.280. If it shall appear that such transfer or such change may be made without injury or detriment to existing rights, the department shall issue to the applicant a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant may be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water. (2) If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts. (3) A change in place of use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of jurisdiction of the joint board and the change can be made without detriment or injury to existing rights. (4) Any right represented by an application for a water right for which a permit for water use has not been issued by the time a transfer or change is approved under this section shall not be construed as being injured or detrimentally affected by the transfer or change. (5) This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070. Sec. 2. RCW 90.44.100 and 1987 c 109 s 113 are each amended to read as follows: After an application to, and upon the issuance by the department of an amendment to the appropriate permit or certificate of ground water right, the holder of a valid right to withdraw public ground waters may, without losing his priority of right, construct wells or other means of withdrawal at a new location in substitution for or in addition to those at the original location, or he may change the manner or the place of use of the water: PROVIDED, HOWEVER, That such amendment shall be issued only after publication of notice of the application and findings as prescribed in the case of an original application. Such amendment shall be issued by the department only on the conditions that: (1) The additional or substitute well or wells shall tap the same body of public ground water as the original well or wells; (2) use of the original well or wells shall be discontinued upon construction of the substitute well or wells; (3) the construction of an additional well or wells shall not enlarge the right conveyed by the original permit or certificate; and (4) other existing rights shall not be impaired. The department may specify an approved manner of construction and shall require a showing of compliance with the terms of the amendment, as provided in RCW 90.44.080 in the case of an original permit. Any right represented by an application for a water right for which a permit for water use has not been issued by the time an amendment is approved under this section shall not be construed as being impaired by the amendment. Sec. 3. RCW 90.44.030 and 1945 c 263 s 2 are each amended to read as follows: (1) The rights to appropriate the surface waters of the state and the rights acquired by the appropriation and use of surface waters shall not be affected or impaired by any of the provisions of this supplementary chapter and, to the extent that any underground water is part of or tributary to the source of any surface stream or lake, or that the withdrawal of ground water may affect the flow of any spring, water course, lake, or other body of surface water, the right of an appropriation and owner of surface water shall be superior to any subsequent right hereby authorized to be acquired in or to ground water. (2) Rights acquired by appropriation of surface waters are affected or impaired by a ground water withdrawal from a confined aquifer only if: (a) Withdrawal of ground water causes a measurable head reduction within fifty feet of the surface water body in question in the shallowest unconfined water table aquifer that underlies that surface water body; or (b) Withdrawal of ground water will cause a measurable reduction in the flow or level of the surface water body. (3) If any of the conditions in subsection (2) of this section occur, then withdrawal of ground water affects or impairs existing surface water rights, including instream flow appropriations adopted by regulation, that are not being satisfied during the period of the occurrence. NEW SECTION. Sec. 4. A new section is added to chapter 90.44 RCW to read as follows: In addition to RCW 90.44.030(1), rights acquired by appropriation of surface waters are affected or impaired by a ground water withdrawal from an unconfined aquifer only if after no more than six months pumping, the surface water will lie within the cone of depression of a well tapping an unconfined aquifer. Sec. 5. RCW 90.44.035 and 1987 c 109 s 107 are each amended to read as follows: For purposes of this chapter: (1) "Department" means the department of ecology; (2) "Director" means the director of ecology; (3) "Ground waters" means all waters that exist beneath the land surface or beneath the bed of any stream, lake or reservoir, or other body of surface water within the boundaries of this state, whatever may be the geological formation or structure in which such water stands or flows, percolates or otherwise moves. There is a recognized distinction between natural ground water and artificially stored ground water; (4) "Natural ground water" means water that exists in underground storage owing wholly to natural processes; ((and)) (5) "Artificially stored ground water" means water that is made available in underground storage artificially, either intentionally, or incidentally to irrigation and that otherwise would have been dissipated by natural waste; (6) "Confined aquifer" means an aquifer in which ground water is under sufficient hydrostatic head to rise above the bottom of the overlying confining bed; (7) "Confining bed" means a layer of low permeability material immediately overlying a confined aquifer; and (8) "Measurable" means capable of being measured in the field with the use of equipment normally used by professionals for the measurement in question. Sec. 6. RCW 90.44.070 and 1987 c 109 s 110 are each amended to read as follows: (1) No permit shall be granted for the development or withdrawal of public ground waters beyond the capacity of the underground bed or formation in the given basin, district, or locality to yield such water within a reasonable or feasible pumping lift in case of pumping developments, or within a reasonable or feasible reduction of pressure in the case of artesian developments. The department shall have the power to determine whether the granting of any such permit will injure or damage any vested or existing right or rights under prior permits and may in addition to the records of the department, require further evidence, proof, and testimony before granting or denying any such permits. (2) No permit for the development or withdrawal of public ground waters from a confined aquifer may be denied or conditioned due to injury to, impairment of, or conflict with an existing surface water right unless the ground water withdrawal in question will impair the surface water right pursuant to RCW 90.44.030(2): PROVIDED, That this section does not affect the ability of the department to limit or restrict future ground water appropriations by adopting rules after following the procedures of RCW 90.44.180 or 90.44.400 through 90.44.420 or chapter 90.54 RCW. (3) The department may grant a ground water permit for a withdrawal that will impair a surface water right if the applicant has proposed a satisfactory plan for mitigating the impairment. Mitigation may include, but is not limited to: Reduction in pumping rates, limitation of pumping to times that will not lead to impairment, increased recharge of the ground water, and augmentation of stream flows either through release of stored water or the import of water from out of the basin. NEW SECTION. Sec. 7. A new section is added to chapter 90.03 RCW to read as follows: (1) The existence of hydraulic continuity between ground water and a surface body of water does not, in itself, constitute the impairment of an existing water right in the surface water body by a proposed permit for a ground water right or an amendment to a ground water right. (2) In making a determination as to whether an application to appropriate public water will impair existing rights the department shall take into consideration: (a) The availability of water and the effect of granting a water right permit, transfer, change, or amendment are those that exist with the incorporation of the effects of any offset to be provided by the applicant under RCW 90.03.255 or 90.44.055 or any other water supply augmentation or mitigation to be provided by the applicant as part of his or her application for a water right permit, transfer, change, or amendment; (b) Seasonal variations in water supply and in the recharge of surface and ground water bodies; and (c) The provisions of RCW 90.44.030. (3) The standards governing impairment of existing surface water rights by applications to appropriate public ground water in RCW 90.44.030(2), this subsection, and RCW 90.44.070(2) apply only to the determinations to be made by the department in ruling upon such applications, and reflect the uncertainties inherent in making tentative determinations regarding future impacts of withdrawing ground water. Any person claiming that a senior water right is injured by one or more junior water rights may file an action to enjoin the junior water rights in the superior court of the county where the claimed senior water right is located. The superior court shall hear such action de novo, and if it finds by a preponderance of the evidence that one or more junior water rights is causing or contributing to the injury of a senior water right, the court may enjoin use of the junior water rights in reverse order of priority in the manner it deems necessary to protect the senior water right. This section does not apply where the claimed senior water right consists of a minimum flow or level or the closure of a surface water body. NEW SECTION. Sec. 8. Any person whose application to appropriate public ground water was denied by the department of ecology between November 1, 1995, and the effective date of this section, when one of the grounds for denial was that the proposed ground water withdrawal would impair, or conflict with, surface water closures or surface water rights including minimum flows, may have his or her application reconsidered in accordance with this section. Any such person desiring reconsideration shall resubmit his or her application to the department of ecology within thirty days of the effective date of this section. The department of ecology shall accord any such resubmitted application its original priority date and shall reconsider the application on a priority basis, applying the standards of this act. The decision of the department of ecology may be appealed in the manner provided by law for appeals of decisions on applications to appropriate public water." Debate ensued.

POINT OF INQUIRY

Senator Loveland: “Senator Morton, I was listening intently to your explanation and one part that I didn't get--the details that I need before I take my vote. You said that this would help the Department of Ecology make determinations, but you didn't say how it is going to help them. Could you tell me what is in here that changes? I understand the big question, but inside the striker, what is going to help them, in your opinion, that they don't have now? Is it specifically defining--the continuity issue or what?”

Senator Morton: “Thank you, a good question, Senator Loveland. I am not sure I can answer it totally to your satisfaction. Yes, there is a definition which we would have to look up in code that Ecology has looked at and said, 'Yes, this would be helpful.' The overall approach to the bill from the Department of Ecology is that we are neutral. We'll go along with the bill; we think that we are okay. We have worked on it with them. I had another thought and it escaped me now, that I was going to comment on--in relationship to your question. It helps them to be able to more closely identify the differences between the two hydrological approaches and says to them that they must lift up both approaches on it and then it goes on to the hearing board and/or superior court.”

Further debate ensued.

POINT OF INQUIRY

Senator Heavey: “Senator Morton, in South King County, we're not being able to effectuate group management because significant amounts of water, drilling a well specifically, are not being going ahead with, because of the one molecule theory. The theory being , the applicant for the well, usually a public water district, must prove that it does not take one molecule out of the Green River. Does this bill help that situation?”

Senator Morton: “Mr. President, if I may briefly read--Senator Heavey, in our yellow work sheet, there are listed and, Senator Loveland, I did a little homework since your last question. You might refer to the list of six processes to go through--there had been three--that are to be adhered to by the department in determining what Senator Heavey has asked in his question. This bill adds three more of which one of them is explained by saying, 'the existence of hydraulic continuity between ground and surface water does not, in itself, constitute impairment,' and I believe that addresses directly your question that they must prove that, in itself, it does directly or does not. Up to this point, they have followed only the top three questions to be answered--not the new three that we have added to the bill.”

Senator Heavey: “One more question, the applicant has had the burden of proof of showing when there is not one molecule less in the Green River. Does this affect the burden of proof or, at least, get it to a neutral burden of proof?”

Senator Morton: “Yes, this gives--I think your term, maybe--neutral burden of proof--is correct. It places the burden of proof on both. There are those who want to go the other way from what it has been and that the burden of proof is totally on the department, but this leaves it at both levels.”

Further debate ensued.

POINT OF INQUIRY

Senator Spanel: “Senator Morton, is the liability of impairment changed from DOE to the individual who gets the permit?”

Senator Morton: “I don't believe so.”

Senator Spanel: “So, DOE would still be liable?”

Senator Morton: “I believe that is correct.”

Senator Spanel: “Thank you.”

The President declared the question before the Senate to be the adoption of the striking amendment by Senator Morton to Engrossed Substitute House Bill No. 2050.

The motion by Senator Morton carried and the striking amendment was adopted.

MOTIONS

On motion of Senator Morton, the following title amendment was adopted:

On page 1, line 2 of the title, after "uses;" strike the remainder of the title and insert "amending RCW 90.03.380, 90.44.100, 90.44.030, 90.44.035, and 90.44.070; adding a new section to chapter 90.44 RCW; adding a new section to chapter 90.03 RCW; and creating a new section." On motion of Senator Morton, the rules were suspended, Engrossed Substitute House Bill No. 2050, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 2050, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2050, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 31; Nays, 16; Absent, 2; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Deccio, Finkbeiner, Goings, Hale, Hargrove, Heavey, Hochstatter, Horn, Johnson, Long, Loveland, McCaslin, McDonald, Morton, Newhouse, Oke, Rasmussen, Roach, Rossi, Schow, Snyder, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 31. Voting nay: Senators Brown, Fairley, Franklin, Fraser, Haugen, Jacobsen, Kline, Kohl, McAuliffe, Patterson, Prentice, Sheldon, Spanel, Swanson, Thibaudeau and Wojahn - 16. Absent: Senators Prince and Sellar - 2. ENGROSSED SUBSTITUTE HOUSE BILL NO. 2050, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2018, by House Committee on Health Care (originally sponsored by Representatives Dyer, Grant, Backlund, Quall, Zellinsky, Sheldon, Sherstad, Morris, Parlette, Scott and Skinner)

Enacting health insurance reform.

The bill was read the second time.

MOTION

Senator Deccio moved that the following Committee on Health and Long-Term Care amendment be adopted:

Strike everything after the enacting clause and insert the following:"HEALTH INSURANCE REFORMTABLE OF CONTENTSPART I--CONSUMER PROTECTIONSUTILIZATION REVIEW--INTENTUTILIZATION REVIEW--DEFINITIONSUTILIZATION REVIEW--REVIEW ORGANIZATIONUTILIZATION REVIEW--STANDARDSUTILIZATION REVIEW--LIMITED RECORD ACCESSGRIEVANCE PROCEDURES--INTENTGRIEVANCE PROCEDURES--STANDARDSGRIEVANCE PROCEDURE FOR HEALTH CARE PROVIDERSGRIEVANCE PROCEDURES--REPEALERNETWORK ADEQUACY--INTENTNETWORK ADEQUACY--STUDY AND RESTRICTIONACCESS PLAN REQUIREMENTSMEDICAL ASSISTANCE WAIVERSPART II--MARKETPLACE STABILITYLEGISLATIVE INTENTDEFINITIONSPREEXISTING CONDITION LIMITATIONS MODIFIEDGUARANTEED ISSUE AND CONTINUITY OF COVERAGE MODIFIEDTENURE DISCOUNTS--INDIVIDUAL DISABILITY COVERAGETENURE DISCOUNTS--HEALTH CARE SERVICE CONTRACTORSTENURE DISCOUNTS--HEALTH MAINTENANCE ORGANIZATIONSHEALTH INSURANCE POOL--DEFINITIONSHEALTH INSURANCE POOL--BOARD POWERS MODIFIEDHEALTH INSURANCE POOL--ADMINISTRATOR'S POWER MODIFIEDHEALTH INSURANCE POOL--BENEFITS MODIFIEDHEALTH INSURANCE POOL--RATE MODIFIEDHEALTH INSURANCE POOL--SUBSTANTIAL EQUIVALENT CLARIFIEDLOSS RATIOS--HEALTH CARE SERVICE CONTRACTORSLOSS RATIOS--HEALTH MAINTENANCE ORGANIZATIONSLOSS RATIOS--GROUPS' DISABILITY COVERAGELOSS RATIOS--INDIVIDUAL DISABILITY COVERAGELOSS RATIOS--DISABILITY COVERAGE EXEMPTIONSLOSS RATIOS--DISABILITY COVERAGE DEFINITIONSPART III--BENEFITS AND SERVICE DELIVERYEMERGENCY MEDICAL SERVICESPART IV--MISCELLANEOUSWICKLINE CLAUSE STUDYCOMMON TITLESEVERABILITY CLAUSEEFFECTIVE DATESPART I--CONSUMER PROTECTIONS

(10) A health carrier shall establish written procedures for the expedited review of a grievance involving a situation where the time to resolve a grievance according to the procedures set forth in this section would seriously jeopardize the life or health of a covered person. A request for an expedited review may be submitted orally or in writing by a covered person or authorized representative of the covered person. A health carrier's procedures for establishing an expedited review process shall include the following: (a) The health carrier shall appoint an appropriate health care professional to participate in expedited reviews and shall provide reasonable access to board-certified specialty providers as typically manage the issue under review. (b) A health carrier shall provide expedited review to all requests concerning an admission, availability of care, continued stay, or review of a health care service for a covered person who has received emergency services but has not been discharged from a facility. (c) All necessary information, including the health carrier's decision, shall be transmitted between the health carrier and the covered person or authorized representative of the covered person by telephone, facsimile, or the most expeditious method available as determined by the health carrier. (d) A health carrier shall make a decision and notify the covered person or authorized representative of the covered person as expeditiously as the medical condition of the covered person requires, but no more than two business days after the request for expedited review is received by the health carrier. If the expedited review is a concurrent review determination, the service shall be continued without liability to the covered person until the covered person or authorized representative of the covered person has been notified of the decision by the health carrier. (e) A health carrier shall provide written confirmation of its decision concerning an expedited review within two working days of providing notification of that decision to the enrollee, if the initial notification was not in writing. The written notification shall contain the provisions required in subsection (3) of this section pertaining to a first level grievance review. (f) In any case where the expedited review process does not resolve a difference of opinion between a health carrier and the covered person, the covered person or authorized representative of the covered person may request a second level grievance review. In conducting the second level grievance review, the health carrier shall adhere to time frames that are reasonable under the circumstances, but in no event to exceed the time frames specified in subsection (4) of this section pertaining to second level grievance review. (11) The Washington state health care authority shall periodically examine grievance procedure accreditation standards of the national committee for quality assurance or other national accreditation organizations for appropriateness and, if deemed appropriate, shall adopt rules exempting a health carrier from the requirements of this section if certified by a national accreditation organization approved by the authority. The powers of the Washington state health care authority set forth in this section are transferred to the office of the insurance commissioner on January 1, 2001. Sec. 108. RCW 48.43.055 and 1995 c 265 s 20 are each amended to read as follows: GRIEVANCE PROCEDURE FOR HEALTH CARE PROVIDERS. Each health carrier as defined under RCW 48.43.005 shall file with the commissioner its procedures for review and adjudication of complaints initiated by ((covered persons or)) a health care provider((s)). Procedures filed under this section shall provide a fair review for consideration of complaints. Every health carrier shall provide reasonable means whereby ((any person)) a health care provider aggrieved by actions of the health carrier may be heard in person or by their authorized representative on their written request for review. If the health carrier fails to grant or reject such request within thirty days after it is made, the complaining ((person)) provider may proceed as if the complaint had been rejected. A complaint that has been rejected by the health carrier may be submitted to nonbinding mediation. Mediation shall be conducted pursuant to mediation rules similar to those of the American arbitration association, the center for public resources, the judicial arbitration and mediation service, RCW 7.70.100, or any other rules of mediation agreed to by the parties. NEW SECTION. Sec. 109. GRIEVANCE PROCEDURES--REPEALER. RCW 48.46.100 and 1975 1st ex.s. c 290 s 11 are each repealed. NEW SECTION. Sec. 110. NETWORK ADEQUACY--INTENT. The legislature declares that it is in the public interest that health carriers utilizing provider networks use reasonable means of assessing that their provider networks are adequate to provide covered services to their enrollees. The legislature finds that empirical assessment of provider network adequacy is in developmental stages, and that rigid, formulaic approaches are unworkable and inhibit innovation and approaches tailored to meet the needs of varying communities and populations. The legislature therefore finds that, given these limitations, an assessment is needed to determine whether network adequacy requirements are needed and, if necessary, whether the type of measures used by current accreditation programs, such as the national committee on quality assurance, meets these needs. NEW SECTION. Sec. 111. NETWORK ADEQUACY--STUDY AND RESTRICTION. (1) The department of health, in consultation with the office of the insurance commissioner, the department of social and health services, the health care authority, the health care policy board, consumers, providers, and health carriers, shall review the need for network adequacy requirements. The review must include an evaluation of the approaches used by the national committee on quality assurance and any similar, nationally recognized accreditation programs. The department shall submit its report and recommendations to the health care committees of the legislature by January 1, 1998, and include recommendations on: (a) Whether legislatively determined network adequacy requirements are necessary and advisable and the evidence to support this; (b) If standards are needed, to what extent such standards can be made consistent with the national committee on quality assurance standards, and whether national committee on quality assurance accredited carriers, or carriers accredited by other, nationally recognized accreditation programs, should be exempted from state review and requirements; (c) Whether and how the state could promote uniformity of approach across commercial purchaser requirements and state and federal agency requirements so as to assure adequate consumer access while promoting the most efficient use of public and private health care financial resources; (d) Means to assure that health carriers and health systems maintain the flexibility necessary to responsibly determine the best ways to meet the needs of the populations they serve while controlling the costs of the health care services provided; (e) Which types of health systems and health carriers should be subject to network adequacy requirements, if any; and (f) An objective estimate of the potential costs of such requirements and any recommended oversight functions. (2) No agency may engage in rule making relating to network adequacy until the legislature has reviewed the findings and recommendations of the study and has passed legislation authorizing the department of health or other appropriate agency to engage in rule making in this area in accordance with the policy direction set by the legislature. NEW SECTION. Sec. 112. A new section is added to chapter 41.05 RCW to read as follows: ACCESS PLAN REQUIREMENTS. (1) Beginning July 1, 1997, health carriers, as defined in RCW 48.43.005, shall develop and update annually an access plan that meets the requirements of this section for each of the health care networks that the carrier offers in this state. The health carrier shall make the access plans available on its business premises and shall provide nonproprietary information to any interested party upon request. The carrier shall prepare an access plan prior to offering a health plan utilizing a substantially different health care network. The plan shall include, at least, the following: (a) The health carrier's network of providers and facilities by license, certification and registration type, and by geographic location; (b) The health carrier's process for monitoring and assuring on an ongoing basis the sufficiency of the provider network to meet the covered health care needs of its enrolled populations; and (c) The health carrier's methods for assessing the health care needs of covered persons and their satisfaction with services. (2) On or before August 1, 1997, each health carrier shall submit its access plan or plans to the Washington state health care authority for purposes of assisting the authority with its report and recommendations on network adequacy standards required under section 111 of this act. (3) The Washington state health care authority shall periodically examine accreditation standards of the national committee for quality assurance or other national accreditation organizations for appropriateness and, if deemed appropriate, shall adopt rules exempting a health carrier from the requirements of this section if certified by a national accreditation organization approved by the authority. The powers of the Washington state health care authority set forth in this section are transferred to the office of the insurance commissioner on January 1, 2001. NEW SECTION. Sec. 113. A new section is added to chapter 74.09 RCW to read as follows: MEDICAL ASSISTANCE WAIVERS. To the extent that federal statutes or regulations, or provisions of waivers granted to the department of social and health services by the federal department of health and human services, include standards that differ from the minimums stated in sections 101 through 107, 110, and 112 of this act, those sections do not apply to contracts with health carriers awarded pursuant to RCW 74.09.522.

PART II--MARKETPLACE STABILITY

Sec. 202. RCW 48.43.005 and 1995 c 265 s 4 are each amended to read as follows:

DEFINITIONS. Unless otherwise specifically provided, the definitions in this section apply throughout this chapter. (1) "Adjusted community rate" means the rating method used to establish the premium for health plans adjusted to reflect actuarially demonstrated differences in utilization or cost attributable to geographic region, age, family size, and use of wellness activities. (2) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time. (3) "Basic health plan model plan" means a health plan as required in RCW 70.47.060(2)(d). (4) "Concurrent review" means utilization review conducted during a patient's hospital stay or course of treatment. (5) "Covered person" or "enrollee" means a person covered by a health plan including an enrollee, subscriber, policyholder, beneficiary of a group plan, or individual covered by any other health plan. (((3))) (6) "Dependent" means, at a minimum, the enrollee's legal spouse and unmarried dependent children who qualify for coverage under the enrollee's health benefit plan. (7) "Eligible employee" means an employee who works on a full-time basis with a normal work week of thirty or more hours. The term includes a self-employed individual, including a sole proprietor, a partner of a partnership, and may include an independent contractor, if the self-employed individual, sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer, but does not work less than thirty hours per week and derives at least seventy-five percent of his or her income from a trade or business through which he or she has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form. Persons covered under a health benefit plan pursuant to the consolidated omnibus budget reconciliation act of 1986 shall not be considered eligible employees for purposes of minimum participation requirements of chapter 265, Laws of 1995. (((4))) (8) "Emergency medical condition" means the emergent and acute onset of a symptom or symptoms, including severe pain, that would lead a prudent layperson acting reasonably to believe that a health condition exists that requires immediate medical attention, if failure to provide medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy. (9) "Emergency services" means otherwise covered health care services medically necessary to evaluate and treat an emergency medical condition, provided in a hospital emergency department. (10) "Enrollee point-of-service cost-sharing" means amounts paid to health carriers directly providing services, health care providers, or health care facilities by enrollees and may include copayments, coinsurance, or deductibles. (((5))) (11) "Grievance" means a written complaint submitted by or on behalf of a covered person regarding: (a) Denial of payment for medical services or nonprovision of medical services included in the covered person's health benefit plan, or (b) service delivery issues other than denial of payment for medical services or nonprovision of medical services, including dissatisfaction with medical care, waiting time for medical services, provider or staff attitude or demeanor, or dissatisfaction with service provided by the health carrier. (12) "Health care facility" or "facility" means hospices licensed under chapter 70.127 RCW, hospitals licensed under chapter 70.41 RCW, rural health care facilities as defined in RCW 70.175.020, psychiatric hospitals licensed under chapter 71.12 RCW, nursing homes licensed under chapter 18.51 RCW, community mental health centers licensed under chapter 71.05 or 71.24 RCW, kidney disease treatment centers licensed under chapter 70.41 RCW, ambulatory diagnostic, treatment, or surgical facilities licensed under chapter 70.41 RCW, drug and alcohol treatment facilities licensed under chapter 70.96A RCW, and home health agencies licensed under chapter 70.127 RCW, and includes such facilities if owned and operated by a political subdivision or instrumentality of the state and such other facilities as required by federal law and implementing regulations. (((6))) (13) "Health care provider" or "provider" means: (a) A person regulated under Title 18 or chapter 70.127 RCW, to practice health or health-related services or otherwise practicing health care services in this state consistent with state law; or (b) An employee or agent of a person described in (a) of this subsection, acting in the course and scope of his or her employment. (((7))) (14) "Health care service" means that service offered or provided by health care facilities and health care providers relating to the prevention, cure, or treatment of illness, injury, or disease. (((8))) (15) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020. (((9))) (16) "Health plan" or "health benefit plan" means any policy, contract, or agreement offered by a health carrier to provide, arrange, reimburse, or pay for health care services except the following: (a) Long-term care insurance governed by chapter 48.84 RCW; (b) Medicare supplemental health insurance governed by chapter 48.66 RCW; (c) Limited health care services offered by limited health care service contractors in accordance with RCW 48.44.035; (d) Disability income; (e) Coverage incidental to a property/casualty liability insurance policy such as automobile personal injury protection coverage and homeowner guest medical; (f) Workers' compensation coverage; (g) Accident only coverage; (h) Specified disease and hospital confinement indemnity when marketed solely as a supplement to a health plan; (i) Employer-sponsored self-funded health plans; and (j) Dental only and vision only coverage. (((10))) (17) "Basic health plan services" means that schedule of covered health services, including the description of how those benefits are to be administered, that are required to be delivered to an enrollee under the basic health plan, as revised from time to time. (((11))) (18) "Preexisting condition" means any medical condition, illness, or injury that existed any time prior to the effective date of coverage. (((12))) (19) "Premium" means all sums charged, received, or deposited by a health carrier as consideration for a health plan or the continuance of a health plan. Any assessment or any "membership," "policy," "contract," "service," or similar fee or charge made by a health carrier in consideration for a health plan is deemed part of the premium. "Premium" shall not include amounts paid as enrollee point-of-service cost-sharing. (((13))) (20) "Small employer" means any person, firm, corporation, partnership, association, political subdivision except school districts, or self-employed individual that is actively engaged in business that, on at least fifty percent of its working days during the preceding calendar quarter, employed no more than fifty eligible employees, with a normal work week of thirty or more hours, the majority of whom were employed within this state, and is not formed primarily for purposes of buying health insurance and in which a bona fide employer-employee relationship exists. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer. Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition. The term "small employer" includes a self-employed individual or sole proprietor. The term "small employer" also includes a self-employed individual or sole proprietor who derives at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year. (((14))) (21) "Wellness activity" means an explicit program of an activity consistent with department of health guidelines, such as, smoking cessation, injury and accident prevention, reduction of alcohol misuse, appropriate weight reduction, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education for the purpose of improving enrollee health status and reducing health service costs. (((15) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time.)) Sec. 203. RCW 48.43.025 and 1995 c 265 s 6 are each amended to read as follows: PREEXISTING CONDITION LIMITATIONS MODIFIED. (1) Except as otherwise specified in RCW 48.43.035: (a) No carrier may reject an individual for health plan coverage based upon preexisting conditions of the individual ((and)). (b) No carrier may deny, exclude, or otherwise limit coverage for an individual's preexisting health conditions; except that a carrier may impose a three-month benefit waiting period for preexisting conditions for which medical advice was given, or for which a health care provider recommended or provided treatment within three months before the effective date of coverage. (c) All health carriers offering any individual health plan to any individual must allow open enrollment to eligible applicants into all individual health plans offered by the carrier during the full month of July of each year. The individual health plans exempt from guaranteed continuity under RCW 48.43.035(4) are exempt from this requirement. All applications for open enrollment coverage must be complete and postmarked to or received by the carrier in the month of July in any year following the effective date of this section. Coverage for these applicants must begin the first day of the next month subject to receipt of timely payment consistent with the terms of the policies. (d) Carriers may limit acceptance of applicants who apply outside of the open enrollment period specified in (c) of this subsection provided all of the following conditions are met: (i) The applicant has not maintained coverage as required in (f) of this subsection; (ii) The applicant is not applying as a newly eligible dependent meeting the requirements of (g) of this subsection; and (iii) The carrier uses uniform health evaluation criteria and practices among all individual health plans it offers. (e) If a carrier refuses to enroll an applicant, it must offer to enroll the applicant in the Washington state health insurance pool in an expeditious manner as determined by the board of directors of the pool. Declination by the applicant to enroll must be done in written form. (f) Carriers may not refuse enrollment based upon health evaluation criteria to otherwise eligible applicants who have been covered either continuously or for any part of the three-month period immediately preceding the date of application for the new individual health plan under a comparable group or individual health benefit plan with substantially similar benefits. For purposes of this subsection, in addition to provisions in RCW 48.43.015, the following publicly administered coverage shall be considered comparable health benefit plans: The basic health plan established by chapter 70.47 RCW; the medical assistance program established by chapter 74.09 RCW; and the Washington state health insurance pool, established by chapter 48.41 RCW, as long as the person is continuously enrolled in the pool until the next open enrollment period. If the person is enrolled in the pool for less than three months, she or he will be credited for that period up to three months. (g) Carriers shall accept for enrollment all newly eligible dependents of an enrollee for enrollment onto the enrollee's individual health plan at any time of the year, provided application is made within sixty-three days of eligibility, or such longer time as provided by law or contract. (h)(i) Except as provided in (h)(iii) of this subsection, no health carrier shall be required to accept for enrollment under this section any individual who would cause the carrier to have, in any one calendar year, a total number of individuals newly enrolled under this section that exceeds one and one-half percent of the average number of individuals enrolled by the carrier in all of their individual market plans during January of that calendar year. (ii) When a health carrier has met the enrollment limit set forth in (h)(i) of this subsection, an officer of the carrier shall so certify in writing to the commissioner. Such certification shall be accompanied by supporting data and shall be provided to the commissioner by overnight delivery. Upon providing such certification, the carrier shall be relieved of its open enrollment requirement under this section for the remainder of the calendar year, except as provided in (h)(iii) of this subsection. (iii) If, in any one calendar year, all health carriers subject to this section are found by the commissioner to have met the enrollment limit set forth in (h)(i) of this subsection, the commissioner may require the carriers to resume accepting individuals on an open enrollment basis for the remainder of the month of July. To the extent that there is any delay between the time that the last certification under (h)(ii) of this subsection is provided to the commissioner and the time that the commissioner notifies carriers to resume open enrollment, the commissioner may extend the open enrollment period or reopen the period for such time as is necessary to compensate for the delay. In no event shall the total period of open enrollment, including any extension or reopening, exceed thirty-one days. (i) At no time are carriers required to accept for enrollment any individual residing outside the state of Washington, except for qualifying dependents who reside outside the carrier service area. (j) For purposes of this section, "open enrollment" means the annual thirty-one day period during the month of July during which all health carriers offering individual health plan coverage must accept onto individual coverage any state resident within the carrier's service area regardless of health condition who submits an application in accordance with RCW 48.43.035(1). (2) No carrier may avoid the requirements of this section through the creation of a new rate classification or the modification of an existing rate classification. A new or changed rate classification will be deemed an attempt to avoid the provisions of this section if the new or changed classification would substantially discourage applications for coverage from individuals or groups who are higher than average health risks. ((These)) The provisions of this section apply only to individuals who are Washington residents. Sec. 204. RCW 48.43.035 and 1995 c 265 s 7 are each amended to read as follows: GUARANTEED ISSUE AND CONTINUITY OF COVERAGE MODIFIED. (1) Except as otherwise specified in RCW 48.43.025, all health carriers shall accept for enrollment any state resident within the carrier's service area and provide or assure the provision of all covered services regardless of age, sex, family structure, ethnicity, race, health condition, geographic location, employment status, socioeconomic status, other condition or situation, or the provisions of RCW 49.60.174(2). The insurance commissioner may grant a temporary exemption from this subsection, if, upon application by a health carrier the commissioner finds that the clinical, financial, or administrative capacity to serve existing enrollees will be impaired if a health carrier is required to continue enrollment of additional eligible individuals. (2) Except as provided in subsection (((5))) (7) of this section, all health plans shall contain or incorporate by endorsement a guarantee of the continuity of coverage of the plan. For the purposes of this section, a plan is "renewed" when it is continued beyond the earliest date upon which, at the carrier's sole option, the plan could have been terminated for other than nonpayment of premium. In the case of group plans, the carrier may consider the group's anniversary date as the renewal date for purposes of complying with the provisions of this section. (3) The guarantee of continuity of coverage required in health plans shall not prevent a carrier from canceling or nonrenewing a health plan for: (a) Nonpayment of premium; (b) Violation of published policies of the carrier approved by the insurance commissioner; (c) Covered persons entitled to become eligible for medicare benefits by reason of age who fail to apply for a medicare supplement plan or medicare cost, risk, or other plan offered by the carrier pursuant to federal laws and regulations; (d) Covered persons who fail to pay any deductible or copayment amount owed to the carrier and not the provider of health care services; (e) Covered persons committing fraudulent acts as to the carrier; (f) Covered persons who materially breach the health plan; ((or)) (g) Change or implementation of federal or state laws that no longer permit the continued offering of such coverage; or (h) Cessation of a plan offering in accordance with subsection (5) or (8) of this section. (4) The provisions of this section do not apply in the following cases: (a) A carrier has zero enrollment on a product; ((or)) (b) ((A carrier replaces a product and the replacement product is provided to all covered persons within that class or line of business, includes all of the services covered under the replaced product, and does not significantly limit access to the kind of services covered under the replaced product. The health plan may also allow unrestricted conversion to a fully comparable product; or (c))) A carrier is withdrawing from a service area or from a segment of its service area because the carrier has demonstrated to the insurance commissioner that the carrier's clinical, financial, or administrative capacity to serve enrollees would be exceeded. (5) A health carrier may discontinue offering or materially modify a particular health plan, only if: (a) The health carrier provides notice to each covered person provided coverage of this type of such discontinuation or modification at least ninety days prior to the date of the discontinuation or modification of coverage; (b) The health carrier offers to each covered person provided coverage of this type the option to purchase any other health plan currently being offered by the health carrier to similar covered persons in the market category and geographic area; and (c) In exercising the option to discontinue or modify a particular health plan and in offering the option of coverage under (b) of this subsection, the health carrier acts uniformly without regard to any health-status related factor of covered persons or persons who may become eligible for coverage. (6) At the time a plan is renewed, a health carrier may modify the health plan coverage so long as such modification is in accordance with subsection (5) of this section. (7) The provisions of this section do not apply to health plans deemed by the insurance commissioner to be unique or limited or have a short-term purpose, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner. (8) A health carrier may discontinue all health plan coverage in one or more of the following lines of business: (a)(i) Individual; or (ii)(A) Small group (1-50 members); and (B) Large group (51+ members); (b) Only if: (i) The health carrier provides notice to the office of the insurance commissioner and to each person covered by a plan within the line of business of such discontinuation at least one hundred eighty days prior to the expiration of coverage; and (ii) All plans issued or delivered in the state by the health carrier in such line of business are discontinued, and coverage under such plans in such line of business is not renewed; and (iii) The health carrier may not issue any health plan coverage in the line of business and state involved during the five-year period beginning on the date of the discontinuation of the last health plan not so renewed. (9) The portability provisions of RCW 48.43.015 continue to apply to all enrollees whose health insurance coverage is modified or discontinued pursuant to this section. Sec. 205. RCW 70.47.060 and 1995 c 266 s 1 and 1995 c 2 s 4 are each reenacted and amended to read as follows: The administrator has the following powers and duties: (1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care. In addition, the administrator may offer as basic health plan services chemical dependency services, mental health services and organ transplant services; however, no one service or any combination of these three services shall increase the actuarial value of the basic health plan benefits by more than five percent excluding inflation, as determined by the office of financial management. All subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive (([covered basic health care services])) covered basic health care services in return for premium payments to the plan. The schedule of services shall emphasize proven preventive and primary health care and shall include all services necessary for prenatal, postnatal, and well-child care. However, with respect to coverage for groups of subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that such services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. The schedule of services shall also include a separate schedule of basic health care services for children, eighteen years of age and younger, for those subsidized or nonsubsidized enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services, the administrator shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080, and such other factors as the administrator deems appropriate. However, with respect to coverage for subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that the services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. (2)(a) To design and implement a structure of periodic premiums due the administrator from subsidized enrollees that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members. The enrollment of children shall not require the enrollment of their parent or parents who are eligible for the plan. The structure of periodic premiums shall be applied to subsidized enrollees entering the plan as individuals pursuant to subsection (9) of this section and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (10) of this section. (b) To determine the periodic premiums due the administrator from nonsubsidized enrollees. Premiums due from nonsubsidized enrollees shall be in an amount equal to the cost charged by the managed health care system provider to the state for the plan plus the administrative cost of providing the plan to those enrollees and the premium tax under RCW 48.14.0201. (c) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator, but in no case shall the payment made on behalf of the enrollee exceed the total premiums due from the enrollee. (d) To develop, as an offering by all health carriers providing coverage identical to the basic health plan, as configured on January 1, 1996, a basic health plan model plan ((benefits package)) with uniformity in enrollee cost-sharing requirements. (3) To design and implement a structure of enrollee cost sharing due a managed health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services. (4) To limit enrollment of persons who qualify for subsidies so as to prevent an overexpenditure of appropriations for such purposes. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists. (5) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020. The level of subsidy provided to persons who qualify may be based on the lowest cost plans, as defined by the administrator. (6) To adopt a schedule for the orderly development of the delivery of services and availability of the plan to residents of the state, subject to the limitations contained in RCW 70.47.080 or any act appropriating funds for the plan. (7) To solicit and accept applications from managed health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan. The administrator shall endeavor to assure that covered basic health care services are available to any enrollee of the plan from among a selection of two or more participating managed health care systems. In adopting any rules or procedures applicable to managed health care systems and in its dealings with such systems, the administrator shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several areas of the state. Contracts with participating managed health care systems shall ensure that basic health plan enrollees who become eligible for medical assistance may, at their option, continue to receive services from their existing providers within the managed health care system if such providers have entered into provider agreements with the department of social and health services. (8) To receive periodic premiums from or on behalf of subsidized and nonsubsidized enrollees, deposit them in the basic health plan operating account, keep records of enrollee status, and authorize periodic payments to managed health care systems on the basis of the number of enrollees participating in the respective managed health care systems. (9) To accept applications from individuals residing in areas served by the plan, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan as subsidized or nonsubsidized enrollees, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and on a reasonable schedule defined by the authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If, as a result of an eligibility review, the administrator determines that a subsidized enrollee's income exceeds twice the federal poverty level and that the enrollee knowingly failed to inform the plan of such increase in income, the administrator may bill the enrollee for the subsidy paid on the enrollee's behalf during the period of time that the enrollee's income exceeded twice the federal poverty level. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they will be allowed to reenroll in the plan. (10) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a managed health care system. The administrator may require that a business owner pay at least an amount equal to what the employee pays after the state pays its portion of the subsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a managed care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating managed health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes. (11) To determine the rate to be paid to each participating managed health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same for similar enrollees, the rates negotiated with participating managed health care systems may vary among the systems. In negotiating rates with participating systems, the administrator shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area, the need to conserve the resources of the basic health plan trust account, and other factors the administrator finds relevant. (12) To monitor the provision of covered services to enrollees by participating managed health care systems in order to assure enrollee access to good quality basic health care, to require periodic data reports concerning the utilization of health care services rendered to enrollees in order to provide adequate information for evaluation, and to inspect the books and records of participating managed health care systems to assure compliance with the purposes of this chapter. In requiring reports from participating managed health care systems, including data on services rendered enrollees, the administrator shall endeavor to minimize costs, both to the managed health care systems and to the plan. The administrator shall coordinate any such reporting requirements with other state agencies, such as the insurance commissioner and the department of health, to minimize duplication of effort. (13) To evaluate the effects this chapter has on private employer-based health care coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state. (14) To develop a program of proven preventive health measures and to integrate it into the plan wherever possible and consistent with this chapter. (15) To provide, consistent with available funding, assistance for rural residents, underserved populations, and persons of color. Sec. 206. RCW 48.20.028 and 1995 c 265 s 13 are each amended to read as follows: TENURE DISCOUNTS--INDIVIDUAL DISABILITY COVERAGE. (1)(a) An insurer offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan subject to RCW 48.43.035. Nothing in this subsection shall preclude an insurer from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. An insurer offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner. (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.20.390, 48.20.393, 48.20.395, 48.20.397, 48.20.410, 48.20.411, 48.20.412, 48.20.416, and 48.20.420 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan. (2) Premiums for health benefit plans for individuals shall be calculated using the adjusted community rating method that spreads financial risk across the carrier's entire individual product population. All such rates shall conform to the following: (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for: (i) Geographic area; (ii) Family size; (iii) Age; ((and)) (iv) Tenure discounts; and (v) Wellness activities. (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty. (c) The insurer shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection. (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter. (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent. (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect: (i) Changes to the family composition; (ii) Changes to the health benefit plan requested by the individual; or (iii) Changes in government requirements affecting the health benefit plan. (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015. (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent. (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.21.045. (4) As used in this section, "health benefit plan," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005. Sec. 207. RCW 48.44.022 and 1995 c 265 s 15 are each amended to read as follows: TENURE DISCOUNTS--HEALTH CARE SERVICE CONTRACTORS. (1)(a) A health care service contractor offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan, subject to the provisions in RCW 48.43.035. Nothing in this subsection shall preclude a contractor from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A contractor offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner. (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan. (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions: (a) The health care service contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for: (i) Geographic area; (ii) Family size; (iii) Age; ((and)) (iv) Tenure discounts; and (v) Wellness activities. (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty. (c) The health care service contractor shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection. (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter. (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent. (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect: (i) Changes to the family composition; (ii) Changes to the health benefit plan requested by the individual; or (iii) Changes in government requirements affecting the health benefit plan. (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015. (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent. (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.44.023. (4) As used in this section and RCW 48.44.023 "health benefit plan," "small employer," "basic health plan," "adjusted community rates," and "wellness activities" mean the same as defined in RCW 48.43.005. Sec. 208. RCW 48.46.064 and 1995 c 265 s 17 are each amended to read as follows: TENURE DISCOUNTS--HEALTH MAINTENANCE ORGANIZATIONS. (1)(a) A health maintenance organization offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan, subject to the provisions in RCW 48.43.035. Nothing in this subsection shall preclude a health maintenance organization from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A health maintenance organization offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner. (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, ((48.26.280 [48.46.280])) 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan. (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions: (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for: (i) Geographic area; (ii) Family size; (iii) Age; ((and)) (iv) Tenure discounts; and (v) Wellness activities. (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty. (c) The health maintenance organization shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection. (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter. (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent. (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect: (i) Changes to the family composition; (ii) Changes to the health benefit plan requested by the individual; or (iii) Changes in government requirements affecting the health benefit plan. (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015. (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent. (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.46.066. (4) As used in this section and RCW 48.46.066, "health benefit plan," "basic health plan," "adjusted community rate," "small employer," and "wellness activities" mean the same as defined in RCW 48.43.005. Sec. 209. RCW 48.41.030 and 1989 c 121 s 1 are each amended to read as follows: HEALTH INSURANCE POOL--DEFINITIONS. As used in this chapter, the following terms have the meaning indicated, unless the context requires otherwise: (1) "Accounting year" means a twelve-month period determined by the board for purposes of record-keeping and accounting. The first accounting year may be more or less than twelve months and, from time to time in subsequent years, the board may order an accounting year of other than twelve months as may be required for orderly management and accounting of the pool. (2) "Administrator" means the entity chosen by the board to administer the pool under RCW 48.41.080. (3) "Board" means the board of directors of the pool. (4) "Commissioner" means the insurance commissioner. (5) "Health care facility" has the same meaning as in RCW 70.38.025. (6) "Health care provider" means any physician, facility, or health care professional, who is licensed in Washington state and entitled to reimbursement for health care services. (7) "Health care services" means services for the purpose of preventing, alleviating, curing, or healing human illness or injury. (8) "Health ((insurance)) coverage" means any group or individual disability insurance policy, health care service contract, and health maintenance agreement, except those contracts entered into for the provision of health care services pursuant to Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395 et seq. The term does not include short-term care, long-term care, dental, vision, accident, fixed indemnity, disability income contracts, civilian health and medical program for the uniform services (CHAMPUS), 10 U.S.C. 55, limited benefit or credit insurance, coverage issued as a supplement to liability insurance, insurance arising out of the worker's compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (9) "Health plan" means any arrangement by which persons, including dependents or spouses, covered or making application to be covered under this pool, have access to hospital and medical benefits or reimbursement including any group or individual disability insurance policy; health care service contract; health maintenance agreement; uninsured arrangements of group or group-type contracts including employer self-insured, cost-plus, or other benefit methodologies not involving insurance or not governed by Title 48 RCW; coverage under group-type contracts which are not available to the general public and can be obtained only because of connection with a particular organization or group; and coverage by medicare or other governmental benefits. This term includes coverage through "health ((insurance)) coverage" as defined under this section, and specifically excludes those types of programs excluded under the definition of "health ((insurance)) coverage" in subsection (8) of this section. (10) (("Insured" means any individual resident of this state who is eligible to receive benefits from any member, or other health plan. (11))) "Medical assistance" means coverage under Title XIX of the federal Social Security Act (42 U.S.C., Sec. 1396 et seq.) and chapter 74.09 RCW. (((12))) (11) "Medicare" means coverage under Title XVIII of the Social Security Act, (42 U.S.C. Sec. 1395 et seq., as amended). (((13))) (12) "Member" means any commercial insurer which provides disability insurance, any health care service contractor, and any health maintenance organization licensed under Title 48 RCW. "Member" shall also mean, as soon as authorized by federal law, employers and other entities, including a self-funding entity and employee welfare benefit plans that provide health plan benefits in this state on or after May 18, 1987. "Member" does not include any insurer, health care service contractor, or health maintenance organization whose products are exclusively dental products or those products excluded from the definition of "health ((insurance)) coverage" set forth in subsection (8) of this section. (13) "Network provider" means a health care provider who has contracted in writing with the pool administrator to accept payment from and to look solely to the pool according to the terms of the pool health plans. (14) "Plan of operation" means the pool, including articles, by-laws, and operating rules, adopted by the board pursuant to RCW 48.41.050. (15) "Point of service plan" means a benefit plan offered by the pool under which a covered person may elect to receive covered services from network providers, or nonnetwork providers at a reduced rate of benefits. (16) "Pool" means the Washington state health insurance pool as created in RCW 48.41.040. (((16))) (17) "Substantially equivalent health plan" means a "health plan" as defined in subsection (9) of this section which, in the judgment of the board or the administrator, offers persons including dependents or spouses covered or making application to be covered by this pool an overall level of benefits deemed approximately equivalent to the minimum benefits available under this pool. Sec. 210. RCW 48.41.060 and 1989 c 121 s 3 are each amended to read as follows: HEALTH INSURANCE POOL--BOARD POWERS MODIFIED. The board shall have the general powers and authority granted under the laws of this state to insurance companies, health care service contractors, and health maintenance organizations, licensed or registered to ((transact)) offer or provide the kinds of ((insurance)) health coverage defined under this title. In addition thereto, the board may: (1) Enter into contracts as are necessary or proper to carry out the provisions and purposes of this chapter including the authority, with the approval of the commissioner, to enter into contracts with similar pools of other states for the joint performance of common administrative functions, or with persons or other organizations for the performance of administrative functions; (2) Sue or be sued, including taking any legal action as necessary to avoid the payment of improper claims against the pool or the coverage provided by or through the pool; (3) Establish appropriate rates, rate schedules, rate adjustments, expense allowances, agent referral fees, claim reserve formulas and any other actuarial functions appropriate to the operation of the pool. Rates shall not be unreasonable in relation to the coverage provided, the risk experience, and expenses of providing the coverage. Rates and rate schedules may be adjusted for appropriate risk factors such as age and area variation in claim costs and shall take into consideration appropriate risk factors in accordance with established actuarial underwriting practices consistent with Washington state individual plan rating requirements under RCW 48.20.028, 48.44.022, and 48.46.064; (4) Assess members of the pool in accordance with the provisions of this chapter, and make advance interim assessments as may be reasonable and necessary for the organizational or interim operating expenses. Any interim assessments will be credited as offsets against any regular assessments due following the close of the year; (5) Issue policies of ((insurance)) health coverage in accordance with the requirements of this chapter; (6) Appoint appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the pool, policy, and other contract design, and any other function within the authority of the pool; and (7) Conduct periodic audits to assure the general accuracy of the financial data submitted to the pool, and the board shall cause the pool to have an annual audit of its operations by an independent certified public accountant. Sec. 211. RCW 48.41.080 and 1989 c 121 s 5 are each amended to read as follows: HEALTH INSURANCE POOL--ADMINISTRATOR'S POWER MODIFIED. The board shall select an administrator from the membership of the pool whether domiciled in this state or another state through a competitive bidding process to administer the pool. (1) The board shall evaluate bids based upon criteria established by the board, which shall include: (a) The administrator's proven ability to handle ((accident and health insurance)) health coverage; (b) The efficiency of the administrator's claim-paying procedures; (c) An estimate of the total charges for administering the plan; and (d) The administrator's ability to administer the pool in a cost-effective manner. (2) The administrator shall serve for a period of three years subject to removal for cause. At least six months prior to the expiration of each three-year period of service by the administrator, the board shall invite all interested parties, including the current administrator, to submit bids to serve as the administrator for the succeeding three-year period. Selection of the administrator for this succeeding period shall be made at least three months prior to the end of the current three-year period. (3) The administrator shall perform such duties as may be assigned by the board including: (a) All eligibility and administrative claim payment functions relating to the pool; (b) Establishing a premium billing procedure for collection of premiums from ((insured)) covered persons. Billings shall be made on a periodic basis as determined by the board, which shall not be more frequent than a monthly billing; (c) Performing all necessary functions to assure timely payment of benefits to covered persons under the pool including: (i) Making available information relating to the proper manner of submitting a claim for benefits to the pool, and distributing forms upon which submission shall be made; ((and)) (ii) Taking steps necessary to offer and administer managed care benefit plans; and (iii) Evaluating the eligibility of each claim for payment by the pool; (d) Submission of regular reports to the board regarding the operation of the pool. The frequency, content, and form of the report shall be as determined by the board; (e) Following the close of each accounting year, determination of net paid and earned premiums, the expense of administration, and the paid and incurred losses for the year and reporting this information to the board and the commissioner on a form as prescribed by the commissioner. (4) The administrator shall be paid as provided in the contract between the board and the administrator for its expenses incurred in the performance of its services. Sec. 212. RCW 48.41.110 and 1987 c 431 s 11 are each amended to read as follows: HEALTH INSURANCE POOL--BENEFITS MODIFIED. (1) The pool is authorized to offer one or more managed care plans of coverage. Such plans may, but are not required to, include point of service features that permit participants to receive in-network benefits or out-of-network benefits subject to differential cost shares. Covered persons enrolled in the pool on January 1, 1997, may continue coverage under the pool plan in which they are enrolled on that date. However, the pool may incorporate managed care features into such existing plans. (2) The administrator shall prepare a brochure outlining the benefits and exclusions of the pool policy in plain language. After approval by the board of directors, such brochure shall be made reasonably available to participants or potential participants. The health insurance policy issued by the pool shall pay only usual, customary, and reasonable charges for medically necessary eligible health care services rendered or furnished for the diagnosis or treatment of illnesses, injuries, and conditions which are not otherwise limited or excluded. Eligible expenses are the usual, customary, and reasonable charges for the health care services and items for which benefits are extended under the pool policy. Such benefits shall at minimum include, but not be limited to, the following services or related items: (a) Hospital services, including charges for the most common semiprivate room, for the most common private room if semiprivate rooms do not exist in the health care facility, or for the private room if medically necessary, but limited to a total of one hundred eighty inpatient days in a calendar year, and limited to thirty days inpatient care for mental and nervous conditions, or alcohol, drug, or chemical dependency or abuse per calendar year; (b) Professional services including surgery for the treatment of injuries, illnesses, or conditions, other than dental, which are rendered by a health care provider, or at the direction of a health care provider, by a staff of registered or licensed practical nurses, or other health care providers; (c) The first twenty outpatient professional visits for the diagnosis or treatment of one or more mental or nervous conditions or alcohol, drug, or chemical dependency or abuse rendered during a calendar year by one or more physicians, psychologists, or community mental health professionals, or, at the direction of a physician, by other qualified licensed health care practitioners, in the case of mental or nervous conditions, and rendered by a state certified chemical dependency program approved under chapter 70.96A RCW, in the case of alcohol, drug, or chemical dependency or abuse; (d) Drugs and contraceptive devices requiring a prescription; (e) Services of a skilled nursing facility, excluding custodial and convalescent care, for not more than one hundred days in a calendar year as prescribed by a physician; (f) Services of a home health agency; (g) Chemotherapy, radioisotope, radiation, and nuclear medicine therapy; (h) Oxygen; (i) Anesthesia services; (j) Prostheses, other than dental; (k) Durable medical equipment which has no personal use in the absence of the condition for which prescribed; (l) Diagnostic x-rays and laboratory tests; (m) Oral surgery limited to the following: Fractures of facial bones; excisions of mandibular joints, lesions of the mouth, lip, or tongue, tumors, or cysts excluding treatment for temporomandibular joints; incision of accessory sinuses, mouth salivary glands or ducts; dislocations of the jaw; plastic reconstruction or repair of traumatic injuries occurring while covered under the pool; and excision of impacted wisdom teeth; (n) Maternity care services, as provided in the managed care plan to be designed by the pool board of directors; (o) Services of a physical therapist and services of a speech therapist; (((o))) (p) Hospice services; (((p))) (q) Professional ambulance service to the nearest health care facility qualified to treat the illness or injury; and (((q))) (r) Other medical equipment, services, or supplies required by physician's orders and medically necessary and consistent with the diagnosis, treatment, and condition. (((2))) (3) The board shall design and employ cost containment measures and requirements such as, but not limited to, care coordination, provider network limitations, preadmission certification, and concurrent inpatient review which may make the pool more cost-effective. (((3))) (4) The pool benefit policy may contain benefit limitations, exceptions, and ((reductions)) cost shares such as copayments, coinsurance, and deductibles that are consistent with managed care products, except that differential cost shares may be adopted by the board for nonnetwork providers under point of service plans. The pool benefit policy cost shares and limitations must be consistent with those that are generally included in health ((insurance)) plans ((and are)) approved by the insurance commissioner; however, no limitation, exception, or reduction may be ((approved)) used that would exclude coverage for any disease, illness, or injury. (5) The pool may not reject an individual for health plan coverage based upon preexisting conditions of the individual or deny, exclude, or otherwise limit coverage for an individual's preexisting health conditions; except that it may impose a three-month benefit waiting period for preexisting conditions for which medical advice was given, or for which a health care provider recommended or provided treatment, within three months before the effective date of coverage. The pool may not avoid the requirements of this section through the creation of a new rate classification or the modification of an existing rate classification. Sec. 213. RCW 48.41.200 and 1987 c 431 s 20 are each amended to read as follows: HEALTH INSURANCE POOL--RATE MODIFIED. The pool shall determine the standard risk rate by calculating the average group standard rate for groups comprised of up to ((ten)) fifty persons charged by the five largest members offering coverages in the state comparable to the pool coverage. In the event five members do not offer comparable coverage, the standard risk rate shall be established using reasonable actuarial techniques and shall reflect anticipated experience and expenses for such coverage. Maximum rates for pool coverage shall be one hundred fifty percent for the indemnity health plan and one hundred twenty-five percent for managed care plans of the rates established as applicable for group standard risks in groups comprised of up to ((ten)) fifty persons((. All rates and rate schedules shall be submitted to the commissioner for approval)). Sec. 214. RCW 48.41.130 and 1987 c 431 s 13 are each amended to read as follows: HEALTH INSURANCE POOL--SUBSTANTIAL EQUIVALENT CLARIFIED. All policy forms issued by the pool shall conform in substance to prototype forms developed by the pool, and shall in all other respects conform to the requirements of this chapter, and shall be filed with and approved by the commissioner before they are issued. The pool shall not issue a pool policy to any individual who, on the effective date of the coverage applied for, already has or would have coverage substantially equivalent to a pool policy as an insured or covered dependent, or who would be eligible for such coverage if he or she elected to obtain it at a lesser premium rate. However, coverage provided by the basic health plan, as established pursuant to chapter 70.47 RCW, shall not be deemed substantially equivalent for the purposes of this section. NEW SECTION. Sec. 215. A new section is added to chapter 48.43 RCW to read as follows: All health carriers offering any health plan to any individual must offer at least one plan, in addition to the model basic health plan, that contains maternity coverage substantially equivalent to that offered under the basic health plan. NEW SECTION. Sec. 216. A new section is added to chapter 48.44 RCW to read as follows: LOSS RATIOS--HEALTH CARE SERVICE CONTRACTORS. (1) For purposes of RCW 48.44.020(2)(d), benefits in a contract shall be deemed reasonable in relation to the amount charged provided that the anticipated loss ratio is at least: (a) Sixty-five percent for individual subscriber contract forms; (b) Seventy percent for franchise plan contract forms; (c) Eighty percent for group contract forms other than small group contract forms; and (d) Seventy-five percent for small group contract forms. (2) With the approval of the commissioner, contract, rider, and endorsement forms that provide substantially similar coverage may be combined for the purpose of determining the anticipated loss ratio. (3) A health care service contractor may charge the rate for prepayment of health care services in any contract identified in RCW 48.44.020(1) upon filing of the rate with the commissioner. If the commissioner disapproves the rate, the commissioner shall explain in writing the specific reasons for the disapproval. A health care service contractor may continue to charge such rate pending a final order in any hearing held under chapters 48.04 and 34.05 RCW, or if applicable, pending a final order in any appeal. Any amount charged that is determined in a final order on appeal to be unreasonable in relation to the benefits provided is subject to refund. (4) For the purposes of this section: (a) "Anticipated loss ratio" means the ratio of all anticipated claims or costs for the delivery of covered health care services including incurred but not reported claims and costs and medical management costs to premium minus any applicable taxes. (b) "Small group contract form" means a form offered to a small employer as defined in RCW 48.43.005(13). NEW SECTION. Sec. 217. A new section is added to chapter 48.46 RCW to read as follows: LOSS RATIOS--HEALTH MAINTENANCE ORGANIZATIONS. (1) For purposes of RCW 48.46.060(3)(d), benefits shall be deemed reasonable in relation to the amount charged provided that the anticipated loss ratio is at least: (a) Sixty-five percent for individual subscriber contract forms; (b) Seventy percent for franchise plan contract forms; (c) Eighty percent for group contract forms other than small group contract forms; and (d) Seventy-five percent for small group contract forms. (2) With the approval of the commissioner, contract, rider, and endorsement forms that provide substantially similar coverage may be combined for the purpose of determining the anticipated loss ratio. (3) A health maintenance organization may charge the rate for prepayment of health care services in any contract identified in RCW 48.46.060(1) upon filing of the rate with the commissioner. If the commissioner disapproves the rate, the commissioner shall explain in writing the specific reasons for the disapproval. A health maintenance organization may continue to charge such rate pending a final order in any hearing held under chapters 48.04 and 34.05 RCW, or if applicable, pending a final order in any appeal. Any amount charged that is determined in a final order on appeal to be unreasonable in relation to the benefits provided is subject to refund. (4) For the purposes of this section: (a) "Anticipated loss ratio" means the ratio of all anticipated claims or costs for the delivery of covered health care services including incurred but not reported claims and costs and medical management costs to premium minus any applicable taxes. (b) "Small group contract form" means a form offered to a small employer as defined in RCW 48.43.005(13). NEW SECTION. Sec. 218. A new section is added to chapter 48.21 RCW to read as follows: LOSS RATIOS--GROUPS' DISABILITY COVERAGE. The following standards and requirements apply to group and blanket disability insurance policy forms and manual rates: (1) Specified disease group insurance shall generate at least a seventy-five percent loss ratio regardless of the size of the group. (2) Group disability insurance, other than specified disease insurance, as to which the insureds pay all or substantially all of the premium shall generate loss ratios no lower than those set forth in the following table.

Number of Certificate Holders Minimum Overallat Issue, Renewal, or Rerating Loss Ratio

9 or less 60% 10 to 24 65% 25 to 49 70% 50 to 99 75% 100 or more 80%

(3) Group disability policy forms, other than for specified disease insurance, for issue to single employers insuring less than one hundred lives shall generate loss ratios no lower than those set forth in subsection (2) of this section for groups of the same size. (4) The calculating period may vary with the benefit and premium provisions. The company may be required to demonstrate the reasonableness of the calculating period chosen by the actuary responsible for the premium calculations. (5) A request for a rate increase submitted at the end of the calculating period shall include a comparison of the actual to the expected loss ratios and shall employ any accumulation of reserves in the determination of rates for the selected calculating period and account for the maintenance of such reserves for future needs. The request for the rate increase shall be further documented by the expected loss ratio for the new calculating period. (6) A request for a rate increase submitted during the calculating period shall include a comparison of the actual to the expected loss ratios, a demonstration of any contributions to or support from the reserves, and shall account for the maintenance of such reserves for future needs. If the experience justifies a premium increase it shall be deemed that the calculating period has prematurely been brought to an end. The rate increase shall further be documented by the expected loss ratio for the next calculating period. (7) The commissioner may approve a series of two or three smaller rate increases in lieu of one larger increase. These should be calculated to reduce the lapses and antiselection that often result from large rate increases. A demonstration of such calculations, whether for a single rate increase or a series of smaller rate increases, satisfactory to the commissioner, shall be attached to the filing. (8) Companies shall review their experience periodically and file appropriate rate revisions in a timely manner to reduce the necessity of later filing of exceptionally large rate increases. (9) The definitions in section 221 of this act and the provisions in section 220 of this act apply to this section. NEW SECTION. Sec. 219. A new section is added to chapter 48.20 RCW to read as follows: LOSS RATIOS--INDIVIDUAL DISABILITY COVERAGE. The following standards and requirements apply to individual disability insurance forms: (1) The overall loss ratio shall be deemed reasonable in relation to the premiums if the overall loss ratio is at least sixty percent over a calculating period chosen by the insurer and satisfactory to the commissioner. (2) The calculating period may vary with the benefit and renewal provisions. The company may be required to demonstrate the reasonableness of the calculating period chosen by the actuary responsible for the premium calculations. A brief explanation of the selected calculating period shall accompany the filing. (3) Policy forms, the benefits of which are particularly exposed to the effects of inflation and whose premium income may be particularly vulnerable to an eroding persistency and other similar forces, shall use a relatively short calculating period reflecting the uncertainties of estimating the risks involved. Policy forms based on more dependable statistics may employ a longer calculating period. The calculating period may be the lifetime of the contract for guaranteed renewable and noncancellable policy forms if such forms provide benefits that are supported by reliable statistics and that are protected from inflationary or eroding forces by such factors as fixed dollar coverages, inside benefit limits, or the inherent nature of the benefits. The calculating period may be as short as one year for coverages that are based on statistics of minimal reliability or that are highly exposed to inflation. (4) A request for a rate increase to be effective at the end of the calculating period shall include a comparison of the actual to the expected loss ratios, shall employ any accumulation of reserves in the determination of rates for the new calculating period, and shall account for the maintenance of such reserves for future needs. The request for the rate increase shall be further documented by the expected loss ratio for the new calculating period. (5) A request for a rate increase submitted during the calculating period shall include a comparison of the actual to the expected loss ratios, a demonstration of any contributions to and support from the reserves, and shall account for the maintenance of such reserves for future needs. If the experience justifies a premium increase it shall be deemed that the calculating period has prematurely been brought to an end. The rate increase shall further be documented by the expected loss ratio for the next calculating period. (6) The commissioner may approve a series of two or three smaller rate increases in lieu of one large increase. These should be calculated to reduce lapses and anti-selection that often result from large rate increases. A demonstration of such calculations, whether for a single rate increase or for a series of smaller rate increases, satisfactory to the commissioner, shall be attached to the filing. (7) Companies shall review their experience periodically and file appropriate rate revisions in a timely manner to reduce the necessity of later filing of exceptionally large rate increases. NEW SECTION. Sec. 220. A new section is added to chapter 48.20 RCW to read as follows: LOSS RATIOS--DISABILITY COVERAGE EXEMPTIONS. Sections 218 and 219 of this act apply to all insurers and to every disability insurance policy form filed for approval in this state after the effective date of this section, except: (1) Additional indemnity and premium waiver forms for use only in conjunction with life insurance policies; (2) Medicare supplement policy forms that are regulated by chapter 48.66 RCW; (3) Credit insurance policy forms issued pursuant to chapter 48.34 RCW; (4) Group policy forms other than: (a) Specified disease policy forms; (b) Policy forms, other than loss of income forms, as to which all or substantially all of the premium is paid by the individuals insured thereunder; (c) Policy forms, other than loss of income forms, for issue to single employers insuring less than one hundred employees; (5) Policy forms filed by health care service contractors or health maintenance organizations; (6) Policy forms initially approved, including subsequent requests for rate increases and modifications of rate manuals. NEW SECTION. Sec. 221. A new section is added to chapter 48.20 RCW to read as follows: LOSS RATIOS--DISABILITY COVERAGE DEFINITIONS. (1) The "expected loss ratio" is a prospective calculation and shall be calculated as the projected "benefits incurred" divided by the projected "premiums earned" and shall be based on the actuary's best projections of the future experience within the "calculating period." (2) The "actual loss ratio" is a retrospective calculation and shall be calculated as the "benefits incurred" divided by the "premiums earned," both measured from the beginning of the "calculating period" to the date of the loss ratio calculations. (3) The "overall loss ratio" shall be calculated as the "benefits incurred" divided by the "premiums earned" over the entire "calculating period" and may involve both retrospective and prospective data. (4) The "calculating period" is the time span over which the actuary expects the premium rates, whether level or increasing, to remain adequate in accordance with his or her best estimate of future experience and during which the actuary does not expect to request a rate increase. (5) The "benefits incurred" is the "claims incurred" plus any increase, or less any decrease, in the "reserves." (6) The "claims incurred" means: (a) Claims paid during the accounting period; plus (b) The change in the liability for claims that have been reported but not paid; plus (c) The change in the liability for claims that have not been reported but which may reasonably be expected. The "claims incurred" does not include expenses incurred in processing the claims, home office or field overhead, acquisition and selling costs, taxes or other expenses, contributions to surplus, or profit. (7) The "reserves," as referred to in sections 218 and 219 of this act include: (a) Active life disability reserves; (b) Additional reserves whether for a specific liability purpose or not; (c) Contingency reserves; (d) Reserves for select morbidity experience; and (e) Increased reserves that may be required by the commissioner. (8) The "premiums earned" means the premiums, less experience credits, refunds, or dividends, applicable to an accounting period whether received before, during, or after such period. (9) Renewal provisions are defined as follows: (a) "Guaranteed renewable" means renewal cannot be declined by the insurance company for any reason, but the insurance company can revise rates on a class basis. (b) "Noncancellable" means renewal cannot be declined nor can rates be revised by the insurance company. PART III--BENEFITS AND SERVICE DELIVERY NEW SECTION. Sec. 301. A new section is added to chapter 48.43 RCW to read as follows: EMERGENCY MEDICAL SERVICES. (1) When conducting a review of the necessity and appropriateness of emergency services or making a benefit determination for emergency services: (a) A health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. In addition, a health carrier shall not require prior authorization of such services provided prior to the point of stabilization if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. With respect to care obtained from a nonparticipating hospital emergency department, a health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson would have reasonably believed that use of a participating hospital emergency department would result in a delay that would worsen the emergency, or if a provision of federal, state, or local law requires the use of a specific provider or facility. In addition, a health carrier shall not require prior authorization of such services provided prior to the point of stabilization if a prudent layperson acting reasonably would have believed that an emergency medical condition existed and that use of a participating hospital emergency department would result in a delay that would worsen the emergency. (b) If an authorized representative of a health carrier authorizes coverage of emergency services, the health carrier shall not subsequently retract its authorization after the emergency services have been provided, or reduce payment for an item or service furnished in reliance on approval, unless the approval was based on a material misrepresentation about the covered person's health condition made by the provider of emergency services. (c) Coverage of emergency services may be subject to applicable copayments, coinsurance, and deductibles, and a health carrier may impose reasonable differential cost-sharing arrangements for emergency services rendered by nonparticipating providers, if such differential between cost-sharing amounts applied to emergency services rendered by participating provider versus nonparticipating provider does not exceed fifty dollars. Differential cost sharing for emergency services may not be applied when a covered person presents to a nonparticipating hospital emergency department rather than a participating hospital emergency department when the health carrier requires preauthorization for postevaluation or poststabilization emergency services if: (i) Due to circumstances beyond the covered person's control, the covered person was unable to go to a participating hospital emergency department in a timely fashion without serious impairment to the covered person's health; or (ii) A prudent layperson possessing an average knowledge of health and medicine would have reasonably believed that he or she would be unable to go to a participating hospital emergency department in a timely fashion without serious impairment to the covered person's health. (d) If a health carrier requires preauthorization for postevaluation or poststabilization services, the health carrier shall provide access to an authorized representative twenty-four hours a day, seven days a week, to facilitate review. In order for postevaluation or poststabilization services to be covered by the health carrier, the provider or facility must make a documented good faith effort to contact the covered person's health carrier within thirty minutes of stabilization, if the covered person needs to be stabilized. The health carrier's authorized representative is required to respond to a telephone request for preauthorization from a provider or facility within thirty minutes. Failure of the health carrier to respond within thirty minutes constitutes authorization for the provision of immediately required medically necessary postevaluation and poststabilization services, unless the health carrier documents that it made a good faith effort but was unable to reach the provider or facility within thirty minutes after receiving the request. (e) A health carrier shall immediately arrange for an alternative plan of treatment for the covered person if a nonparticipating emergency provider and health plan cannot reach an agreement on which services are necessary beyond those immediately necessary to stabilize the covered person consistent with state and federal laws. (2) Nothing in this section is to be construed as prohibiting the health carrier from requiring notification within the time frame specified in the contract for inpatient admission or as soon thereafter as medically possible but no less than twenty-four hours. Nothing in this section is to be construed as preventing the health carrier from reserving the right to require transfer of a hospitalized covered person upon stabilization. Follow-up care that is a direct result of the emergency must be obtained in accordance with the health plan's usual terms and conditions of coverage. All other terms and conditions of coverage may be applied to emergency services. PART IV--MISCELLANEOUS NEW SECTION. Sec. 401. WICKLINE CLAUSE STUDY. (1) There is some question regarding who should be liable when a health carrier or other third-party payer refuses to pay for or provide health services recommended by a health care provider and the patient suffers injury as a result of not receiving the recommended care. This issue typically arises in managed care systems, which integrate the financing and delivery of health care services to covered persons through selected providers. Contracts between health carriers and providers may address potential liability issues regarding the relationships between the carriers and the providers. Some contracts shift potential liability for a health carrier's decision not to pay for recommended health services to the provider or patient through what are commonly referred to as "Wickline clauses." These clauses generally state it is a medical decision between the provider and patient as to whether the patient receives services that the carrier refuses to cover; this ignores the fact that the decision not to provide coverage influences the decision of the patient whether to receive the recommended care. The legislature intends to review the policy questions raised by this issue, particularly to what extent the carrier should be able to avoid liability for its decisions by insulating itself through its contracts with providers. (2) A joint task force on Wickline clauses shall review the practice of contractually assigning or avoiding potential liability for decisions by health carriers or other third-party payers not to pay for health care services recommended by a health care provider. The task force shall be comprised of two members of the house of representatives appointed by the speaker of the house, one from each major caucus, two members of the senate appointed by the president of the senate, one from each major caucus, and eight persons appointed by the legislative members of the task force. The eight nonlegislative persons on the task force shall consist of: Two representatives of health care providers; two representatives of health care consumers; two representatives of health carriers; and two representatives of self-funded health plans. The legislative members shall organize and administer the task force. Staffing shall be provided by the office of program research and senate committee services. (3) The task force shall report to the health care committees of the legislature by December 1, 1997. The report shall discuss the policy issues regarding Wickline clauses and the more general issue of potential liability for decisions of health carriers and others not to cover health care recommended by the provider. The report may contain recommendations for the legislature to consider. NEW SECTION. Sec. 402. COMMON TITLE. This act shall be known as the consumer assistance and insurance market stabilization act. NEW SECTION. Sec. 403. Part headings and section captions used in this act are not part of the law. NEW SECTION. Sec. 404. SEVERABILITY CLAUSE. 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. 405. EFFECTIVE DATES. (1) Sections 105 through 109 and 301 of this act take effect January 1, 1998. (2) Section 112 of this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 1997." Senator Sheldon demanded a roll call and the demand was sustained.

MOTION

At 10:39 a.m., on motion of Senator Johnson, the Senate recessed until 10:50 a.m.

The Senate was called to order at 10:57 a.m by President Pro Tempore Newhouse.

MOTION

On motion of Senator Sheldon, the demand for a roll call on the Committee on Health and Long-Term Care amendment was withdrawn.

MOTION

On motion of Senator Deccio, and there being no objection, the motion to adopt the Committee on Health and Long-Term Care striking amendment to Engrossed Substitute House Bill No. 2018 was withdrawn.

MOTION

On motion of Senator Deccio, the Committee on Health and Long-Term Care striking amendment to Engrossed Substitute House Bill No. 2018 was not adopted.

MOTION

On motion of Senator Johnson, further consideration of Engrossed Substitute House Bill No. 2018 was deferred.

President Owen assumed the Chair.

SECOND READING

SENATE BILL NO. 6072, by Senators West and Spanel (by request of Office of Financial Management)

Changing the timelines for development and implementation of the student assessment system.

MOTION

Senator Johnson moved that Substitute Senate Bill No. 6072 be substituted for Senate Bill No. 6072 and the substitute bill be placed on second reading and read the second time.

There being no objection, Senator Johnson withdrew the motion to substitute Senate Bill No. 6072.

MOTION

On motion of Senator McAuliffe, Senate Bill No. 6072 was not substituted.

Senate Bill No. 6072 was read the second time.

MOTION

Senator Hochstatter moved that the following amendment by Senators Hochstatter and McAuliffe be adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 28A.630.885 and 1995 c 335 s 505 and 1995 c 209 s 1 are each reenacted and amended to read as follows: (1) The Washington commission on student learning is hereby established. The primary purposes of the commission are to identify the knowledge and skills all public school students need to know and be able to do based on the student learning goals in RCW 28A.150.210, to develop student assessment and school accountability systems, to review current school district data reporting requirements and make recommendations on what data is necessary for the purposes of accountability and meeting state information needs, and to take other steps necessary to develop a performance-based education system. The commission shall include three members of the state board of education, three members appointed by the governor before July 1, 1992, and five members appointed no later than June 1, 1993, by the governor elected in the November 1992 election. The governor shall appoint a chair from the commission members, and fill any vacancies in gubernatorial appointments that may occur. The state board of education shall fill any vacancies of state board of education appointments that may occur. In making the appointments, educators, business leaders, and parents shall be represented, and nominations from state-wide education, business, and parent organizations shall be requested. Efforts shall be made to ensure that the commission reflects the racial and ethnic diversity of the state's K-12 student population and that the major geographic regions in the state are represented. Appointees shall be qualified individuals who are supportive of educational restructuring, who have a positive record of service, and who will devote sufficient time to the responsibilities of the commission to ensure that the objectives of the commission are achieved. (2) The commission shall establish advisory committees. Membership of the advisory committees shall include, but not necessarily be limited to, professionals from the office of the superintendent of public instruction and the state board of education, and other state and local educational practitioners and student assessment specialists. (3) The commission, with the assistance of the advisory committees, shall: (a) Develop essential academic learning requirements based on the student learning goals in RCW 28A.150.210. Essential academic learning requirements shall be developed, to the extent possible, for each of the student learning goals in RCW 28A.150.210. Goals one and two shall be considered primary. Essential academic learning requirements for RCW 28A.150.210(1), goal one, and the mathematics component of RCW 28A.150.210(2), goal two, shall be completed no later than March 1, 1995. Essential academic learning requirements that incorporate the remainder of RCW 28A.150.210 (2), (3), and (4), goals two, three, and four, shall be completed no later than March 1, 1996. To the maximum extent possible, the commission shall integrate goal four and the knowledge and skill areas in the other goals in the development of the essential academic learning requirements; (b)(i) The commission shall present to the state board of education and superintendent of public instruction a state-wide academic assessment system for use in the elementary, middle, and high school years designed to determine if each student has mastered the essential academic learning requirements identified in (a) of this subsection. The academic assessment system shall include a variety of assessment methods, including criterion-referenced and performance-based measures ((that are criterion-referenced)). Performance standards for determining if a student has successfully completed an assessment shall be initially determined by the commission in consultation with the advisory committees required in subsection (2) of this section. (ii) The assessment system shall be designed so that the results under the assessment system are used by educators as tools to evaluate instructional practices, and to initiate appropriate educational support for students who have not mastered the essential academic learning requirements at the appropriate periods in the student's educational development. (iii) Assessments measuring the essential academic learning requirements developed for RCW 28A.150.210(1)((, goal one,)) and the mathematics component of RCW 28A.150.210(2)((, goal two,)) referred to in this section as reading, writing, communications, and mathematics shall be ((initially implemented by the state board of education and superintendent of public instruction no later than the 1996-97)) developed and initially implemented by the commission before transferring the assessment system to the superintendent of public instruction on June 30, 1999. The elementary assessments for reading, writing, communications, and mathematics shall be available for use by school districts no later than the 1996-97 school year, the middle school assessment no later than the 1997-98 school year, and the high school assessment no later than the 1998-99 school year, unless the legislature takes action to delay or prevent implementation of the assessment system and essential academic learning requirements. Assessments measuring the essential academic learning requirements developed for the science component of RCW 28A.150.210 (2)((, (3), and (4), goals two, three, and four, shall be initially implemented by the state board of education and superintendent of public instruction)) at the middle school and high school levels shall be available for use by districts no later than the 1998-99 school year((,)) unless the legislature takes action to delay or prevent implementation of the assessment system and essential academic learning requirements. The completed assessments and assessments still in development shall be transferred to the superintendent of public instruction by June 30, 1999, unless the legislature takes action to delay implementation of the assessment system and essential academic learning requirements. The superintendent shall continue the development of assessments on the following schedule: The history, civics, and geography assessments at the middle and high school levels shall be available for use by districts no later than 2000-01 school year; the arts assessment for middle and high school levels shall be available for use by districts no later than 2000-01 school year; and the health and fitness assessments for middle and high school levels shall be available no later than the 2001-02 school year. The elementary science assessment shall be available for use by districts not later than the 2001-02 school year. The commission or the superintendent, as applicable, shall upon request, provide opportunities for the education committees of the house of representatives and the senate to review the assessments and proposed modifications to the essential academic learning requirements before the modifications are adopted. By December 15, 1998, the commission on student learning shall recommend to the appropriate committees of the legislature a revised timeline for implementing these assessments and when the school districts should be required to participate. All school districts shall be required to participate in the history, civics, geography, arts, health, fitness, and elementary science assessments in the third year after the assessments are available to school districts. To the maximum extent possible, the commission shall integrate knowledge and skill areas in development of the assessments. (iv) Assessments for goals three and four of RCW 28A.150.210 shall be integrated in the essential academic learning requirements and assessments for goals one and two. Before the 1997-98 school year, the elementary assessment system in reading, writing, communications, and mathematics shall be optional. School districts that desire to participate before the 1997-98 school year shall notify the commission on student learning in a manner determined by the commission. Beginning in the 1997-98 school year, school districts shall be required to participate in the elementary assessment system for reading, writing, communications, and mathematics. Before the 2000-((2001)) 01 school year, participation by school districts in the middle school and high school assessment system for reading, writing, communications, mathematics, and science shall be optional. School districts that desire to participate before the ((2000-2001)) 1998-99 school year shall notify the ((superintendent of public instruction)) commission on student learning in a manner determined by the ((superintendent)) commission on student learning. Schools that desire to participate after the 1998-99 school year, shall notify the superintendent of public instruction in a manner determined by the superintendent. Beginning in the 2000-((2001)) 01 school year, all school districts shall be required to participate in the assessment system for reading, writing, communications, mathematics, and science. (v) The ((state board of education and superintendent of public instruction)) commission on student learning may modify the essential academic learning requirements and ((academic assessment system)) the assessments for reading, writing, communications, mathematics, and science, as needed, ((in subsequent school years)) before June 30, 1999. The commission shall, upon request, provide opportunities for the education committees of the house of representatives and the senate to review the assessments and proposed modifications to the essential academic learning requirements before the modifications are adopted. (vi) The commission shall develop assessments that are directly related to the essential academic learning requirements, and are not biased toward persons with different learning styles, racial or ethnic backgrounds, or on the basis of gender; (c) After a determination is made by the state board of education that the high school assessment system has been implemented and that it is sufficiently reliable and valid, successful completion of the high school assessment shall lead to a certificate of mastery. The certificate of mastery shall be obtained by most students at about the age of sixteen, and is evidence that the student has successfully mastered the essential academic learning requirements during his or her educational career. The certificate of mastery shall be required for graduation but shall not be the only requirement for graduation. The commission shall make recommendations to the state board of education regarding the relationship between the certificate of mastery and high school graduation requirements. Upon achieving the certificate of mastery, schools shall provide students with the opportunity ((to continue)) to pursue career and educational objectives through educational pathways that emphasize integration of academic and vocational education. Educational pathways may include, but are not limited to, programs such as work-based learning, school-to-work transition, tech prep, vocational-technical education, running start, and preparation for technical college, community college, or university education; (d) Consider methods to address the unique needs of special education students when developing the assessments in (b) and (c) of this subsection; (e) Consider methods to address the unique needs of highly capable students when developing the assessments in (b) and (c) of this subsection; (f) Develop recommendations on the time, support, and resources, including technical assistance, needed by schools and school districts to help students achieve the essential academic learning requirements. These recommendations shall include an estimate for the legislature, superintendent of public instruction, and governor on the expected cost of implementing the academic assessment system; (g) Develop recommendations for consideration by the higher education coordinating board for adopting college and university entrance requirements for public school students that are consistent with the essential academic learning requirements and the certificate of mastery; (h) Review current school district data reporting requirements for the purposes of accountability and meeting state information needs. The commission on student learning shall report recommendations to the joint select committee on education restructuring by September 15, 1996, on: (i) What data is necessary to compare how school districts are performing before the essential academic learning requirements and the assessment system are implemented with how school districts are performing after the essential academic learning requirements and the assessment system are implemented; and (ii) What data is necessary pertaining to school district reports under the accountability systems developed by the commission on student learning under this section; (i) ((By June 30, 1999,)) Recommend to the legislature, governor, state board of education, and superintendent of public instruction: (i) A state-wide accountability system to monitor and evaluate accurately and fairly at elementary, middle, and high schools the level of learning occurring in individual schools and school districts with regard to the goals included in RCW 28A.150.210 (1) through (4). ((The accountability system shall be designed to

recognize the characteristics of the student population of schools and school districts such as gender, race, ethnicity, socioeconomic status, and other factors.)) The accountability system must assess each school individually against its own baseline, schools with similar characteristics, and schools state-wide. The system shall include school-site, school district, and state-level accountability reports; (ii) A school assistance program to help schools and school districts that are having difficulty helping students meet the essential academic learning requirements as measured by performance on the elementary, middle school, and high school assessments; (iii) A system to intervene in schools and school districts in which significant numbers of students persistently fail to learn the essential academic learning requirements or meet the standards established for the elementary, middle school, and high school assessments; and (iv) An awards program to provide incentives to school staff to help their students learn the essential academic learning requirements, with each school being assessed individually against its own baseline, schools with similar characteristics, and the state-wide average. Incentives shall be based on the rate of percentage change of students achieving the essential academic learning requirements and progress on meeting the state-wide average. School staff shall determine how the awards will be spent. ((It is the intent of the legislature to begin implementation of programs in this subsection (3)(i) on September 1, 2000;)) The commission shall make recommendations regarding a state-wide accountability system for reading in grades kindergarten through four by November 1, 1997. Recommendations for an accountability system in the other subject areas and grade levels shall be made no later than June 30, 1999; (j) Report annually by December 1st to the legislature, the governor, the superintendent of public instruction, and the state board of education on the progress, findings, and recommendations of the commission; and (k) Make recommendations to the legislature and take other actions necessary or desirable to help students meet the student learning goals. (4) The commission shall coordinate its activities with the state board of education and the office of the superintendent of public instruction. (5) The commission shall seek advice broadly from the public and all interested educational organizations in the conduct of its work, including holding periodic regional public hearings. (6) The commission shall select an entity to provide staff support and the office of the superintendent of public instruction shall provide administrative oversight and be the fiscal agent for the commission. The commission may direct the office of the superintendent of public instruction to enter into subcontracts, within the commission's resources, with school districts, teachers, higher education faculty, state agencies, business organizations, and other individuals and organizations to assist the commission in its deliberations. (7) Members of the commission shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060. (8)(a) By September 30, 1997, the commission on student learning, the state board of education, and the superintendent of public instruction shall jointly present recommendations to the education committees of the house of representatives and the senate regarding the high school assessments, the certificate of mastery, and high school graduation requirements. In preparing recommendations, the commission on student learning shall convene an ad hoc working group to address questions, including: (i) What type of document shall be used to identify student performance and achievement and how will the document be described? (ii) Should the students be required to pass the high school assessments in all skill and content areas, or only in select skill and content areas, to graduate? (iii) How will the criteria for establishing the standards for passing scores on the assessments be determined? (iv) What timeline should be used in phasing-in the assessments as a graduation requirement? (v) What options may be used in demonstrating how the results of the assessments will be displayed in a way that is meaningful to students, parents, institutions of higher education, and potential employers? (vi) Are there other or additional methods by which the assessments could be used to identify achievement such as endorsements, standards of proficiency, merit badges, or levels of achievement? (vii) Should the assessments and certificate of mastery be used to satisfy college or university entrance criteria for public school students? If yes, how should these methods be phased-in? (b) The ad hoc working group shall report its recommendations to the commission on student learning, the state board of education, and the superintendent of public instruction by June 15, 1997. The commission shall report the ad hoc working group's recommendations to the education committees of the house of representatives and senate by July 15, 1997. Final recommendations of the commission on student learning, the state board of education, and the superintendent of public instruction shall be presented to the education committees of the house of representatives and the senate by September 30, 1997. (9) The Washington commission on student learning shall expire on June 30, 1999. NEW SECTION. Sec. 2. 1995 c 335 s 803 (uncodified) is repealed.

NEW SECTION. Sec. 3. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately." Debate ensued.

The President declared the question before the Senate to be the adoption of the striking amendment by Senators Hochstatter and McAuliffe to Senate Bill No. 6072.

The motion by Senator Hochstatter carried and the striking amendment was adopted.

MOTIONS

On motion of Senator Hochstatter, the following title amendment was adopted:

On page 1, line 2 of the title, after "system;" strike the remainder of the title and insert "reenacting and amending RCW 28A.630.885; repealing 1995 c 335 s 803 (uncodified); and declaring an emergency." On motion of Senator Hochstatter, the rules were suspended, Engrossed Senate Bill No. 6072 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Senate Bill No. 6072.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6072 and the bill passed the Senate by the following vote: Yeas, 44; Nays, 5; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Brown, Deccio, Fairley, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Sellar, Sheldon, Snyder, Spanel, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn and Wood - 44. Voting nay: Senators Benton, Finkbeiner, Schow, Stevens and Zarelli - 5. ENGROSSED SENATE BILL NO. 6072, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

There being no objection, the Senate resumed consideration of Engrossed Substitute House Bill No. 2018, deferred earlier today after the Committee on Health and Long-Term Care striking amendment was withdrawn.

MOTION

On motion of Senator Deccio, the following amendment was adopted:

Strike everything after the enacting clause and insert the following:

"HEALTH INSURANCE REFORMTABLE OF CONTENTS

PART I--CONSUMER PROTECTIONS UTILIZATION REVIEW--INTENT UTILIZATION REVIEW--DEFINITIONSUTILIZATION REVIEW--REVIEW ORGANIZATIONUTILIZATION REVIEW--STANDARDSUTILIZATION REVIEW--LIMITED RECORD ACCESSGRIEVANCE PROCEDURES--INTENTGRIEVANCE PROCEDURES--STANDARDSGRIEVANCE PROCEDURE FOR HEALTH CARE PROVIDERSGRIEVANCE PROCEDURES--REPEALERNETWORK ADEQUACY--INTENTNETWORK ADEQUACY--STUDY AND RESTRICTIONACCESS PLAN REQUIREMENTSMEDICAL ASSISTANCE WAIVERS

PART II--MARKETPLACE STABILITY LEGISLATIVE INTENT DEFINITIONS PREEXISTING CONDITION LIMITATIONS MODIFIEDGUARANTEED ISSUE AND CONTINUITY OF COVERAGE MODIFIEDTENURE DISCOUNTS--INDIVIDUAL DISABILITY COVERAGETENURE DISCOUNTS--HEALTH CARE SERVICE CONTRACTORSTENURE DISCOUNTS--HEALTH MAINTENANCE ORGANIZATIONSHEALTH INSURANCE POOL--DEFINITIONSHEALTH INSURANCE POOL--BOARD POWERS MODIFIEDHEALTH INSURANCE POOL--ADMINISTRATOR'S POWER MODIFIEDHEALTH INSURANCE POOL--BENEFITS MODIFIEDHEALTH INSURANCE POOL--RATE MODIFIEDHEALTH INSURANCE POOL--SUBSTANTIAL EQUIVALENT CLARIFIEDLOSS RATIOS--HEALTH CARE SERVICE CONTRACTORSLOSS RATIOS--HEALTH MAINTENANCE ORGANIZATIONSLOSS RATIOS--GROUPS' DISABILITY COVERAGELOSS RATIOS--INDIVIDUAL DISABILITY COVERAGELOSS RATIOS--DISABILITY COVERAGE EXEMPTIONSLOSS RATIOS--DISABILITY COVERAGE DEFINITIONS

PART III--BENEFITS AND SERVICE DELIVERY EMERGENCY MEDICAL SERVICES

PART IV--MISCELLANEOUS WICKLINE CLAUSE STUDY COMMON TITLE SEVERABILITY CLAUSEEFFECTIVE DATES

PART I--CONSUMER PROTECTIONS

NEW SECTION. Sec. 101. UTILIZATION REVIEW--INTENT. The legislature intends that the delivery of quality health care services to individuals in the state of Washington be consistent with a wise use of resources. It is therefore the purpose of this act to define standards for utilization review of health care services and to promote the delivery of health care in a cost-effective manner. The legislature reaffirms its commitment to improving health care services through encouraging the availability of effective and consistent utilization review throughout this state. The legislature believes that standards for utilization review will help assure quality oversight of individual case evaluations in this state. NEW SECTION. Sec. 102. A new section is added to chapter 48.43 RCW to read as follows: UTILIZATION REVIEW--REVIEW ORGANIZATION. (1) Beginning on January 1, 1998, every review organization that performs utilization review of inpatient and outpatient benefits for residents of this state shall meet the standards set forth in this section and section 103 of this act. (a) Review organizations shall comply with all applicable state and federal laws to protect confidentiality of enrollee medical records. (b) Any certification by a review organization as to the medical necessity or appropriateness of an admission, length of stay, extension of stay, or service or procedure must be made in accordance with medical standards or guidelines approved by a licensed physician. (c) Any determination by a review organization to deny an admission, length of stay, extension of stay, or service or procedure on the basis of medical necessity or appropriateness must be made by a licensed physician who has reasonable access to board certified specialty providers in making such determinations. (d) Review organizations shall make staff available to perform utilization review activities by toll-free or collect telephone, at least forty hours per week during normal business hours. (e) Review organizations shall have a phone system capable of accepting or recording, or both, incoming phone calls relating to utilization review during other than normal business hours and shall respond to these calls within two business days. (f) Review organizations shall maintain a documented utilization review program description and written utilization review criteria based on reasonable medical evidence. The program must include a method for reviewing and updating criteria. Review organizations shall make utilization review criteria available upon request to the participating provider involved in a specific case under review. (g) Review organizations shall designate a licensed physician to participate in utilization review program implementation. (2) The legislature finds that current utilization review accreditation commission and national committee for quality assurance utilization review standards meet or exceed the requirements of this section. Health carriers who continuously maintain such accreditation are hereby deemed in compliance with this section for their accredited health plans. The office of the insurance commissioner shall periodically examine the review organization accreditation standards of the utilization review accreditation commission and the national committee for quality assurance and report to the legislature to ensure that such standards continue to be substantially equivalent to or exceed the requirements of section 103 of this act. NEW SECTION. Sec. 103. A new section is added to chapter 48.43 RCW to read as follows: UTILIZATION REVIEW--STANDARDS. (1) Notification of an initial determination by the review organization to certify an admission, length of stay, extension of stay, or service or procedure must be mailed or otherwise communicated to the provider of record or the enrollee, or the enrollee's authorized representative, or both, within two business days of the determination and following the receipt of all information necessary to complete the review. (2) Notification of an initial determination by the review organization to deny an admission, length of stay, extension of stay, or service or procedure must be mailed or otherwise communicated to the provider of record or the enrollee, or the enrollee's authorized representative, or both, within one business day of the determination and following the receipt of all information necessary to complete the review. (3) Any notification of a determination to deny an admission, length of stay, extension of stay, or service or procedure must include: (a) The review organization's decision in clear terms and the rationale in sufficient detail for the enrollee to respond further to the review organization's decision; and (b) The procedures to initiate an appeal of an adverse determination. (4) Health care facilities and providers shall cooperate with the reasonable efforts of review organizations to ensure that all necessary enrollee information is available in a timely fashion by phone during normal business hours. Health care facilities and providers shall allow on-site review of medical records by review organizations. These provisions are subject to the requirements regarding health care information disclosure in chapter 70.02 RCW. NEW SECTION. Sec. 104. A new section is added to chapter 48.43 RCW to read as follows: UTILIZATION REVIEW--LIMITED RECORD ACCESS. In performing a utilization review, a review organization is limited to access to specific health care service information necessary to complete the review being performed relating to the covered person. NEW SECTION. Sec. 105. GRIEVANCE PROCEDURES--INTENT. The legislature is committed to the efficient use of state resources in promoting public health and protecting the rights of individuals in the state of Washington. The purpose of this act is to provide standards for the establishment and maintenance of procedures by health carriers to assure that covered persons have the opportunity for the appropriate resolution of their grievances, as defined in this act. NEW SECTION. Sec. 106. A new section is added to chapter 48.43 RCW to read as follows: GRIEVANCE PROCEDURES--STANDARDS. (1) Every health carrier shall use written procedures for receiving and resolving grievances from covered persons. At each level of review of a grievance, the health carrier shall include a person or persons with sufficient background and authority to deliberate the merits of the grievance and establish appropriate terms of resolution. The health carrier's medical director or designee shall be available to participate in the review of any grievance involving a clinical issue or issues. A grievance that includes an issue of clinical quality of care as determined by the health carrier's medical director or designee may be directed to the health carrier's quality assurance committee for review and comment. Nothing in this section alters any protections afforded under statutes relating to confidentiality and nondiscoverability of quality assurance activities and information. (2)(a) A complaint that is not submitted in writing may be resolved directly by the health carrier with the covered person, and is not considered a grievance subject to the review, recording, and reporting requirements of this section. (b) The health carrier is required to provide telephone access to covered persons for purposes of presenting a complaint for review. Each telephone number provided shall be toll free or collect within the health carrier's service area and provide reasonable access to the health carrier without undue delays during normal business hours. (3)(a) A grievance may be submitted by a covered person or a representative acting on behalf of the covered person through written authority to assure protection of the covered person's private information. Within three working days of receiving a grievance, the health carrier shall acknowledge in writing the receipt of the grievance and the department name and address where additional information may be submitted by the covered person or authorized representative of the covered person. The health carrier shall process the grievance in a reasonable length of time not to exceed thirty days from receipt of the written grievance. If the grievance involves the collection of information from sources external to the health carrier and its participating providers, the health carrier has an additional thirty days to process the covered person's grievance. (b) The health carrier shall provide the covered person, or authorized representative of the covered person, with a written determination of its review within the time frame specified in (a) of this subsection. The written determination shall contain at a minimum: (i) The health carrier's decision in clear terms and the rationale in sufficient detail for the covered person or authorized representative of the covered person to respond further to the health carrier's decision; and (ii) When the health carrier's decision is not wholly favorable to the covered person, a description of the process to obtain a second level grievance review of the decision, including the time frames required for submission of a request by the covered person or authorized representative of the covered person. (4)(a) A health carrier shall provide a second level grievance review for those covered persons who are dissatisfied with the first level grievance review decision and who submit a written request for review. The second level review process shall include an opportunity for the covered person or authorized representative of the covered person to appear in person before the representative or representatives of the health carrier. The covered person or authorized representative of the covered person must ask for a personal appearance in the written request for a second level review. (b) The health carrier shall process the grievance in a reasonable length of time, not to exceed thirty days from receipt of the request for a second level review. The time required to resolve the second level review may be extended for a specified period if mutually agreed upon by the covered person or authorized representative of the covered person and the health carrier. (c) A health carrier's procedures for conducting a second level review must include the following: (i) The second level review panel shall be comprised of representatives of the health carrier not otherwise participating in the first level review. If the grievance involves a clinical issue or issues, the health carrier shall appoint a health care professional with appropriate qualifications to assess the clinical considerations of the case who was not previously involved with the grievance under review and who has no financial interest in the outcome of the review; (ii) The review panel shall schedule the review meeting to reasonably accommodate the covered person or authorized representative of the covered person and not unreasonably deny a request for postponement of the review requested by the covered person or authorized representative of the covered person; and (iii) The health carrier shall notify the covered person or authorized representative of the covered person in writing at least fifteen days in advance of the scheduled review date unless a shorter time frame is agreed to by the health carrier and the covered person. The review meeting shall be held at a location within the health carrier's service area that is reasonably accessible to the covered person or authorized representative of the covered person. In cases where a face-to-face meeting is not practical for geographic reasons, a health carrier shall offer the covered person or authorized representative of the covered person the opportunity to communicate with the review panel, at the health carrier's expense, by conference call, video conferencing, or other appropriate technology as determined by the health carrier. (d) The health carrier shall issue a written decision to the covered person or authorized representative of the covered person within five working days of completing the review meeting. The decision shall include: (i) A statement of the health carrier's understanding of the nature of the grievance and all pertinent facts; (ii) The health carrier's decision in clear terms and the rationale for the review panel's decision; and (iii) Notice of the covered person's right to any further review by the health carrier. (e) Determination of a grievance at the final level review that is unfavorable to the covered person may be submitted by the covered person or authorized representative of the covered person to nonbinding mediation. Mediation shall be conducted under mediation rules similar to those of the American arbitration association, the center for public resources, the judicial arbitration and mediation service, RCW 7.70.100, or any other rules of mediation agreed to by the parties. (5) Each health carrier as defined in this chapter shall file with the commissioner its procedures for review and adjudication of grievances initiated by covered persons. (6) The health carrier shall maintain accurate records of each grievance to include the following: (a) A description of the grievance, the date received by the health carrier, and the name and identification number of the covered person; and (b) A statement as to which level of the grievance procedure the grievance has been brought, the date at which it was brought to each level, the decision reached at each level, and a summary description of the rationale for the decision. (7) Each health carrier shall make an annual report available to the commissioner. The report shall include for each type of health benefit plan offered by the health carrier: The number of covered lives; the total number of grievances received divided into the following categories: (a) Access, health carrier customer service, health care provider or facility service, and claim payment; (b) dispute resolution; (c) the number of grievances resolved at each level; and (d) the total number of decisions favorable and unfavorable to the covered person. (8) A notice of the availability and the requirements of the grievance procedure, including the address where a written grievance may be filed, shall be included in or attached to the policy, certificate, membership booklet, outline of coverage, or other evidence of coverage provided by the health carrier to its enrollees. (9) The notice shall include a toll-free or collect telephone number for a covered person to obtain verbal explanation of the grievance procedure. (10) A health carrier shall establish written procedures for the expedited review of a grievance involving a situation where the time to resolve a grievance according to the procedures set forth in this section would seriously jeopardize the life or health of a covered person. A request for an expedited review may be submitted orally or in writing by a covered person or authorized representative of the covered person. A health carrier's procedures for establishing an expedited review process shall include the following: (a) The health carrier shall appoint an appropriate health care professional to participate in expedited reviews and shall provide reasonable access to board-certified specialty providers as typically manage the issue under review. (b) A health carrier shall provide expedited review to all requests concerning an admission, availability of care, continued stay, or review of a health care service for a covered person who has received emergency services but has not been discharged from a facility. (c) All necessary information, including the health carrier's decision, shall be transmitted between the health carrier and the covered person or authorized representative of the covered person by telephone, facsimile, or the most expeditious method available as determined by the health carrier. (d) A health carrier shall make a decision and notify the covered person or authorized representative of the covered person as expeditiously as the medical condition of the covered person requires, but no more than two business days after the request for expedited review is received by the health carrier. If the expedited review is a concurrent review determination, the service shall be continued without liability to the covered person until the covered person or authorized representative of the covered person has been notified of the decision by the health carrier. (e) A health carrier shall provide written confirmation of its decision concerning an expedited review within two working days of providing notification of that decision to the enrollee, if the initial notification was not in writing. The written notification shall contain the provisions required in subsection (3) of this section pertaining to a first level grievance review. (f) In any case where the expedited review process does not resolve a difference of opinion between a health carrier and the covered person, the covered person or authorized representative of the covered person may request a second level grievance review. In conducting the second level grievance review, the health carrier shall adhere to time frames that are reasonable under the circumstances, but in no event to exceed the time frames specified in subsection (4) of this section pertaining to second level grievance review. (11) The legislature finds that current national committee for quality assurance grievance procedure standards meet or exceed the requirements of this section. Health carriers who continuously maintain such accreditation are hereby deemed in compliance with this section for their accredited health plans. The office of the insurance commissioner shall periodically examine the accreditation standards of the national committee for quality assurance and report to the legislature to ensure that such standards continue to be substantially equivalent to or exceed the requirements of this section. Sec. 107. RCW 48.43.055 and 1995 c 265 s 20 are each amended to read as follows: GRIEVANCE PROCEDURE FOR HEALTH CARE PROVIDERS. Each health carrier as defined under RCW 48.43.005 shall file with the commissioner its procedures for review and adjudication of complaints initiated by ((covered persons or)) a health care provider((s)). Procedures filed under this section shall provide a fair review for consideration of complaints. Every health carrier shall provide reasonable means whereby ((any person)) a health care provider aggrieved by actions of the health carrier may be heard in person or by their authorized representative on their written request for review. If the health carrier fails to grant or reject such request within thirty days after it is made, the complaining ((person)) provider may proceed as if the complaint had been rejected. A complaint that has been rejected by the health carrier may be submitted to nonbinding mediation. Mediation shall be conducted pursuant to mediation rules similar to those of the American arbitration association, the center for public resources, the judicial arbitration and mediation service, RCW 7.70.100, or any other rules of mediation agreed to by the parties. NEW SECTION. Sec. 108. GRIEVANCE PROCEDURES--REPEALER. RCW 48.46.100 and 1975 1st ex.s. c 290 s 11 are each repealed. NEW SECTION. Sec. 109. NETWORK ADEQUACY--INTENT. The legislature declares that it is in the public interest that health carriers utilizing provider networks use reasonable means of assessing that their provider networks are adequate to provide covered services to their enrollees. The legislature finds that empirical assessment of provider network adequacy is in developmental stages, and that rigid, formulaic approaches are unworkable and inhibit innovation and approaches tailored to meet the needs of varying communities and populations. The legislature therefore finds that, given these limitations, an assessment is needed to determine whether network adequacy requirements are needed and, if necessary, whether the type of measures used by current accreditation programs, such as the national committee on quality assurance, meets these needs. NEW SECTION. Sec. 110. NETWORK ADEQUACY--STUDY AND RESTRICTION. (1) The health care authority, in consultation with the office of the insurance commissioner, the department of social and health services, the department of health, consumers, providers, and health carriers, shall review the need for network adequacy requirements. The review must include an evaluation of the approaches used by the national committee on quality assurance and any similar, nationally recognized accreditation programs. The department shall submit its report and recommendations to the health care committees of the legislature by January 1, 1998, and include recommendations on: (a) Whether legislatively determined network adequacy requirements are necessary and advisable and the evidence to support this; (b) If standards are needed, to what extent such standards can be made consistent with the national committee on quality assurance standards, and whether national committee on quality assurance accredited carriers, or carriers accredited by other, nationally recognized accreditation programs, should be exempted from state review and requirements; (c) Whether and how the state could promote uniformity of approach across commercial purchaser requirements and state and federal agency requirements so as to assure adequate consumer access while promoting the most efficient use of public and private health care financial resources; (d) Means to assure that health carriers and health systems maintain the flexibility necessary to responsibly determine the best ways to meet the needs of the populations they serve while controlling the costs of the health care services provided; (e) Which types of health systems and health carriers should be subject to network adequacy requirements, if any; and (f) An objective estimate of the potential costs of such requirements and any recommended oversight functions. (2) No agency may engage in rule making relating to network adequacy until the legislature has reviewed the findings and recommendations of the study and has passed legislation authorizing the department of health or other appropriate agency to engage in rule making in this area in accordance with the policy direction set by the legislature. NEW SECTION. Sec. 111. A new section is added to chapter 48.43 RCW to read as follows: ACCESS PLAN REQUIREMENTS. (1) Beginning July 1, 1997, every health carrier, as defined in RCW 48.43.005, shall develop and update annually an access plan that meets the requirements of this section for each of the health care networks that the carrier offers in this state. The health carrier shall make the access plans available on its business premises and shall provide nonproprietary information to any interested party upon request. The carrier shall prepare an access plan prior to offering a health plan utilizing a substantially different health care network. The plan shall include, at least, the following: (a) The health carrier's network of providers and facilities by license, certification and registration type, and by geographic location; (b) The health carrier's process for monitoring and assuring on an ongoing basis the sufficiency of the provider network to meet the covered health care needs of its enrolled populations; and (c) The health carrier's methods for assessing the health care needs of covered persons and their satisfaction with services. (2) On or before August 1, 1997, each health carrier shall submit its access plan or plans to the Washington state health care authority for purposes of assisting the authority with its report and recommendations on network adequacy standards required under section 110 of this act. (3) The legislature finds that current national committee for quality assurance network adequacy standards meet or exceed the requirements of this section. Health carriers who continuously maintain such accreditation are hereby deemed in compliance with this section for their accredited health plans. The office of the insurance commissioner shall periodically examine the accreditation standards of the national committee for quality assurance and report to the legislature to ensure that such standards continue to be substantially equivalent to or exceed the requirements of this section. NEW SECTION. Sec. 112. A new section is added to chapter 74.09 RCW to read as follows: MEDICAL ASSISTANCE WAIVERS. To the extent that federal statutes or regulations, or provisions of waivers granted to the department of social and health services by the federal department of health and human services, include standards that differ from the minimums stated in sections 101 through 106, 109, and 111 of this act, those sections do not apply to contracts with health carriers awarded pursuant to RCW 74.09.522.

PART II--MARKETPLACE STABILITY

NEW SECTION. Sec. 201. LEGISLATIVE INTENT. The legislature intends that individuals in the state of Washington have access to affordable individual health plan coverage. The legislature reaffirms its commitment to guaranteed issue and renewability, portability, and limitations on use of preexisting condition exclusions. The legislature also finds that the lack of incentives for individuals to purchase and maintain coverage independent of anticipated need for health care has contributed to soaring health care claims experience in many individual health plans. The legislature therefore intends that refinements be made to the state's individual market reform laws to provide needed incentives and to help assure that more affordable coverage is accessible to Washington residents. Sec. 202. RCW 48.43.005 and 1995 c 265 s 4 are each amended to read as follows: DEFINITIONS. Unless otherwise specifically provided, the definitions in this section apply throughout this chapter. (1) "Adjusted community rate" means the rating method used to establish the premium for health plans adjusted to reflect actuarially demonstrated differences in utilization or cost attributable to geographic region, age, family size, and use of wellness activities. (2) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time. (3) "Basic health plan model plan" means a health plan as required in RCW 70.47.060(2)(d). (4) "Basic health plan services" means that schedule of covered health services, including the description of how those benefits are to be administered, that are required to be delivered to an enrollee under the basic health plan, as revised from time to time. (5) "Certification" means a determination by a review organization that an admission, extension of stay, or other health care service or procedure has been reviewed and, based on the information provided, meets the clinical requirements for medical necessity, appropriateness, level of care, or effectiveness under the auspices of the applicable health benefit plan. (6) "Concurrent review" means utilization review conducted during a patient's hospital stay or course of treatment. (7) "Covered person" or "enrollee" means a person covered by a health plan including an enrollee, subscriber, policyholder, beneficiary of a group plan, or individual covered by any other health plan. (((3))) (8) "Dependent" means, at a minimum, the enrollee's legal spouse and unmarried dependent children who qualify for coverage under the enrollee's health benefit plan. (9) "Eligible employee" means an employee who works on a full-time basis with a normal work week of thirty or more hours. The term includes a self-employed individual, including a sole proprietor, a partner of a partnership, and may include an independent contractor, if the self-employed individual, sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer, but does not work less than thirty hours per week and derives at least seventy-five percent of his or her income from a trade or business through which he or she has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form. Persons covered under a health benefit plan pursuant to the consolidated omnibus budget reconciliation act of 1986 shall not be considered eligible employees for purposes of minimum participation requirements of chapter 265, Laws of 1995. (((4))) (10) "Emergency medical condition" means the emergent and acute onset of a symptom or symptoms, including severe pain, that would lead a prudent layperson acting reasonably to believe that a health condition exists that requires immediate medical attention, if failure to provide medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy. (11) "Emergency services" means otherwise covered health care services medically necessary to evaluate and treat an emergency medical condition, provided in a hospital emergency department. (12) "Enrollee point-of-service cost-sharing" means amounts paid to health carriers directly providing services, health care providers, or health care facilities by enrollees and may include copayments, coinsurance, or deductibles. (((5))) (13) "Grievance" means a written complaint submitted by or on behalf of a covered person regarding: (a) Denial of payment for medical services or nonprovision of medical services included in the covered person's health benefit plan, or (b) service delivery issues other than denial of payment for medical services or nonprovision of medical services, including dissatisfaction with medical care, waiting time for medical services, provider or staff attitude or demeanor, or dissatisfaction with service provided by the health carrier. (14) "Health care facility" or "facility" means hospices licensed under chapter 70.127 RCW, hospitals licensed under chapter 70.41 RCW, rural health care facilities as defined in RCW 70.175.020, psychiatric hospitals licensed under chapter 71.12 RCW, nursing homes licensed under chapter 18.51 RCW, community mental health centers licensed under chapter 71.05 or 71.24 RCW, kidney disease treatment centers licensed under chapter 70.41 RCW, ambulatory diagnostic, treatment, or surgical facilities licensed under chapter 70.41 RCW, drug and alcohol treatment facilities licensed under chapter 70.96A RCW, and home health agencies licensed under chapter 70.127 RCW, and includes such facilities if owned and operated by a political subdivision or instrumentality of the state and such other facilities as required by federal law and implementing regulations. (((6))) (15) "Health care provider" or "provider" means: (a) A person regulated under Title 18 or chapter 70.127 RCW, to practice health or health-related services or otherwise practicing health care services in this state consistent with state law; or (b) An employee or agent of a person described in (a) of this subsection, acting in the course and scope of his or her employment. (((7))) (16) "Health care service" means that service offered or provided by health care facilities and health care providers relating to the prevention, cure, or treatment of illness, injury, or disease. (((8))) (17) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020. (((9))) (18) "Health plan" or "health benefit plan" means any policy, contract, or agreement offered by a health carrier to provide, arrange, reimburse, or pay for health care services except the following: (a) Long-term care insurance governed by chapter 48.84 RCW; (b) Medicare supplemental health insurance governed by chapter 48.66 RCW; (c) Limited health care services offered by limited health care service contractors in accordance with RCW 48.44.035; (d) Disability income; (e) Coverage incidental to a property/casualty liability insurance policy such as automobile personal injury protection coverage and homeowner guest medical; (f) Workers' compensation coverage; (g) Accident only coverage; (h) Specified disease and hospital confinement indemnity when marketed solely as a supplement to a health plan; (i) Employer-sponsored self-funded health plans; and (j) Dental only and vision only coverage. (((10) "Basic health plan services" means that schedule of covered health services, including the description of how those benefits are to be administered, that are required to be delivered to an enrollee under the basic health plan, as revised from time to time.)) (19) "Material modification" means a change in the actuarial value of the health plan as modified of more than five percent but less than fifteen percent. (20) "Open enrollment" means the annual sixty-two day period during the months of July and August during which every health carrier offering individual health plan coverage must accept onto individual coverage any state resident within the carrier's service area regardless of health condition who submits an application in accordance with RCW 48.43.035(1). (((11))) (21) "Preexisting condition" means any medical condition, illness, or injury that existed any time prior to the effective date of coverage. (((12))) (22) "Premium" means all sums charged, received, or deposited by a health carrier as consideration for a health plan or the continuance of a health plan. Any assessment or any "membership," "policy," "contract," "service," or similar fee or charge made by a health carrier in consideration for a health plan is deemed part of the premium. "Premium" shall not include amounts paid as enrollee point-of-service cost-sharing. (23) "Review organization" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, health care service contractor as defined in RCW 48.44.010, or health maintenance organization as defined in RCW 48.46.020, and entities affiliated with, under contract with, or acting on behalf of a health carrier to perform a utilization review. (((13))) (24) "Small employer" means any person, firm, corporation, partnership, association, political subdivision except school districts, or self-employed individual that is actively engaged in business that, on at least fifty percent of its working days during the preceding calendar quarter, employed no more than fifty eligible employees, with a normal work week of thirty or more hours, the majority of whom were employed within this state, and is not formed primarily for purposes of buying health insurance and in which a bona fide employer-employee relationship exists. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer. Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition. The term "small employer" includes a self-employed individual or sole proprietor. The term "small employer" also includes a self-employed individual or sole proprietor who derives at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year. (25) "Utilization review" means the prospective, concurrent, or retrospective assessment of the necessity and appropriateness of the allocation of health care resources and services of a provider or facility, given or proposed to be given to an enrollee or group of enrollees. (((14))) (26) "Wellness activity" means an explicit program of an activity consistent with department of health guidelines, such as, smoking cessation, injury and accident prevention, reduction of alcohol misuse, appropriate weight reduction, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education for the purpose of improving enrollee health status and reducing health service costs. (((15) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time.)) Sec. 203. RCW 48.43.025 and 1995 c 265 s 6 are each amended to read as follows: PREEXISTING CONDITION LIMITATIONS MODIFIED. (1) Except as otherwise specified in this section and in RCW 48.43.035: (a) No carrier may reject an individual for health plan coverage based upon preexisting conditions of the individual ((and)). (b) No carrier may deny, exclude, or otherwise limit coverage for an individual's preexisting health conditions; except that a carrier may impose a three-month benefit waiting period for preexisting conditions for which medical advice was given, or for which a health care provider recommended or provided treatment within three months before the effective date of coverage. (c) Every health carrier offering any individual health plan to any individual must allow open enrollment to eligible applicants into all individual health plans offered by the carrier during the full month of July of each year. The individual health plans exempt from guaranteed continuity under RCW 48.43.035(4) are exempt from this requirement. All applications for open enrollment coverage must be complete and postmarked to or received by the carrier in the months of July or August in any year following the effective date of this section. Coverage for these applicants must begin the first day of the next month subject to receipt of timely payment consistent with the terms of the policies. (d) At any time other than the open enrollment period specified in (c) of this subsection, a carrier may either decline to accept an applicant for enrollment or apply to such applicant's coverage a preexisting condition benefit waiting period not to exceed the amount of time remaining until the next open enrollment period, or three months, whichever is greater, provided that in either case all of the following conditions are met: (i) The applicant has not maintained coverage as required in (f) of this subsection; (ii) The applicant is not applying as a newly eligible dependent meeting the requirements of (g) of this subsection; and (iii) The carrier uses uniform health evaluation criteria and practices among all individual health plans it offers. (e) If a carrier exercises the options specified in (d) of this subsection it must advise the applicant in writing within ten business days of such decision. Notice of the availability of Washington state health insurance pool coverage and a brochure outlining the benefits and exclusions of the Washington state health insurance pool policy or policies must be provided in accordance with RCW 48.41.180 to any person rejected for individual health plan coverage, who has had any health condition limited or excluded through health underwriting or who otherwise meets requirements for notice in chapter 48.41 RCW. Provided timely and complete application is received by the pool, eligible individuals shall be enrolled in the Washington state health insurance pool in an expeditious manner as determined by the board of directors of the pool. (f) A carrier may not refuse enrollment at any time based upon health evaluation criteria to otherwise eligible applicants who have been covered for any part of the three-month period immediately preceding the date of application for the new individual health plan under a comparable group or individual health benefit plan with substantially similar benefits. For purposes of this subsection, in addition to provisions in RCW 48.43.015, the following publicly administered coverage shall be considered comparable health benefit plans: The basic health plan established by chapter 70.47 RCW; the medical assistance program established by chapter 74.09 RCW; and the Washington state health insurance pool, established by chapter 48.41 RCW, as long as the person is continuously enrolled in the pool until the next open enrollment period. If the person is enrolled in the pool for less than three months, she or he will be credited for that period up to three months. (g) A carrier must accept for enrollment all newly eligible dependents of an enrollee for enrollment onto the enrollee's individual health plan at any time of the year, provided application is made within sixty-three days of eligibility, or such longer time as provided by law or contract. (h) At no time are carriers required to accept for enrollment any individual residing outside the state of Washington, except for qualifying dependents who reside outside the carrier service area. (2) No carrier may avoid the requirements of this section through the creation of a new rate classification or the modification of an existing rate classification. A new or changed rate classification will be deemed an attempt to avoid the provisions of this section if the new or changed classification would substantially discourage applications for coverage from individuals or groups who are higher than average health risks. ((These)) The provisions of this section apply only to individuals who are Washington residents. Sec. 204. RCW 48.43.035 and 1995 c 265 s 7 are each amended to read as follows: GUARANTEED ISSUE AND CONTINUITY OF COVERAGE MODIFIED. (1) ((All)) Except as otherwise specified in this section and in RCW 48.43.025, every health carrier((s)) shall accept for enrollment any state resident within the carrier's service area and provide or assure the provision of all covered services regardless of age, sex, family structure, ethnicity, race, health condition, geographic location, employment status, socioeconomic status, other condition or situation, or the provisions of RCW 49.60.174(2). The insurance commissioner may grant a temporary exemption from this subsection, if, upon application by a health carrier the commissioner finds that the clinical, financial, or administrative capacity to serve existing enrollees will be impaired if a health carrier is required to continue enrollment of additional eligible individuals. (2) Except as provided in subsection (((5))) (6) of this section, all health plans shall contain or incorporate by endorsement a guarantee of the continuity of coverage of the plan. For the purposes of this section, a plan is "renewed" when it is continued beyond the earliest date upon which, at the carrier's sole option, the plan could have been terminated for other than nonpayment of premium. In the case of group plans, the carrier may consider the group's anniversary date as the renewal date for purposes of complying with the provisions of this section. (3) The guarantee of continuity of coverage required in health plans shall not prevent a carrier from canceling or nonrenewing a health plan for: (a) Nonpayment of premium; (b) Violation of published policies of the carrier approved by the insurance commissioner; (c) Covered persons entitled to become eligible for medicare benefits by reason of age who fail to apply for a medicare supplement plan or medicare cost, risk, or other plan offered by the carrier pursuant to federal laws and regulations; (d) Covered persons who fail to pay any deductible or copayment amount owed to the carrier and not the provider of health care services; (e) Covered persons committing fraudulent acts as to the carrier; (f) Covered persons who materially breach the health plan; ((or)) (g) Change or implementation of federal or state laws that no longer permit the continued offering of such coverage; or (h) Cessation of a plan in accordance with subsection (5) or (7) of this section. (4) The provisions of this section do not apply in the following cases: (a) A carrier has zero enrollment on a product; ((or)) (b) A carrier replaces a product and the replacement product is provided to all covered persons within that class or line of business, includes all of the services covered under the replaced product, and does not significantly limit access to the kind of services covered under the replaced product. The health plan may also allow unrestricted conversion to a fully comparable product; or (c) A carrier is withdrawing from a service area or from a segment of its service area because the carrier has demonstrated to the insurance commissioner that the carrier's clinical, financial, or administrative capacity to serve enrollees would be exceeded. (5) A health carrier may discontinue or materially modify a particular health plan, only if: (a) The health carrier provides notice to each covered person or group provided coverage of this type of such discontinuation or modification at least ninety days prior to the date of the discontinuation or modification of coverage; (b) The health carrier offers to each covered person provided coverage of this type the option to purchase any other health plan currently being offered by the health carrier to similar covered persons in the market category and geographic area; and (c) In exercising the option to discontinue or modify a particular health plan and in offering the option of coverage under (b) of this subsection, the health carrier acts uniformly without regard to any health-status related factor of covered persons or persons who may become eligible for coverage. (6) The provisions of this section do not apply to health plans deemed by the insurance commissioner to be unique or limited or have a short-term purpose, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner. (7) A health carrier may discontinue all health plan coverage in one or more of the following lines of business: (a)(i) Individual; or (ii)(A) Small group (1-50 eligible employees); and (B) Large group (51+ eligible employees); (b) Only if: (i) The health carrier provides notice to the office of the insurance commissioner and to each person covered by a plan within the line of business of such discontinuation at least one hundred eighty days prior to the expiration of coverage; and (ii) All plans issued or delivered in the state by the health carrier in such line of business are discontinued, and coverage under such plans in such line of business is not renewed; and (iii) The health carrier may not issue any health plan coverage in the line of business and state involved during the five-year period beginning on the date of the discontinuation of the last health plan not so renewed. (8) The portability provisions of RCW 48.43.015 continue to apply to all enrollees whose health insurance coverage is modified or discontinued pursuant to this section. (9) Nothing in this section modifies a health carrier's responsibility to offer the basic health plan model plan as required by RCW 70.47.060(2)(d). Sec. 205. RCW 48.43.045 and 1995 c 265 s 8 are each amended to read as follows: MODIFYING CARRIER REPORTING REQUIREMENTS. Every health plan delivered, issued for delivery, or renewed by a health carrier on and after January 1, 1996, shall: (1) Permit every category of health care provider to provide health services or care for conditions included in the basic health plan services to the extent that: (a) The provision of such health services or care is within the health care providers' permitted scope of practice; and (b) The providers agree to abide by standards related to: (i) Provision, utilization review, and cost containment of health services; (ii) Management and administrative procedures; and (iii) Provision of cost-effective and clinically efficacious health services. (2) Annually report the names and addresses of all officers, directors, or trustees of the health carrier during the preceding year, and the amount of wages, expense reimbursements, or other payments to such individuals. This requirement does not apply to a foreign or alien insurer regulated under chapter 48.20 or 48.21 RCW that files a supplemental compensation exhibit in its annual statement as required by law. Sec. 206. RCW 70.47.060 and 1995 c 266 s 1 and 1995 c 2 s 4 are each reenacted and amended to read as follows: MODEL PLAN DEFINED. The administrator has the following powers and duties: (1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care. In addition, the administrator may offer as basic health plan services chemical dependency services, mental health services and organ transplant services; however, no one service or any combination of these three services shall increase the actuarial value of the basic health plan benefits by more than five percent excluding inflation, as determined by the office of financial management. All subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive (([covered basic health care services])) covered basic health care services in return for premium payments to the plan. The schedule of services shall emphasize proven preventive and primary health care and shall include all services necessary for prenatal, postnatal, and well-child care. However, with respect to coverage for groups of subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that such services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. The schedule of services shall also include a separate schedule of basic health care services for children, eighteen years of age and younger, for those subsidized or nonsubsidized enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services, the administrator shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080, and such other factors as the administrator deems appropriate. However, with respect to coverage for subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that the services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. (2)(a) To design and implement a structure of periodic premiums due the administrator from subsidized enrollees that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members. The enrollment of children shall not require the enrollment of their parent or parents who are eligible for the plan. The structure of periodic premiums shall be applied to subsidized enrollees entering the plan as individuals pursuant to subsection (9) of this section and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (10) of this section. (b) To determine the periodic premiums due the administrator from nonsubsidized enrollees. Premiums due from nonsubsidized enrollees shall be in an amount equal to the cost charged by the managed health care system provider to the state for the plan plus the administrative cost of providing the plan to those enrollees and the premium tax under RCW 48.14.0201. (c) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator, but in no case shall the payment made on behalf of the enrollee exceed the total premiums due from the enrollee. (d) To develop, as an offering by ((all)) every health carrier((s)) providing coverage identical to the basic health plan, as configured on January 1, 1996, a basic health plan model plan ((benefits package)) with uniformity in enrollee cost-sharing requirements. (3) To design and implement a structure of enrollee cost sharing due a managed health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services. (4) To limit enrollment of persons who qualify for subsidies so as to prevent an overexpenditure of appropriations for such purposes. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists. (5) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020. The level of subsidy provided to persons who qualify may be based on the lowest cost plans, as defined by the administrator. (6) To adopt a schedule for the orderly development of the delivery of services and availability of the plan to residents of the state, subject to the limitations contained in RCW 70.47.080 or any act appropriating funds for the plan. (7) To solicit and accept applications from managed health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan. The administrator shall endeavor to assure that covered basic health care services are available to any enrollee of the plan from among a selection of two or more participating managed health care systems. In adopting any rules or procedures applicable to managed health care systems and in its dealings with such systems, the administrator shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several areas of the state. Contracts with participating managed health care systems shall ensure that basic health plan enrollees who become eligible for medical assistance may, at their option, continue to receive services from their existing providers within the managed health care system if such providers have entered into provider agreements with the department of social and health services. (8) To receive periodic premiums from or on behalf of subsidized and nonsubsidized enrollees, deposit them in the basic health plan operating account, keep records of enrollee status, and authorize periodic payments to managed health care systems on the basis of the number of enrollees participating in the respective managed health care systems. (9) To accept applications from individuals residing in areas served by the plan, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan as subsidized or nonsubsidized enrollees, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and on a reasonable schedule defined by the authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If, as a result of an eligibility review, the administrator determines that a subsidized enrollee's income exceeds twice the federal poverty level and that the enrollee knowingly failed to inform the plan of such increase in income, the administrator may bill the enrollee for the subsidy paid on the enrollee's behalf during the period of time that the enrollee's income exceeded twice the federal poverty level. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they will be allowed to reenroll in the plan. (10) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a managed health care system. The administrator may require that a business owner pay at least an amount equal to what the employee pays after the state pays its portion of the subsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a managed care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating managed health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes. (11) To determine the rate to be paid to each participating managed health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same for similar enrollees, the rates negotiated with participating managed health care systems may vary among the systems. In negotiating rates with participating systems, the administrator shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area, the need to conserve the resources of the basic health plan trust account, and other factors the administrator finds relevant. (12) To monitor the provision of covered services to enrollees by participating managed health care systems in order to assure enrollee access to good quality basic health care, to require periodic data reports concerning the utilization of health care services rendered to enrollees in order to provide adequate information for evaluation, and to inspect the books and records of participating managed health care systems to assure compliance with the purposes of this chapter. In requiring reports from participating managed health care systems, including data on services rendered enrollees, the administrator shall endeavor to minimize costs, both to the managed health care systems and to the plan. The administrator shall coordinate any such reporting requirements with other state agencies, such as the insurance commissioner and the department of health, to minimize duplication of effort. (13) To evaluate the effects this chapter has on private employer-based health care coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state. (14) To develop a program of proven preventive health measures and to integrate it into the plan wherever possible and consistent with this chapter. (15) To provide, consistent with available funding, assistance for rural residents, underserved populations, and persons of color. Sec. 207. RCW 48.20.028 and 1995 c 265 s 13 are each amended to read as follows: TENURE DISCOUNTS--INDIVIDUAL DISABILITY COVERAGE. (1)(a) An insurer offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan subject to RCW 48.43.025 and 48.43.035. Nothing in this subsection shall preclude an insurer from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. An insurer offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner. (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.20.390, 48.20.393, 48.20.395, 48.20.397, 48.20.410, 48.20.411, 48.20.412, 48.20.416, and 48.20.420 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan. (2) Premiums for health benefit plans for individuals shall be calculated using the adjusted community rating method that spreads financial risk across the carrier's entire individual product population. All such rates shall conform to the following: (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for: (i) Geographic area; (ii) Family size; (iii) Age; ((and)) (iv) Tenure discounts; and (v) Wellness activities. (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty. (c) The insurer shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection. (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter. (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent. (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect: (i) Changes to the family composition; (ii) Changes to the health benefit plan requested by the individual; or (iii) Changes in government requirements affecting the health benefit plan. (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015. (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent. (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.21.045. (4) As used in this section, "health benefit plan," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005. Sec. 208. RCW 48.44.022 and 1995 c 265 s 15 are each amended to read as follows: TENURE DISCOUNTS--HEALTH CARE SERVICE CONTRACTORS. (1)(a) A health care service contractor offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan, subject to the provisions in RCW 48.43.025 and 48.43.035. Nothing in this subsection shall preclude a contractor from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A contractor offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner. (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan. (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions: (a) The health care service contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for: (i) Geographic area; (ii) Family size; (iii) Age; ((and)) (iv) Tenure discounts; and (v) Wellness activities. (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty. (c) The health care service contractor shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection. (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter. (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent. (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect: (i) Changes to the family composition; (ii) Changes to the health benefit plan requested by the individual; or (iii) Changes in government requirements affecting the health benefit plan. (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015. (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent. (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.44.023. (4) As used in this section and RCW 48.44.023 "health benefit plan," "small employer," "basic health plan," "adjusted community rates," and "wellness activities" mean the same as defined in RCW 48.43.005. Sec. 209. RCW 48.46.064 and 1995 c 265 s 17 are each amended to read as follows: TENURE DISCOUNTS--HEALTH MAINTENANCE ORGANIZATIONS. (1)(a) A health maintenance organization offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan, subject to the provisions in RCW 48.43.025 and 48.43.035. Nothing in this subsection shall preclude a health maintenance organization from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A health maintenance organization offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner. (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, ((48.26.280 [48.46.280])) 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan. (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions: (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for: (i) Geographic area; (ii) Family size; (iii) Age; ((and)) (iv) Tenure discounts; and (v) Wellness activities. (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty. (c) The health maintenance organization shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection. (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter. (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent. (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect: (i) Changes to the family composition; (ii) Changes to the health benefit plan requested by the individual; or (iii) Changes in government requirements affecting the health benefit plan. (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015. (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent. (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.46.066. (4) As used in this section and RCW 48.46.066, "health benefit plan," "basic health plan," "adjusted community rate," "small employer," and "wellness activities" mean the same as defined in RCW 48.43.005. Sec. 210. RCW 48.41.030 and 1989 c 121 s 1 are each amended to read as follows: HEALTH INSURANCE POOL--DEFINITIONS. As used in this chapter, the following terms have the meaning indicated, unless the context requires otherwise: (1) "Accounting year" means a twelve-month period determined by the board for purposes of record-keeping and accounting. The first accounting year may be more or less than twelve months and, from time to time in subsequent years, the board may order an accounting year of other than twelve months as may be required for orderly management and accounting of the pool. (2) "Administrator" means the entity chosen by the board to administer the pool under RCW 48.41.080. (3) "Board" means the board of directors of the pool. (4) "Commissioner" means the insurance commissioner. (5) "Health care facility" has the same meaning as in RCW 70.38.025. (6) "Health care provider" means any physician, facility, or health care professional, who is licensed in Washington state and entitled to reimbursement for health care services. (7) "Health care services" means services for the purpose of preventing, alleviating, curing, or healing human illness or injury. (8) "Health ((insurance)) coverage" means any group or individual disability insurance policy, health care service contract, and health maintenance agreement, except those contracts entered into for the provision of health care services pursuant to Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395 et seq. The term does not include short-term care, long-term care, dental, vision, accident, fixed indemnity, disability income contracts, civilian health and medical program for the uniform services (CHAMPUS), 10 U.S.C. 55, limited benefit or credit insurance, coverage issued as a supplement to liability insurance, insurance arising out of the worker's compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (9) "Health plan" means any arrangement by which persons, including dependents or spouses, covered or making application to be covered under this pool, have access to hospital and medical benefits or reimbursement including any group or individual disability insurance policy; health care service contract; health maintenance agreement; uninsured arrangements of group or group-type contracts including employer self-insured, cost-plus, or other benefit methodologies not involving insurance or not governed by Title 48 RCW; coverage under group-type contracts which are not available to the general public and can be obtained only because of connection with a particular organization or group; and coverage by medicare or other governmental benefits. This term includes coverage through "health ((insurance)) coverage" as defined under this section, and specifically excludes those types of programs excluded under the definition of "health ((insurance)) coverage" in subsection (8) of this section. (10) (("Insured" means any individual resident of this state who is eligible to receive benefits from any member, or other health plan. (11))) "Medical assistance" means coverage under Title XIX of the federal Social Security Act (42 U.S.C., Sec. 1396 et seq.) and chapter 74.09 RCW. (((12))) (11) "Medicare" means coverage under Title XVIII of the Social Security Act, (42 U.S.C. Sec. 1395 et seq., as amended). (((13))) (12) "Member" means any commercial insurer which provides disability insurance, any health care service contractor, and any health maintenance organization licensed under Title 48 RCW. "Member" shall also mean, as soon as authorized by federal law, employers and other entities, including a self-funding entity and employee welfare benefit plans that provide health plan benefits in this state on or after May 18, 1987. "Member" does not include any insurer, health care service contractor, or health maintenance organization whose products are exclusively dental products or those products excluded from the definition of "health ((insurance)) coverage" set forth in subsection (8) of this section. (13) "Network provider" means a health care provider who has contracted in writing with the pool administrator to accept payment from and to look solely to the pool according to the terms of the pool health plans. (14) "Plan of operation" means the pool, including articles, by-laws, and operating rules, adopted by the board pursuant to RCW 48.41.050. (15) "Point of service plan" means a benefit plan offered by the pool under which a covered person may elect to receive covered services from network providers, or nonnetwork providers at a reduced rate of benefits. (16) "Pool" means the Washington state health insurance pool as created in RCW 48.41.040. (((16))) (17) "Substantially equivalent health plan" means a "health plan" as defined in subsection (9) of this section which, in the judgment of the board or the administrator, offers persons including dependents or spouses covered or making application to be covered by this pool an overall level of benefits deemed approximately equivalent to the minimum benefits available under this pool. Sec. 211. RCW 48.41.060 and 1989 c 121 s 3 are each amended to read as follows: HEALTH INSURANCE POOL--BOARD POWERS MODIFIED. The board shall have the general powers and authority granted under the laws of this state to insurance companies, health care service contractors, and health maintenance organizations, licensed or registered to ((transact)) offer or provide the kinds of ((insurance)) health coverage defined under this title. In addition thereto, the board may: (1) Enter into contracts as are necessary or proper to carry out the provisions and purposes of this chapter including the authority, with the approval of the commissioner, to enter into contracts with similar pools of other states for the joint performance of common administrative functions, or with persons or other organizations for the performance of administrative functions; (2) Sue or be sued, including taking any legal action as necessary to avoid the payment of improper claims against the pool or the coverage provided by or through the pool; (3) Establish appropriate rates, rate schedules, rate adjustments, expense allowances, agent referral fees, claim reserve formulas and any other actuarial functions appropriate to the operation of the pool. Rates shall not be unreasonable in relation to the coverage provided, the risk experience, and expenses of providing the coverage. Rates and rate schedules may be adjusted for appropriate risk factors such as age and area variation in claim costs and shall take into consideration appropriate risk factors in accordance with established actuarial underwriting practices consistent with Washington state small group plan rating requirements under RCW 48.20.028, 48.44.022, and 48.46.064; (4) Assess members of the pool in accordance with the provisions of this chapter, and make advance interim assessments as may be reasonable and necessary for the organizational or interim operating expenses. Any interim assessments will be credited as offsets against any regular assessments due following the close of the year; (5) Issue policies of ((insurance)) health coverage in accordance with the requirements of this chapter; (6) Appoint appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the pool, policy, and other contract design, and any other function within the authority of the pool; and (7) Conduct periodic audits to assure the general accuracy of the financial data submitted to the pool, and the board shall cause the pool to have an annual audit of its operations by an independent certified public accountant. Sec. 212. RCW 48.41.080 and 1989 c 121 s 5 are each amended to read as follows: HEALTH INSURANCE POOL--ADMINISTRATOR'S POWER MODIFIED. The board shall select an administrator from the membership of the pool whether domiciled in this state or another state through a competitive bidding process to administer the pool. (1) The board shall evaluate bids based upon criteria established by the board, which shall include: (a) The administrator's proven ability to handle ((accident and health insurance)) health coverage; (b) The efficiency of the administrator's claim-paying procedures; (c) An estimate of the total charges for administering the plan; and (d) The administrator's ability to administer the pool in a cost-effective manner. (2) The administrator shall serve for a period of three years subject to removal for cause. At least six months prior to the expiration of each three-year period of service by the administrator, the board shall invite all interested parties, including the current administrator, to submit bids to serve as the administrator for the succeeding three-year period. Selection of the administrator for this succeeding period shall be made at least three months prior to the end of the current three-year period. (3) The administrator shall perform such duties as may be assigned by the board including: (a) All eligibility and administrative claim payment functions relating to the pool; (b) Establishing a premium billing procedure for collection of premiums from ((insured)) covered persons. Billings shall be made on a periodic basis as determined by the board, which shall not be more frequent than a monthly billing; (c) Performing all necessary functions to assure timely payment of benefits to covered persons under the pool including: (i) Making available information relating to the proper manner of submitting a claim for benefits to the pool, and distributing forms upon which submission shall be made; ((and)) (ii) Taking steps necessary to offer and administer managed care benefit plans; and (iii) Evaluating the eligibility of each claim for payment by the pool; (d) Submission of regular reports to the board regarding the operation of the pool. The frequency, content, and form of the report shall be as determined by the board; (e) Following the close of each accounting year, determination of net paid and earned premiums, the expense of administration, and the paid and incurred losses for the year and reporting this information to the board and the commissioner on a form as prescribed by the commissioner. (4) The administrator shall be paid as provided in the contract between the board and the administrator for its expenses incurred in the performance of its services. Sec. 213. RCW 48.41.110 and 1987 c 431 s 11 are each amended to read as follows: HEALTH INSURANCE POOL--BENEFITS MODIFIED. (1) The pool is authorized to offer one or more managed care plans of coverage. Such plans may, but are not required to, include point of service features that permit participants to receive in-network benefits or out-of-network benefits subject to differential cost shares. Covered persons enrolled in the pool on January 1, 1997, may continue coverage under the pool plan in which they are enrolled on that date. However, the pool may incorporate managed care features into such existing plans. (2) The administrator shall prepare a brochure outlining the benefits and exclusions of the pool policy in plain language. After approval by the board of directors, such brochure shall be made reasonably available to participants or potential participants. The health insurance policy issued by the pool shall pay only usual, customary, and reasonable charges for medically necessary eligible health care services rendered or furnished for the diagnosis or treatment of illnesses, injuries, and conditions which are not otherwise limited or excluded. Eligible expenses are the usual, customary, and reasonable charges for the health care services and items for which benefits are extended under the pool policy. Such benefits shall at minimum include, but not be limited to, the following services or related items: (a) Hospital services, including charges for the most common semiprivate room, for the most common private room if semiprivate rooms do not exist in the health care facility, or for the private room if medically necessary, but limited to a total of one hundred eighty inpatient days in a calendar year, and limited to thirty days inpatient care for mental and nervous conditions, or alcohol, drug, or chemical dependency or abuse per calendar year; (b) Professional services including surgery for the treatment of injuries, illnesses, or conditions, other than dental, which are rendered by a health care provider, or at the direction of a health care provider, by a staff of registered or licensed practical nurses, or other health care providers; (c) The first twenty outpatient professional visits for the diagnosis or treatment of one or more mental or nervous conditions or alcohol, drug, or chemical dependency or abuse rendered during a calendar year by one or more physicians, psychologists, or community mental health professionals, or, at the direction of a physician, by other qualified licensed health care practitioners, in the case of mental or nervous conditions, and rendered by a state certified chemical dependency program approved under chapter 70.96A RCW, in the case of alcohol, drug, or chemical dependency or abuse; (d) Drugs and contraceptive devices requiring a prescription; (e) Services of a skilled nursing facility, excluding custodial and convalescent care, for not more than one hundred days in a calendar year as prescribed by a physician; (f) Services of a home health agency; (g) Chemotherapy, radioisotope, radiation, and nuclear medicine therapy; (h) Oxygen; (i) Anesthesia services; (j) Prostheses, other than dental; (k) Durable medical equipment which has no personal use in the absence of the condition for which prescribed; (l) Diagnostic x-rays and laboratory tests; (m) Oral surgery limited to the following: Fractures of facial bones; excisions of mandibular joints, lesions of the mouth, lip, or tongue, tumors, or cysts excluding treatment for temporomandibular joints; incision of accessory sinuses, mouth salivary glands or ducts; dislocations of the jaw; plastic reconstruction or repair of traumatic injuries occurring while covered under the pool; and excision of impacted wisdom teeth; (n) Maternity care services, as provided in the managed care plan to be designed by the pool board of directors, and for which no preexisting condition waiting periods may apply; (o) Services of a physical therapist and services of a speech therapist; (((o))) (p) Hospice services; (((p))) (q) Professional ambulance service to the nearest health care facility qualified to treat the illness or injury; and (((q))) (r) Other medical equipment, services, or supplies required by physician's orders and medically necessary and consistent with the diagnosis, treatment, and condition. (((2))) (3) The board shall design and employ cost containment measures and requirements such as, but not limited to, care coordination, provider network limitations, preadmission certification, and concurrent inpatient review which may make the pool more cost-effective. (((3))) (4) The pool benefit policy may contain benefit limitations, exceptions, and ((reductions)) cost shares such as copayments, coinsurance, and deductibles that are consistent with managed care products, except that differential cost shares may be adopted by the board for nonnetwork providers under point of service plans. The pool benefit policy cost shares and limitations must be consistent with those that are generally included in health ((insurance)) plans ((and are)) approved by the insurance commissioner; however, no limitation, exception, or reduction may be ((approved)) used that would exclude coverage for any disease, illness, or injury. (5) The pool may not reject an individual for health plan coverage based upon preexisting conditions of the individual or deny, exclude, or otherwise limit coverage for an individual's preexisting health conditions; except that it may impose a three-month benefit waiting period for preexisting conditions for which medical advice was given, or for which a health care provider recommended or provided treatment, within three months before the effective date of coverage. The pool may not avoid the requirements of this section through the creation of a new rate classification or the modification of an existing rate classification. Sec. 214. RCW 48.41.200 and 1987 c 431 s 20 are each amended to read as follows: HEALTH INSURANCE POOL--RATE MODIFIED. The pool shall determine the standard risk rate by calculating the average group standard rate for groups comprised of up to ((ten)) fifty persons charged by the five largest members offering coverages in the state comparable to the pool coverage. In the event five members do not offer comparable coverage, the standard risk rate shall be established using reasonable actuarial techniques and shall reflect anticipated experience and expenses for such coverage. Maximum rates for pool coverage shall be one hundred fifty percent for the indemnity health plan and one hundred twenty-five percent for managed care plans of the rates established as applicable for group standard risks in groups comprised of up to ((ten)) fifty persons((. All rates and rate schedules shall be submitted to the commissioner for approval)). Sec. 215. RCW 48.41.130 and 1987 c 431 s 13 are each amended to read as follows: HEALTH INSURANCE POOL--SUBSTANTIAL EQUIVALENT CLARIFIED. All policy forms issued by the pool shall conform in substance to prototype forms developed by the pool, and shall in all other respects conform to the requirements of this chapter, and shall be filed with and approved by the commissioner before they are issued. The pool shall not issue a pool policy to any individual who, on the effective date of the coverage applied for, already has or would have coverage substantially equivalent to a pool policy as an insured or covered dependent, or who would be eligible for such coverage if he or she elected to obtain it at a lesser premium rate. However, coverage provided by the basic health plan, as established pursuant to chapter 70.47 RCW, shall not be deemed substantially equivalent for the purposes of this section. NEW SECTION. Sec. 216. A new section is added to chapter 48.44 RCW to read as follows: LOSS RATIOS--HEALTH CARE SERVICE CONTRACTORS. (1) For purposes of RCW 48.44.020(2)(d), benefits in a contract shall be deemed reasonable in relation to the amount charged provided that the anticipated loss ratio is at least: (a) Sixty-five percent for individual subscriber contract forms; (b) Seventy percent for franchise plan contract forms; (c) Eighty percent for group contract forms other than small group contract forms; and (d) Seventy-five percent for small group contract forms. (2) With the approval of the commissioner, contract, rider, and endorsement forms that provide substantially similar coverage may be combined for the purpose of determining the anticipated loss ratio. (3) A health care service contractor may charge the rate for prepayment of health care services in any contract identified in RCW 48.44.020(1) upon filing of the rate with the commissioner. If the commissioner disapproves the rate, the commissioner shall explain in writing the specific reasons for the disapproval. A health care service contractor may continue to charge such rate pending a final order in any hearing held under chapters 48.04 and 34.05 RCW, or if applicable, pending a final order in any appeal. Any amount charged that is determined in a final order on appeal to be unreasonable in relation to the benefits provided is subject to refund. (4) For the purposes of this section: (a) "Anticipated loss ratio" means the ratio of all anticipated claims or costs for the delivery of covered health care services including incurred but not reported claims and costs and medical management costs to premium minus any applicable taxes. (b) "Small group contract form" means a form offered to a small employer as defined in RCW 48.43.005(24). NEW SECTION. Sec. 217. A new section is added to chapter 48.46 RCW to read as follows: LOSS RATIOS--HEALTH MAINTENANCE ORGANIZATIONS. (1) For purposes of RCW 48.46.060(3)(d), benefits shall be deemed reasonable in relation to the amount charged provided that the anticipated loss ratio is at least: (a) Sixty-five percent for individual subscriber contract forms; (b) Seventy percent for franchise plan contract forms; (c) Eighty percent for group contract forms other than small group contract forms; and (d) Seventy-five percent for small group contract forms. (2) With the approval of the commissioner, contract, rider, and endorsement forms that provide substantially similar coverage may be combined for the purpose of determining the anticipated loss ratio. (3) A health maintenance organization may charge the rate for prepayment of health care services in any contract identified in RCW 48.46.060(1) upon filing of the rate with the commissioner. If the commissioner disapproves the rate, the commissioner shall explain in writing the specific reasons for the disapproval. A health maintenance organization may continue to charge such rate pending a final order in any hearing held under chapters 48.04 and 34.05 RCW, or if applicable, pending a final order in any appeal. Any amount charged that is determined in a final order on appeal to be unreasonable in relation to the benefits provided is subject to refund. (4) For the purposes of this section: (a) "Anticipated loss ratio" means the ratio of all anticipated claims or costs for the delivery of covered health care services including incurred but not reported claims and costs and medical management costs to premium minus any applicable taxes. (b) "Small group contract form" means a form offered to a small employer as defined in RCW 48.43.005(24). NEW SECTION. Sec. 218. A new section is added to chapter 48.21 RCW to read as follows: LOSS RATIOS--GROUPS' DISABILITY COVERAGE. The following standards and requirements apply to group and blanket disability insurance policy forms and manual rates: (1) Specified disease group insurance shall generate at least a seventy-five percent loss ratio regardless of the size of the group. (2) Group disability insurance, other than specified disease insurance, as to which the insureds pay all or substantially all of the premium shall generate loss ratios no lower than those set forth in the following table.

Number of Certificate Holders Minimum Overall

at Issue, Renewal, or Rerating Loss Ratio

9 or less 60%

10 to 24 65% 25 to 49 70% 50 to 99 75% 100 or more 80%

(4) The calculating period may vary with the benefit and premium provisions. The company may be required to demonstrate the reasonableness of the calculating period chosen by the actuary responsible for the premium calculations. (5) A request for a rate increase submitted at the end of the calculating period shall include a comparison of the actual to the expected loss ratios and shall employ any accumulation of reserves in the determination of rates for the selected calculating period and account for the maintenance of such reserves for future needs. The request for the rate increase shall be further documented by the expected loss ratio for the new calculating period. (6) A request for a rate increase submitted during the calculating period shall include a comparison of the actual to the expected loss ratios, a demonstration of any contributions to or support from the reserves, and shall account for the maintenance of such reserves for future needs. If the experience justifies a premium increase it shall be deemed that the calculating period has prematurely been brought to an end. The rate increase shall further be documented by the expected loss ratio for the next calculating period. (7) The commissioner may approve a series of two or three smaller rate increases in lieu of one larger increase. These should be calculated to reduce the lapses and antiselection that often result from large rate increases. A demonstration of such calculations, whether for a single rate increase or a series of smaller rate increases, satisfactory to the commissioner, shall be attached to the filing. (8) Companies shall review their experience periodically and file appropriate rate revisions in a timely manner to reduce the necessity of later filing of exceptionally large rate increases. (9) The definitions in section 221 of this act and the provisions in section 220 of this act apply to this section. NEW SECTION. Sec. 219. A new section is added to chapter 48.20 RCW to read as follows: LOSS RATIOS--INDIVIDUAL DISABILITY COVERAGE. The following standards and requirements apply to individual disability insurance forms: (1) The overall loss ratio shall be deemed reasonable in relation to the premiums if the overall loss ratio is at least sixty percent over a calculating period chosen by the insurer and satisfactory to the commissioner. (2) The calculating period may vary with the benefit and renewal provisions. The company may be required to demonstrate the reasonableness of the calculating period chosen by the actuary responsible for the premium calculations. A brief explanation of the selected calculating period shall accompany the filing. (3) Policy forms, the benefits of which are particularly exposed to the effects of inflation and whose premium income may be particularly vulnerable to an eroding persistency and other similar forces, shall use a relatively short calculating period reflecting the uncertainties of estimating the risks involved. Policy forms based on more dependable statistics may employ a longer calculating period. The calculating period may be the lifetime of the contract for guaranteed renewable and noncancellable policy forms if such forms provide benefits that are supported by reliable statistics and that are protected from inflationary or eroding forces by such factors as fixed dollar coverages, inside benefit limits, or the inherent nature of the benefits. The calculating period may be as short as one year for coverages that are based on statistics of minimal reliability or that are highly exposed to inflation. (4) A request for a rate increase to be effective at the end of the calculating period shall include a comparison of the actual to the expected loss ratios, shall employ any accumulation of reserves in the determination of rates for the new calculating period, and shall account for the maintenance of such reserves for future needs. The request for the rate increase shall be further documented by the expected loss ratio for the new calculating period. (5) A request for a rate increase submitted during the calculating period shall include a comparison of the actual to the expected loss ratios, a demonstration of any contributions to and support from the reserves, and shall account for the maintenance of such reserves for future needs. If the experience justifies a premium increase it shall be deemed that the calculating period has prematurely been brought to an end. The rate increase shall further be documented by the expected loss ratio for the next calculating period. (6) The commissioner may approve a series of two or three smaller rate increases in lieu of one large increase. These should be calculated to reduce lapses and anti-selection that often result from large rate increases. A demonstration of such calculations, whether for a single rate increase or for a series of smaller rate increases, satisfactory to the commissioner, shall be attached to the filing. (7) Companies shall review their experience periodically and file appropriate rate revisions in a timely manner to reduce the necessity of later filing of exceptionally large rate increases. NEW SECTION. Sec. 220. A new section is added to chapter 48.20 RCW to read as follows: LOSS RATIOS--DISABILITY COVERAGE EXEMPTIONS. Sections 218 and 219 of this act apply to all insurers and to every disability insurance policy form filed for approval in this state after the effective date of this section, except: (1) Additional indemnity and premium waiver forms for use only in conjunction with life insurance policies; (2) Medicare supplement policy forms that are regulated by chapter 48.66 RCW; (3) Credit insurance policy forms issued pursuant to chapter 48.34 RCW; (4) Group policy forms other than: (a) Specified disease policy forms; (b) Policy forms, other than loss of income forms, as to which all or substantially all of the premium is paid by the individuals insured thereunder; (c) Policy forms, other than loss of income forms, for issue to single employers insuring less than one hundred employees; (5) Policy forms filed by health care service contractors or health maintenance organizations; (6) Policy forms initially approved, including subsequent requests for rate increases and modifications of rate manuals. NEW SECTION. Sec. 221. A new section is added to chapter 48.20 RCW to read as follows: LOSS RATIOS--DISABILITY COVERAGE DEFINITIONS. (1) The "expected loss ratio" is a prospective calculation and shall be calculated as the projected "benefits incurred" divided by the projected "premiums earned" and shall be based on the actuary's best projections of the future experience within the "calculating period." (2) The "actual loss ratio" is a retrospective calculation and shall be calculated as the "benefits incurred" divided by the "premiums earned," both measured from the beginning of the "calculating period" to the date of the loss ratio calculations. (3) The "overall loss ratio" shall be calculated as the "benefits incurred" divided by the "premiums earned" over the entire "calculating period" and may involve both retrospective and prospective data. (4) The "calculating period" is the time span over which the actuary expects the premium rates, whether level or increasing, to remain adequate in accordance with his or her best estimate of future experience and during which the actuary does not expect to request a rate increase. (5) The "benefits incurred" is the "claims incurred" plus any increase, or less any decrease, in the "reserves." (6) The "claims incurred" means: (a) Claims paid during the accounting period; plus (b) The change in the liability for claims that have been reported but not paid; plus (c) The change in the liability for claims that have not been reported but which may reasonably be expected. The "claims incurred" does not include expenses incurred in processing the claims, home office or field overhead, acquisition and selling costs, taxes or other expenses, contributions to surplus, or profit. (7) The "reserves," as referred to in sections 218 and 219 of this act include: (a) Active life disability reserves; (b) Additional reserves whether for a specific liability purpose or not; (c) Contingency reserves; (d) Reserves for select morbidity experience; and (e) Increased reserves that may be required by the commissioner. (8) The "premiums earned" means the premiums, less experience credits, refunds, or dividends, applicable to an accounting period whether received before, during, or after such period. (9) Renewal provisions are defined as follows: (a) "Guaranteed renewable" means renewal cannot be declined by the insurance company for any reason, but the insurance company can revise rates on a class basis. (b) "Noncancellable" means renewal cannot be declined nor can rates be revised by the insurance company.

PART III--BENEFITS AND SERVICE DELIVERY

NEW SECTION. Sec. 301. A new section is added to chapter 48.43 RCW to read as follows: EMERGENCY MEDICAL SERVICES. (1) When conducting a review of the necessity and appropriateness of emergency services or making a benefit determination for emergency services: (a) A health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. In addition, a health carrier shall not require prior authorization of such services provided prior to the point of stabilization if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. With respect to care obtained from a nonparticipating hospital emergency department, a health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson would have reasonably believed that use of a participating hospital emergency department would result in a delay that would worsen the emergency, or if a provision of federal, state, or local law requires the use of a specific provider or facility. In addition, a health carrier shall not require prior authorization of such services provided prior to the point of stabilization if a prudent layperson acting reasonably would have believed that an emergency medical condition existed and that use of a participating hospital emergency department would result in a delay that would worsen the emergency. (b) If an authorized representative of a health carrier authorizes coverage of emergency services, the health carrier shall not subsequently retract its authorization after the emergency services have been provided, or reduce payment for an item or service furnished in reliance on approval, unless the approval was based on a material misrepresentation about the covered person's health condition made by the provider of emergency services. (c) Coverage of emergency services may be subject to applicable copayments, coinsurance, and deductibles, and a health carrier may impose reasonable differential cost-sharing arrangements for emergency services rendered by nonparticipating providers, if such differential between cost-sharing amounts applied to emergency services rendered by participating provider versus nonparticipating provider does not exceed fifty dollars. Differential cost sharing for emergency services may not be applied when a covered person presents to a nonparticipating hospital emergency department rather than a participating hospital emergency department when the health carrier requires preauthorization for postevaluation or poststabilization emergency services if: (i) Due to circumstances beyond the covered person's control, the covered person was unable to go to a participating hospital emergency department in a timely fashion without serious impairment to the covered person's health; or (ii) A prudent layperson possessing an average knowledge of health and medicine would have reasonably believed that he or she would be unable to go to a participating hospital emergency department in a timely fashion without serious impairment to the covered person's health. (d) If a health carrier requires preauthorization for postevaluation or poststabilization services, the health carrier shall provide access to an authorized representative twenty-four hours a day, seven days a week, to facilitate review. In order for postevaluation or poststabilization services to be covered by the health carrier, the provider or facility must make a documented good faith effort to contact the covered person's health carrier within thirty minutes of stabilization, if the covered person needs to be stabilized. The health carrier's authorized representative is required to respond to a telephone request for preauthorization from a provider or facility within thirty minutes. Failure of the health carrier to respond within thirty minutes constitutes authorization for the provision of immediately required medically necessary postevaluation and poststabilization services, unless the health carrier documents that it made a good faith effort but was unable to reach the provider or facility within thirty minutes after receiving the request. (e) A health carrier shall immediately arrange for an alternative plan of treatment for the covered person if a nonparticipating emergency provider and health plan cannot reach an agreement on which services are necessary beyond those immediately necessary to stabilize the covered person consistent with state and federal laws. (2) Nothing in this section is to be construed as prohibiting the health carrier from requiring notification within the time frame specified in the contract for inpatient admission or as soon thereafter as medically possible but no less than twenty-four hours. Nothing in this section is to be construed as preventing the health carrier from reserving the right to require transfer of a hospitalized covered person upon stabilization. Follow-up care that is a direct result of the emergency must be obtained in accordance with the health plan's usual terms and conditions of coverage. All other terms and conditions of coverage may be applied to emergency services.

PART IV--MISCELLANEOUS

NEW SECTION. Sec. 401. WICKLINE CLAUSE STUDY. (1) There is some question regarding who should be liable when a health carrier or other third-party payer refuses to pay for or provide health services recommended by a health care provider and the patient suffers injury as a result of not receiving the recommended care. This issue typically arises in managed care systems, which integrate the financing and delivery of health care services to covered persons through selected providers. Contracts between a health carrier and a provider may address potential liability issues regarding the relationship between the carrier and the provider. Some contracts shift potential liability for a health carrier's decision not to pay for recommended health services to the provider or patient through what are commonly referred to as "Wickline clauses." These clauses generally state it is a medical decision between the provider and patient as to whether the patient receives services that the carrier refuses to cover; this ignores the fact that the decision not to provide coverage influences the decision of the patient whether to receive the recommended care. The legislature intends to review the policy questions raised by this issue, particularly to what extent the carrier should be able to avoid liability for its decisions by insulating itself through its contracts with providers. (2) A joint task force on Wickline clauses shall review the practice of contractually assigning or avoiding potential liability for decisions by a health carrier or other third-party payer not to pay for health care services recommended by a health care provider. The task force shall be comprised of two members of the house of representatives appointed by the speaker of the house, one from each major caucus, two members of the senate appointed by the president of the senate, one from each major caucus, and eight persons appointed by the legislative members of the task force. The eight nonlegislative persons on the task force shall consist of: Two representatives of health care providers; two representatives of health care consumers; two representatives of health carriers; and two representatives of self-funded health plans. The legislative members shall organize and administer the task force. Staffing shall be provided by the office of program research and senate committee services. (3) The task force shall report to the health care committees of the legislature by December 1, 1997. The report shall discuss the policy issues regarding Wickline clauses and the more general issue of potential liability for decisions of a health carrier and others not to cover health care recommended by the provider. The report may contain recommendations for the legislature to consider. NEW SECTION. Sec. 402. COMMON TITLE. This act shall be known as the consumer assistance and insurance market stabilization act. NEW SECTION. Sec. 403. Part headings and section captions used in this act are not part of the law. NEW SECTION. Sec. 404. SEVERABILITY CLAUSE. 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. 405. EFFECTIVE DATES. (1) Sections 104 through 108 and 301 of this act take effect January 1, 1998. (2) Section 111 of this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 1997. (3) Section 205 of this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its eexisting public institutions, and takes effect immediately."

MOTIONS

On motion of Senator Deccio, the following title amendment was adopted:

On page 1, line 1 of the title, after "reform;" strike the remainder of the title and insert "amending RCW 48.43.055, 48.43.005, 48.43.025, 48.43.035, 48.43.045, 48.20.028, 48.44.022, 48.46.064, 48.41.030, 48.41.060, 48.41.080, 48.41.110, 48.41.200, and 48.41.130; reenacting and amending RCW 70.47.060; adding new sections to chapter 48.43 RCW; adding a new section to chapter 74.09 RCW; adding a new section to chapter 48.44 RCW; adding a new section to chapter 48.46 RCW; adding a new section to chapter 48.21 RCW; adding new sections to chapter 48.20 RCW; creating new sections; repealing RCW 48.46.100; providing effective dates; and declaring an emergency." On motion of Senator Deccio, the rules were suspended, Engrossed Substitute House Bill No. 2018, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

POINT OF INQUIRY

Senator Haugen: "Senator Deccio, I have a constituent who has an individual health insurance policy. My constituent also has been treated for cancer. What provisions are included in Engrossed House Bill No. 2018 to ensure that necessary benefits will continue to be available so long as the premium is paid?"

Senator Deccio: "Engrossed Substitute House Bill No. 2018 provides many protections for individuals like your constituent. First, Engrossed Substitute House Bill No. 2018 makes no change to the current law relating to portability of benefits. Individuals with coverage may freely move from a health plan offered by one insurer to any other similar plan offered by that insurer or any other insurer.

"Additionally, Engrossed Substitute House Bill No. 2018 provides that if a carrier intends to modify a health plan, the benefits extended in the subsequent plan must have an overall value that is within fifteen percent of the value of the prior plan. Carriers must also continue to offer the Model BHP plan. This plan contains good benefits and must be available to any individual."

Further debate ensued.

CALL FOR THE PREVIOUS QUESTION

Senators Johnson, McDonald and Deccio called for the previous question and the demand was sustained.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 2018, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2018, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 30; Nays, 19; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hargrove, Haugen, Hochstatter, Horn, Jacobsen, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 30. Voting nay: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Heavey, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Sheldon, Snyder, Spanel, Swanson, Thibaudeau and Wojahn - 19. ENGROSSED SUBSTITUTE HOUSE BILL NO. 2018, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Johnson, Engrossed Substitute House Bill No. 2018, as amended by the Senate, was immediately transmitted to the House of Representatives.

SECOND READING

SECOND SUBSTITUTE HOUSE BILL NO. 1201, by House Committee on Appropriations (originally sponsored by Representatives Buck, Johnson, Sheldon, Blalock, Regala, Linville, Hatfield, Kessler, Tokuda, Anderson, Morris, Zellinsky, Dunn, Conway, Doumit, Ogden, Grant, Mastin, Butler and Murray)

Providing for reauthorization of assistance to areas impacted by the rural natural resources crisis.

The bill was read the second time.

MOTION

Senator Hargrove moved that the following amendments by Senators Hargrove, Morton, Anderson and Snyder be considered simultaneously and be adopted:

On page 4, line 31, after "defined in" strike "RCW 43.31.601" and insert "((RCW 43.31.601)) this section" Beginning on page 5, line 38, after "employment" strike all material through "and" on page 6, line 2, and insert "((, resided in or was employed in a rural natural resources impact area defined in RCW 43.31.601 and determined by the office of financial management and the employment security department)) resides in a county with an unemployment rate for 1996 at least twenty percent or more above the state average and at least fifteen percent above their own county unemployment rate in 1988 and the county meets one of the following two criteria: (A) It is a county with a lumber and woods products employment quotient at least three times the state average and has experienced actual job losses in these industries since 1988 of one hundred jobs or more or fifty or more jobs in a county with a population of forty thousand or less; or (B) It is a county with a commercial salmon fishing employment quotient at least three times the state average and has experienced actual job losses in this industry since 1988 of one hundred jobs or more or fifty or more jobs in a county with a population of forty thousand or less; and (I) The exhaustee has during his or her base year earned wages of at least one thousand hours; and (II) The exhaustee is determined by the employment security department in consultation with its labor market and economic analysis division to be a displaced worker; or" On page 6, beginning on line 3, after "least" strike "six hundred eighty" and insert "((six hundred eighty)) one thousand" On page 6, line 17, after "unlikely" insert ", in the determination of the employment security department in consultation with its labor market and economic analysis division," On page 6, line 31, after "training." insert "By April 1, 1998, the employment security department must redetermine a new list of eligible and ineligible counties based on a comparison of 1988 and 1997 employment rates. Any changed eligibility status will apply only to new claims for regular unemployment insurance effective after April 1, 1998." Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senators Hargrove, Morton, Anderson and Snyder on pages 4, 5, and 6, to Second Substitute House Bill No. 1201.

The motion by Senator Hargrove carried and the amendments were adopted.

MOTION

Senator Spanel moved that the following amendment by Senators Spanel and Swanson be adopted:

On page 6, line 2, after "department;" strike "((or)) and" and insert "or" Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senators Spanel and Swanson on page 6, line 2, to Second Substitute House Bill No. 1201.

The motion by Senator Spanel failed and the amendment was not adopted.

MOTION

On motion of Senator Schow, the rules were suspended, Second Substitute House Bill No. 1201, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

POINT OF INQUIRY

Senator Hargrove: “Senator Anderson, will this bill as amended, reduce or restrict the benefits of current training participants?”

Senator Anderson: “No, Senator Hargrove. This bill will apply to workers filing new claims for regular benefits that begin after the effective date of this bill.”

The President declared the question before the Senate to be the roll call on the final passage of Second Substitute House Bill No. 1201, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Second Substitute House Bill No. 1201, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 49. SECOND SUBSTITUTE HOUSE BILL NO. 1201, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1303, by House Committee on Appropriations (originally sponsored by Representatives Hickel, Johnson, Talcott, Smith, Backlund, McMorris, Radcliff, Thompson, Clements, Sheahan, B. Thomas, D. Schmidt, L. Thomas, Huff, Crouse, Robertson, Schoesler, Pennington, Cooke, Sullivan, Mitchell, Kastama, Dyer, Cairnes, Sump, Sterk, McDonald and Koster)

Changing education provisions.

The bill was read the second time.

MOTION

On motion of Senator Finkbeiner, the following Committee on Education amendment was not adopted:

Strike everything after the enacting clause and insert the following: "NEW SECTION. Sec. 1. As we face a more complex society and increasing demands are placed on schools and the educational services they provide for children, it is important that school districts are provided with flexibility to determine how best to work within their communities to ensure students are meeting high academic standards. It is the intent of the legislature to allow schools to approach their educational mission with both increased flexibility and accountability that will assist them in better meeting the needs of the students in their district. NEW SECTION. Sec. 2. A new section is added to chapter 28A.320 RCW to read as follows: (1) As provided in sections 3 through 20 of this act, the board of directors of each school district may grant waivers, or partial waivers, of state laws and rules to schools within the district. The school board shall grant waivers in accordance with this section. (2) To apply for waivers, a school principal must prepare an application to the board of directors that identifies which laws and rules are being requested for waiver and the rationale for the request. The rationale must identify how granting the waivers will improve student learning or the delivery of education services in the school. The application must include evidence that the school's teachers, classified employees, site council, parents, and students, as appropriate, are committed to working cooperatively in implementing the waiver. (3) The school board shall provide for public review and comment regarding the waiver request. (4) The duration, renewal, and rescission of the waivers shall be determined by the school district board of directors. The renewal of a waiver shall be subject to the review process by the superintendent of public instruction and the state board of education as provided in subsection (7) of this section. (5) The following may not be waived, unless otherwise provided by law: (a) Laws and rules pertaining to health, safety, and civil rights; (b) Provisions of the basic education act relating to certificated instructional staff ratios, RCW 28A.150.100; goals, RCW 28A.150.210; funding allocations, formulas, and definitions, RCW 28A.150.250 and 28A.150.260; and salary and compensation minimum amounts and limitations, RCW 28A.400.200; (c) The essential academic learning requirements being developed by the commission on student learning in RCW 28A.630.885; (d) The assessment, accountability, and reporting requirements in RCW 28A.230.190, the fourth grade standardized test; RCW 28A.230.230, the eighth grade standardized test; RCW 28A.230.240, the eleventh grade standardized test; RCW 28A.630.885, assessment requirements as developed by the commission on student learning; and RCW 28A.320.205, the annual performance report; (e) Requirements in RCW 28A.150.220 pertaining to the total number of program hours that must be offered; (f) State and federal financial reporting and auditing requirements; (g) State constitutional requirements; and (h) Certification and other requirements in chapter 28A.410 RCW. (6) A school district may not include provisions in a collective bargaining agreement that limit the district's authority to grant waivers under this section. (7) School district boards of directors granting waivers to state laws and rules shall certify to the superintendent of public instruction that they have a waiver review process in effect and shall transmit to the superintendent of public instruction and the state board of education a list of laws and rules that have been waived in accordance with this section and a description of the process used in considering the waivers. The superintendent of public instruction and the state board of education shall review the waivers of state laws and rules within their respective jurisdictions. The waivers shall be approved by the superintendent of public instruction or the state board of education, as appropriate, if the school district board of directors complied with the requirements of this section. The superintendent of public instruction or state board of education, as appropriate, shall approve or deny the waiver request, in whole or in part, within forty calendar days of receiving the list of waivers. If the district receives no response from either the superintendent of public instruction or the state board of education after forty days, the waiver shall be deemed uncontested. If a waiver is contested by the superintendent of public instruction or the state board of education, either as appropriate, may make recommendations to the district that will assist the district in accomplishing the goal sought through the waiver. The state board of education may delegate the responsibility for reviewing and approving or denying the waivers to its staff if an appeal procedure to the board is provided. (8) School district boards of directors granting waivers shall report annually to the superintendent of public instruction the impact on student learning or delivery of education services resulting from the waivers granted. (9) The superintendent of public instruction and state board of education shall report to the legislature by November 1, 2000, the laws and rules that have been waived in accordance with this section. (10) This section expires June 30, 1999. NEW SECTION. Sec. 3. A new section is added to chapter 28A.150 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 4. A new section is added to chapter 28A.155 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. School districts may not waive the district's obligation to meet all federal statutes applicable to the education of individuals with disabilities. (2) This section expires June 30, 1999. NEW SECTION. Sec. 5. A new section is added to chapter 28A.165 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 6. A new section is added to chapter 28A.175 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 7. A new section is added to chapter 28A.180 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 8. A new section is added to chapter 28A.185 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 9. A new section is added to chapter 28A.220 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 10. A new section is added to chapter 28A.225 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 11. A new section is added to chapter 28A.230 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 12. A new section is added to chapter 28A.235 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 13. A new section is added to chapter 28A.300 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 14. A new section is added to chapter 28A.305 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 15. A new section is added to chapter 28A.320 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. No waivers may be obtained from section 2 of this act. (2) This section expires June 30, 1999. NEW SECTION. Sec. 16. A new section is added to chapter 28A.330 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 17. A new section is added to chapter 28A.400 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 18. A new section is added to chapter 28A.405 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 19. A new section is added to chapter 28A.600 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 20. A new section is added to chapter 28A.640 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. Sec. 21. RCW 28A.405.100 and 1994 c 115 s 1 are each amended to read as follows: (1) The superintendent of public instruction shall establish and may amend from time to time minimum criteria for the evaluation of the professional performance capabilities and development of certificated classroom teachers and certificated support personnel. For classroom teachers the criteria shall be developed in the following categories: Instructional skill; classroom management, professional preparation and scholarship; effort toward improvement when needed; the handling of student discipline and attendant problems; and interest in teaching pupils and knowledge of subject matter. Every board of directors shall, in accordance with procedure provided in RCW 41.59.010 through 41.59.170, 41.59.910 and 41.59.920, establish evaluative criteria and procedures for all certificated classroom teachers and certificated support personnel. The evaluative criteria must contain as a minimum the criteria established by the superintendent of public instruction pursuant to this section and must be prepared within six months following adoption of the superintendent of public instruction's minimum criteria. The district must certify to the superintendent of public instruction that evaluative criteria have been so prepared by the district. Except as provided in subsection (5) of this section, it shall be the responsibility of a principal or his or her designee to evaluate all certificated personnel in his or her school. During each school year all classroom teachers and certificated support personnel, hereinafter referred to as "employees" in this section, shall be observed for the purposes of evaluation at least twice in the performance of their assigned duties. Total observation time for each employee for each school year shall be not less than sixty minutes. Following each observation, or series of observations, the principal or other evaluator shall promptly document the results of the observation in writing, and shall provide the employee with a copy thereof within three days after such report is prepared. New employees shall be observed at least once for a total observation time of thirty minutes during the first ninety calendar days of their employment period. ((Every)) At any time after October 15th, an employee whose work is judged unsatisfactory based on district evaluation criteria shall be notified in writing of ((stated)) the specific areas of deficiencies along with a ((suggested specific and)) reasonable program for improvement ((on or before February 1st of each year)). During the period of probation, the employee may not be transferred from the supervision of the original evaluator. Improvement of performance or probable cause for nonrenewal must occur and be documented by the original evaluator before any consideration of a request for transfer or reassignment as contemplated by either the individual or the school district. A probationary period of sixty school days shall be established ((beginning on or before February 1st and ending no later than May 1st)). The establishment of a probationary period does not adversely affect the contract status of an employee within the meaning of RCW 28A.405.300. The purpose of the probationary period is to give the employee opportunity to demonstrate improvements in his or her areas of deficiency. The establishment of the probationary period and the giving of the notice to the employee of deficiency shall be by the school district superintendent and need not be submitted to the board of directors for approval. During the probationary period the evaluator shall meet with the employee at least twice monthly to supervise and make a written evaluation of the progress, if any, made by the employee. The evaluator may authorize one additional certificated employee to evaluate the probationer and to aid the employee in improving his or her areas of deficiency; such additional certificated employee shall be immune from any civil liability that might otherwise be incurred or imposed with regard to the good faith performance of such evaluation. The probationer may be removed from probation if he or she has demonstrated improvement to the satisfaction of the principal in those areas specifically detailed in his or her initial notice of deficiency and subsequently detailed in his or her improvement program. Lack of necessary improvement ((shall be)) during the established probationary period, as specifically documented in writing with notification to the probationer and shall constitute grounds for a finding of probable cause under RCW 28A.405.300 or 28A.405.210. ((The establishment of a probationary period shall not be deemed to adversely affect the contract status of an employee within the meaning of RCW 28A.405.300.)) Immediately following the completion of a probationary period that does not produce performance changes detailed in the initial notice of deficiencies and improvement program, the employee may be removed from his or her assignment and placed into an alternative assignment for the remainder of the school year. This reassignment may not displace another employee nor may it adversely affect the probationary employee's compensation or benefits for the remainder of the employee's contract year. If such reassignment is not possible, the district may, at its option, place the employee on paid leave for the balance of the contract term. (2) Every board of directors shall establish evaluative criteria and procedures for all superintendents, principals, and other administrators. It shall be the responsibility of the district superintendent or his or her designee to evaluate all administrators. Such evaluation shall be based on the administrative position job description. Such criteria, when applicable, shall include at least the following categories: Knowledge of, experience in, and training in recognizing good professional performance, capabilities and development; school administration and management; school finance; professional preparation and scholarship; effort toward improvement when needed; interest in pupils, employees, patrons and subjects taught in school; leadership; and ability and performance of evaluation of school personnel. (3) Each certificated employee shall have the opportunity for confidential conferences with his or her immediate supervisor on no less than two occasions in each school year. Such confidential conference shall have as its sole purpose the aiding of the administrator in his or her assessment of the employee's professional performance. (4) The failure of any evaluator to evaluate or supervise or cause the evaluation or supervision of certificated employees or administrators in accordance with this section, as now or hereafter amended, when it is his or her specific assigned or delegated responsibility to do so, shall be sufficient cause for the nonrenewal of any such evaluator's contract under RCW 28A.405.210, or the discharge of such evaluator under RCW 28A.405.300. (5) After an employee has four years of satisfactory evaluations under subsection (1) of this section, a school district may use a short form of evaluation, a locally bargained evaluation emphasizing professional growth, an evaluation under subsection (1) of this section, or any combination thereof. The short form of evaluation shall include either a thirty minute observation during the school year with a written summary or a final annual written evaluation based on the criteria in subsection (1) of this section and based on at least two observation periods during the school year totaling at least sixty minutes without a written summary of such observations being prepared. However, the evaluation process set forth in subsection (1) of this section shall be followed at least once every three years unless this time is extended by a local school district under the bargaining process set forth in chapter 41.59 RCW. The employee or evaluator may require that the evaluation process set forth in subsection (1) of this section be conducted in any given school year. No evaluation other than the evaluation authorized under subsection (1) of this section may be used as a basis for determining that an employee's work is unsatisfactory under subsection (1) of this section or as probable cause for the nonrenewal of an employee's contract under RCW 28A.405.210 unless an evaluation process developed under chapter 41.59 RCW determines otherwise. (6) This section expires June 30, 1999. Sec. 22. RCW 41.59.935 and 1990 c 33 s 571 are each amended to read as follows: Nothing in this chapter shall be construed to grant employers or employees the right to reach agreements regarding: (1) Salary or compensation increases in excess of those authorized in accordance with RCW 28A.150.410 and 28A.400.200; or (2) Limiting the employer's authority to grant waivers under section 2 of this act. (3) This section expires June 30, 1999. Sec. 23. RCW 28A.630.945 and 1995 c 208 s 1 are each amended to read as follows: (1) The state board of education, where appropriate, or the superintendent of public instruction, where appropriate, may grant waivers to districts from the provisions of statutes or rules relating to: The length of the school year; student-to-teacher ratios; and other administrative rules that in the opinion of the state board of education or the opinion of the superintendent of public instruction may need to be waived in order for a district to implement a plan for restructuring its educational program or the educational program of individual schools within the district. (2) School districts may use the application process in RCW 28A.305.140 or 28A.300.138 to apply for the waivers under subsection (1) of this section. (3) ((The joint select committee on education restructuring shall study which waivers of state laws or rules are necessary for school districts to implement education restructuring. The committee shall study whether the waivers are used to implement specific essential academic learning requirements and student learning goals. The committee shall study the availability of waivers under the schools for the twenty-first century program created by chapter 525, Laws of 1987, and the use of those waivers by schools participating in that program. The committee shall also study the use of waivers authorized under RCW 28A.305.140. The committee shall report its findings to the legislature by December 1, 1997)) This section expires June 30, 1999. NEW SECTION. Sec. 24. The superintendent of public instruction, in collaboration with school district personnel and the state board of education, shall conduct a study to identify additional actions that can be taken to increase flexibility for individual schools and school districts. The study shall review the superintendent of public instruction's rule-making process, the granting of waivers from provisions of collective bargaining agreements, and other policies and practices that reduce school and school district flexibility. The study shall be submitted to the education committees of the senate and house of representatives by December 1, 1997."

MOTIONS

Senator Hochstatter moved that the following amendment by Senators Hochstatter and Finkbeiner be adopted:

Strike everything after the enacting clause and insert the following: "NEW SECTION. Sec. 1. As we face a more complex society and increasing demands are placed on schools and the educational services they provide for children, it is important that school districts are provided with flexibility to determine how best to work within their communities to ensure students are meeting high academic standards. It is the intent of the legislature to allow schools to approach their educational mission with both increased flexibility and accountability that will assist them in better meeting the needs of the students in their district. NEW SECTION. Sec. 2. A new section is added to chapter 28A.320 RCW to read as follows: (1) As provided in sections 3 through 20 of this act, the board of directors of each school district may grant waivers, or partial waivers, of state laws and rules to schools within the district. The school board shall grant waivers in accordance with this section. (2) To apply for waivers, a school principal must prepare an application to the board of directors that identifies which laws and rules are being requested for waiver and the rationale for the request. The rationale must identify how granting the waivers will improve student learning or the delivery of education services in the school. The application must include evidence that the school's teachers, classified employees, site council, parents, and students, as appropriate, are committed to working cooperatively in implementing the waiver. (3) The school board shall provide for public review and comment regarding the waiver request. (4) The duration, renewal, and rescission of the waivers shall be determined by the school district board of directors. The renewal of a waiver shall be subject to the review process by the superintendent of public instruction and the state board of education as provided in subsection (7) of this section. (5) The following may not be waived: (a) Laws and rules pertaining to health, safety, and civil rights; (b) Provisions of the basic education act relating to certificated instructional staff ratios, RCW 28A.150.100, except for waivers provided in accordance with RCW 28A.630.945; goals, RCW 28A.150.210; funding allocations, formulas, and definitions, RCW 28A.150.250 and 28A.150.260, except for waivers provided in accordance with RCW 28A.150.250; and salary and compensation minimum amounts and limitations, RCW 28A.400.200; (c) The essential academic learning requirements being developed by the commission on student learning in RCW 28A.630.885; (d) The assessment, accountability, and reporting requirements in RCW 28A.230.190, the fourth grade standardized test; RCW 28A.230.230, the eighth grade standardized test; RCW 28A.230.240, the eleventh grade standardized test; RCW 28A.630.885, assessment requirements as developed by the commission on student learning; and RCW 28A.320.205, the annual performance report; (e) Requirements in RCW 28A.150.220 pertaining to the total number of program hours that must be offered, except for waivers provided in accordance with RCW 28A.305.140; (f) State and federal financial reporting and auditing requirements; (g) State constitutional requirements; and (h) Certification and other requirements in chapter 28A.410 RCW. (6) A school district may not include provisions in a collective bargaining agreement that limit the district's authority to grant waivers under this section. (7) School district boards of directors granting waivers to state laws and rules shall certify to the superintendent of public instruction that they have a waiver review process in effect and shall transmit to the superintendent of public instruction and the state board of education a list of laws and rules that have been waived in accordance with this section and a description of the process used in considering the waivers. The superintendent of public instruction and the state board of education shall review the waivers of state laws and rules within their respective jurisdictions. The waivers shall be approved by the superintendent of public instruction or the state board of education, as appropriate, if the school district board of directors complied with the requirements of this section. The superintendent of public instruction or state board of education, as appropriate, shall approve or deny the waiver request, in whole or in part, within forty calendar days of receiving the list of waivers. If the district receives no response from either the superintendent of public instruction or the state board of education after forty days, the waiver shall be deemed uncontested. If a waiver is contested by the superintendent of public instruction or the state board of education, either as appropriate, may make recommendations to the district that will assist the district in accomplishing the goal sought through the waiver. The state board of education may delegate the responsibility for reviewing and approving or denying the waivers to its staff if an appeal procedure to the board is provided. (8) School district boards of directors granting waivers shall report annually to the superintendent of public instruction the impact on student learning or delivery of education services resulting from the waivers granted. (9) The superintendent of public instruction and state board of education shall report to the legislature by November 1, 2000, the laws and rules that have been waived in accordance with this section. (10) This section expires June 30, 1999. NEW SECTION. Sec. 3. A new section is added to chapter 28A.150 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 4. A new section is added to chapter 28A.155 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools, except that the statutory requirements of RCW 28A.155.105 and RCW 28A.155.115 may not be waived. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements, except that any rules adopted to implement RCW 28A.155.105 and RCW 28A.155.115 may not be waived. School districts may not waive the district's obligation to meet all federal statutes applicable to the education of individuals with disabilities. (2) This section expires June 30, 1999. NEW SECTION. Sec. 5. A new section is added to chapter 28A.165 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 6. A new section is added to chapter 28A.175 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 7. A new section is added to chapter 28A.180 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 8. A new section is added to chapter 28A.185 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 9. A new section is added to chapter 28A.220 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 10. A new section is added to chapter 28A.225 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 11. A new section is added to chapter 28A.230 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 12. A new section is added to chapter 28A.235 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 13. A new section is added to chapter 28A.300 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 14. A new section is added to chapter 28A.305 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 15. A new section is added to chapter 28A.320 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. No waivers may be obtained from section 2 of this act. (2) This section expires June 30, 1999. NEW SECTION. Sec. 16. A new section is added to chapter 28A.330 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 17. A new section is added to chapter 28A.400 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 18. A new section is added to chapter 28A.405 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 19. A new section is added to chapter 28A.600 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. NEW SECTION. Sec. 20. A new section is added to chapter 28A.640 RCW to read as follows: (1) Schools may obtain, in accordance with section 2 of this act, waivers from the statutory requirements in this chapter that pertain to the instructional program, operation, and management of schools. Waivers also may be obtained, in accordance with section 2 of this act, from any rules of the state board of education and superintendent of public instruction adopted to implement the statutory requirements. (2) This section expires June 30, 1999. Sec. 21. RCW 28A.405.100 and 1994 c 115 s 1 are each amended to read as follows: (1) The superintendent of public instruction shall establish and may amend from time to time minimum criteria for the evaluation of the professional performance capabilities and development of certificated classroom teachers and certificated support personnel. For classroom teachers the criteria shall be developed in the following categories: Instructional skill; classroom management, professional preparation and scholarship; effort toward improvement when needed; the handling of student discipline and attendant problems; and interest in teaching pupils and knowledge of subject matter. Every board of directors shall, in accordance with procedure provided in RCW 41.59.010 through 41.59.170, 41.59.910 and 41.59.920, establish evaluative criteria and procedures for all certificated classroom teachers and certificated support personnel. The evaluative criteria must contain as a minimum the criteria established by the superintendent of public instruction pursuant to this section and must be prepared within six months following adoption of the superintendent of public instruction's minimum criteria. The district must certify to the superintendent of public instruction that evaluative criteria have been so prepared by the district. Except as provided in subsection (5) of this section, it shall be the responsibility of a principal or his or her designee to evaluate all certificated personnel in his or her school. During each school year all classroom teachers and certificated support personnel, hereinafter referred to as "employees" in this section, shall be observed for the purposes of evaluation at least twice in the performance of their assigned duties. Total observation time for each employee for each school year shall be not less than sixty minutes. Following each observation, or series of observations, the principal or other evaluator shall promptly document the results of the observation in writing, and shall provide the employee with a copy thereof within three days after such report is prepared. New employees shall be observed at least once for a total observation time of thirty minutes during the first ninety calendar days of their employment period. ((Every)) At any time after October 15th, an employee whose work is judged unsatisfactory based on district evaluation criteria shall be notified in writing of ((stated)) the specific areas of deficiencies along with a ((suggested specific and)) reasonable program for improvement ((on or before February 1st of each year)). During the period of probation, the employee may not be transferred from the supervision of the original evaluator. Improvement of performance or probable cause for nonrenewal must occur and be documented by the original evaluator before any consideration of a request for transfer or reassignment as contemplated by either the individual or the school district. A probationary period of sixty school days shall be established ((beginning on or before February 1st and ending no later than May 1st)). The establishment of a probationary period does not adversely affect the contract status of an employee within the meaning of RCW 28A.405.300. The purpose of the probationary period is to give the employee opportunity to demonstrate improvements in his or her areas of deficiency. The establishment of the probationary period and the giving of the notice to the employee of deficiency shall be by the school district superintendent and need not be submitted to the board of directors for approval. During the probationary period the evaluator shall meet with the employee at least twice monthly to supervise and make a written evaluation of the progress, if any, made by the employee. The evaluator may authorize one additional certificated employee to evaluate the probationer and to aid the employee in improving his or her areas of deficiency; such additional certificated employee shall be immune from any civil liability that might otherwise be incurred or imposed with regard to the good faith performance of such evaluation. The probationer may be removed from probation if he or she has demonstrated improvement to the satisfaction of the principal in those areas specifically detailed in his or her initial notice of deficiency and subsequently detailed in his or her improvement program. Lack of necessary improvement ((shall be)) during the established probationary period, as specifically documented in writing with notification to the probationer and shall constitute grounds for a finding of probable cause under RCW 28A.405.300 or 28A.405.210. ((The establishment of a probationary period shall not be deemed to adversely affect the contract status of an employee within the meaning of RCW 28A.405.300.)) Immediately following the completion of a probationary period that does not produce performance changes detailed in the initial notice of deficiencies and improvement program, the employee may be removed from his or her assignment and placed into an alternative assignment for the remainder of the school year. This reassignment may not displace another employee nor may it adversely affect the probationary employee's compensation or benefits for the remainder of the employee's contract year. If such reassignment is not possible, the district may, at its option, place the employee on paid leave for the balance of the contract term. (2) Every board of directors shall establish evaluative criteria and procedures for all superintendents, principals, and other administrators. It shall be the responsibility of the district superintendent or his or her designee to evaluate all administrators. Such evaluation shall be based on the administrative position job description. Such criteria, when applicable, shall include at least the following categories: Knowledge of, experience in, and training in recognizing good professional performance, capabilities and development; school administration and management; school finance; professional preparation and scholarship; effort toward improvement when needed; interest in pupils, employees, patrons and subjects taught in school; leadership; and ability and performance of evaluation of school personnel. (3) Each certificated employee shall have the opportunity for confidential conferences with his or her immediate supervisor on no less than two occasions in each school year. Such confidential conference shall have as its sole purpose the aiding of the administrator in his or her assessment of the employee's professional performance. (4) The failure of any evaluator to evaluate or supervise or cause the evaluation or supervision of certificated employees or administrators in accordance with this section, as now or hereafter amended, when it is his or her specific assigned or delegated responsibility to do so, shall be sufficient cause for the nonrenewal of any such evaluator's contract under RCW 28A.405.210, or the discharge of such evaluator under RCW 28A.405.300. (5) After an employee has four years of satisfactory evaluations under subsection (1) of this section, a school district may use a short form of evaluation, a locally bargained evaluation emphasizing professional growth, an evaluation under subsection (1) of this section, or any combination thereof. The short form of evaluation shall include either a thirty minute observation during the school year with a written summary or a final annual written evaluation based on the criteria in subsection (1) of this section and based on at least two observation periods during the school year totaling at least sixty minutes without a written summary of such observations being prepared. However, the evaluation process set forth in subsection (1) of this section shall be followed at least once every three years unless this time is extended by a local school district under the bargaining process set forth in chapter 41.59 RCW. The employee or evaluator may require that the evaluation process set forth in subsection (1) of this section be conducted in any given school year. No evaluation other than the evaluation authorized under subsection (1) of this section may be used as a basis for determining that an employee's work is unsatisfactory under subsection (1) of this section or as probable cause for the nonrenewal of an employee's contract under RCW 28A.405.210 unless an evaluation process developed under chapter 41.59 RCW determines otherwise. (6) This section expires June 30, 1999. Sec. 22. RCW 41.59.935 and 1990 c 33 s 571 are each amended to read as follows: (1) Nothing in this chapter shall be construed to grant employers or employees the right to reach agreements regarding: (a) Salary or compensation increases in excess of those authorized in accordance with RCW 28A.150.410 and 28A.400.200; or (b) Limiting the employer's authority to grant waivers under section 2 of this act. (2) This section expires June 30, 1999. Sec. 23. RCW 28A.630.945 and 1995 c 208 s 1 are each amended to read as follows: (1) The state board of education, where appropriate, or the superintendent of public instruction, where appropriate, may grant waivers to districts from the provisions of statutes or rules relating to: The length of the school year; student-to-teacher ratios; and other administrative rules that in the opinion of the state board of education or the opinion of the superintendent of public instruction may need to be waived in order for a district to implement a plan for restructuring its educational program or the educational program of individual schools within the district. (2) School districts may use the application process in RCW 28A.305.140 or 28A.300.138 to apply for the waivers under subsection (1) of this section. (3) ((The joint select committee on education restructuring shall study which waivers of state laws or rules are necessary for school districts to implement education restructuring. The committee shall study whether the waivers are used to implement specific essential academic learning requirements and student learning goals. The committee shall study the availability of waivers under the schools for the twenty-first century program created by chapter 525, Laws of 1987, and the use of those waivers by schools participating in that program. The committee shall also study the use of waivers authorized under RCW 28A.305.140. The committee shall report its findings to the legislature by December 1, 1997)) This section expires June 30, 1999. NEW SECTION. Sec. 24. The superintendent of public instruction, in collaboration with school district personnel and the state board of education, shall conduct a study to identify additional actions that can be taken to increase flexibility for individual schools and school districts. The study shall review the superintendent of public instruction's rule-making process, the granting of waivers from provisions of collective bargaining agreements, and other policies and practices that reduce school and school district flexibility. The study shall be submitted to the education committees of the senate and house of representatives by December 1, 1997." On motion of Senator Long, the following amendments by Senators Long and Hochstatter to the striking amendment by Senators Hochstatter and Finkbeiner were considered simultaneously and were adopted:

On page 3, line 36, after "schools" insert the following: ", except that the statutory requirements of RCW 28A.155.105 and RCW 28A.155.115 may not be waived" On page 4, line 2, after "requirements" insert the following:", except that any rules adopted to implement RCW 28A.155.105 and RCW 28A.155.115 may not be waived" The President declared the question before the Senate to be the adoption of the striking amendment by Senators Hochstatter and Finkbeiner, as amended, to Engrossed Second Substitute House Bill No. 1303.

The striking amendment, as amended, was adopted.

MOTIONS

On motion of Senator Finkbeiner, the following title amendment was adopted:

On page 1, line 1 of the title, after "education;" strike the remainder of the title and insert "amending RCW 28A.405.100, 41.59.935, and 28A.630.945; adding new sections to chapter 28A.320 RCW; adding a new section to chapter 28A.150 RCW; adding a new section to chapter 28A.155 RCW; adding a new section to chapter 28A.165 RCW; adding a new section to chapter 28A.175 RCW; adding a new section to chapter 28A.180 RCW; adding a new section to chapter 28A.185 RCW; adding a new section to chapter 28A.220 RCW; adding a new section to chapter 28A.225 RCW; adding a new section to chapter 28A.230 RCW; adding a new section to chapter 28A.235 RCW; adding a new section to chapter 28A.300 RCW; adding a new section to chapter 28A.305 RCW; adding a new section to chapter 28A.330 RCW; adding a new section to chapter 28A.400 RCW; adding a new section to chapter 28A.405 RCW; adding a new section to chapter 28A.600 RCW; adding a new section to chapter 28A.640 RCW; creating new sections; and providing expiration dates." On motion of Senator Finkbeiner, the rules were suspended, Engrossed Second Substitute House Bill No. 1303, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Second Substitute House Bill No. 1303, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Second Substitute House Bill No. 1303, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 25; Nays, 24; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hargrove, Heavey, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Roach, Rossi, Sellar, Stevens, Strannigan, Swecker, West, Winsley and Wood - 25. Voting nay: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Haugen, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Prince, Rasmussen, Schow, Sheldon, Snyder, Spanel, Swanson, Thibaudeau, Wojahn and Zarelli - 24. ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1303, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 2267, by Representative Huff, H. Sommers, Hatfield, Kessler, Lambert, Ogden, Dickerson, Kenney and Wensman (by request of Office of Financial Management)

Creating the disaster response account.

The bill was read the second time.

MOTION

On motion of Senator West, the rules were suspended, House Bill No. 2267 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 2267.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 2267 and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 2; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 47. Absent: Senators Hochstatter and McCaslin - 2. HOUSE BILL NO. 2267, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

PARLIAMENTARY INQUIRY

Senator Snyder: “Mr. President, under the provisions of Rule 15, we are supposed to have ninety minutes for lunch and so I think I probably should make a motion to recess for lunch until 1:53 p.m.”

REPLY BY THE PRESIDENT

President Owen: “Senator Snyder, was that a motion? You said 'should.'”

Senator Snyder: “Well, I guess I will.”

President Owen: “Senator Snyder--”

Senator Snyder: “ Under the circumstances, I think it would cause a greater melt-down than we already have--if we go to lunch--so I would move to suspend Rule 15.”

President Owen: “Senator Snyder has moved to suspend Rule 15. If there are no objections, so ordered.”

EDITOR'S NOTE: Rule 15 states, 'The senate shall convene at 10:00 a.m. each working day, unless adjourned to a different hour. The senate shall adjourn not later than 10:00 p.m. of each working day. The senate shall recess ninety minutes for lunch each working day. When reconvening on the same day the senate shall recess ninety minutes for dinner each working evening. This rule may be suspended by a majority.'

MOTIONS

On motion of Senator Hale, Senator McCaslin was excused.

On motion of Senator Franklin, Senators Bauer and Prentice were excused.

SECOND READING

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1850, by House Committee on Appropriations (originally sponsored by Representatives Dyer, Backlund, Skinner, Talcott, Schoesler, Mitchell and Cooke)

Adopting the long-term care reorganization and standards of care reform act.

The bill was read the second time.

PARLIAMENTARY INQUIRY

Senator Snyder: “Mr. President, I am concerned about the process here. This is a bill that didn't go to a policy committee; it hasn't gone to the Ways and Means Committee. It is, I believe, on the volume two list, which came out of Rules at a late date and we have had no chance to caucus on this bill. I understand it is a long-term care bill and I think it is just a complete circumvention of the legislative process and I highly object to the bill being in front of us without any briefing by staff in committee or in the Ways and Means Committee and without an opportunity to find out what is in the bill before we have the opportunity to vote on it.”

MOTION

On motion of Senator Johnson, further consideration of Engrossed Second Substitute House Bill No. 1850 was deferred.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 2097, by House Committee on Financial Institutions and Insurance (originally sponsored by Representative L. Thomas)

Regulating the investment practices of insurance companies.

The bill was read the second time.

MOTIONS

On motion of Senator Heavey, the following amendment by Senators Heavey, Winsley and Hale was adopted:

On page 1, line 12, after "insurance commissioner;" insert (b) Derivative instruments shall not be used for speculative purposes, but only as stated in subsection (1)(a);" Renumber the sections consecutively and correct any internal references accordingly On motion of Senator Hale, the rules were suspended, Substitute House Bill No. 2097, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 2097, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 2097, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 45; Nays, 0; Absent, 1; Excused, 3.

Voting yea: Senators Anderson, Benton, Brown, Deccio, Fairley, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McDonald, Morton, Newhouse, Oke, Patterson, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 45. Absent: Senator Finkbeiner - 1. Excused: Senators Bauer, McCaslin and Prentice - 3. SUBSTITUTE HOUSE BILL NO. 2097, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 2227, by House Committee on Commerce and Labor (originally sponsored by Representatives Clements and McMorris)

Establishing requirements for health services providers under industrial insurance.

The bill was read the second time.

MOTIONS

On motion of Senator Horn, the following Committee on Commerce and Labor amendment was adopted:

On page 2, line 23, strike "class C felony" and insert "gross misdemeanor" On motion of Senator Horn, the rules were suspended, Substitute House Bill No. 2227, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

MOTIONS

On motion of Senator Hale, Senators Finkbeiner and Prince were excused.

On motion of Senator Franklin, Senator Fairley was excused.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 2227, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 2227, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 42; Nays, 0; Absent, 1; Excused, 6.

Voting yea: Senators Anderson, Benton, Brown, Deccio, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McDonald, Morton, Newhouse, Oke, Patterson, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 42. Absent: Senator Heavey - 1. Excused: Senators Bauer, Fairley, Finkbeiner, McCaslin, Prentice and Prince - 6. SUBSTITUTE HOUSE BILL NO. 2227, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

President Pro Tempore Newhouse assumed the Chair.

SECOND READING

HOUSE BILL NO. 1708, by Representative McMorris

Eliminating farm implement commissioned salespeople from the minimum rate of compensation for employment in excess of a forty-hour work week requirement.

The bill was read the second time.

MOTIONS

Senator Heavey moved that the following Committee on Commerce and Labor amendment be adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 49.46.130 and 1995 c 5 s 1 are each amended to read as follows: (1) Except as otherwise provided in this section and section 2 of this act, no employer shall employ any of his employees for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. (2) This section does not apply to: (a) Any person exempted pursuant to RCW 49.46.010(5). The payment of compensation or provision of compensatory time off in addition to a salary shall not be a factor in determining whether a person is exempted under RCW 49.46.010(5)(c); (b) Employees who request compensating time off in lieu of overtime pay; (c) Any individual employed as a seaman whether or not the seaman is employed on a vessel other than an American vessel; (d) Seasonal employees who are employed at concessions and recreational establishments at agricultural fairs, including those seasonal employees employed by agricultural fairs, within the state provided that the period of employment for any seasonal employee at any or all agricultural fairs does not exceed fourteen working days a year; (e) Any individual employed as a motion picture projectionist if that employee is covered by a contract or collective bargaining agreement which regulates hours of work and overtime pay; (f) An individual employed as a truck or bus driver who is subject to the provisions of the Federal Motor Carrier Act (49 U.S.C. Sec. 3101 et seq. and 49 U.S.C. Sec. 10101 et seq.), if the compensation system under which the truck or bus driver is paid includes overtime pay, reasonably equivalent to that required by this subsection, for working longer than forty hours per week; (g) 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; or (iii) 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; (h) Any industry in which federal law provides for an overtime payment based on a work week other than forty hours. However, the provisions of the federal law regarding overtime payment based on a work week other than forty hours shall nevertheless apply to employees covered by this section without regard to the existence of actual federal jurisdiction over the industrial activity of the particular employer within this state. For the purposes of this subsection, "industry" means a trade, business, industry, or other activity, or branch, or group thereof, in which individuals are gainfully employed (section 3(h) of the Fair Labor Standards Act of 1938, as amended (Public Law 93-259). (3) No employer of commissioned salespeople primarily engaged in the business of selling automobiles, trucks, recreational vessels, recreational vessel trailers, recreational vehicle trailers, recreational campers, ((or)) manufactured housing, or farm implements to ultimate purchasers shall violate subsection (1) of this section with respect to such commissioned salespeople if the commissioned salespeople are paid the greater of: (a) Compensation at the hourly rate, which may not be less than the rate required under RCW 49.46.020, for each hour worked up to forty hours per week, and compensation of one and one-half times that hourly rate for all hours worked over forty hours in one week; or (b) A straight commission, a salary plus commission, or a salary plus bonus applied to gross salary. (4) No public agency shall be deemed to have violated subsection (1) of this section with respect to the employment of any employee in fire protection activities or any employee in law enforcement activities (including security personnel in correctional institutions) if: (a) In a work period of twenty-eight consecutive days the employee receives for tours of duty which in the aggregate exceed two hundred forty hours; or (b) in the case of such an employee to whom a work period of at least seven but less than twenty-eight days applies, in his or her work period the employee receives for tours of duty which in the aggregate exceed a number of hours which bears the same ratio to the number of consecutive days in his or her work period as two hundred forty hours bears to twenty-eight days; compensation at a rate not less than one and one-half times the regular rate at which he or she is employed. NEW SECTION. Sec. 2. A new section is added to chapter 49.46 RCW to read as follows: RCW 49.46.130(1) does not apply to any individual employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer software field who, if compensated on an hourly basis, is compensated at a rate of not less than twenty-seven dollars and sixty-three cents an hour, and whose primary duty is: (1) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications; (2) The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; (3) The design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or (4) A combination of duties described in subsections (1), (2), and (3) of this section, the performance of which requires the same level of skills." Senator Fraser moved that the following amendment to the Committee on Commerce and Labor striking amendment be adopted:

On page 2, after "(g)" on line 3, strike all material through "(h)" on line 19 and insert the following: "((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; or (iii) 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; (h)))" Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

MOTION

On motion of Senator Johnson, further consideration of House Bill No. 1708 was deferred.

MOTION

On motion of Senator Sellar, Senator Deccio was excused.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2276, by House Committee on Law and Justice (originally sponsored by Representatives Lisk, Huff and Sheahan)

Promoting civil legal services for indigent persons.

The bill was read the second time.

MOTION

Senator Roach moved that the following amendment by Senators Roach, Sellar, Swecker, Zarelli, Rossi, Stevens and Heavey be adopted:

On page 2, line 16, after "(c)" strike "((public))" and insert "public" Debate ensued.

Senator Kline demanded a roll call and the demand was sustained.

The President Pro Tempore declared the question before the Senate to be the roll call on the adoption of the amendment by Senators Roach, Sellar, Swecker, Zarelli, Rossi, Stevens and Heavey on page 2, line 16, to Engrossed Substitute House Bill No. 2276.

ROLL CALL

The Secretary called the roll and the amendment was not adopted by the following vote: Yeas, 19; Nays, 27; Absent, 0; Excused, 3.

Voting yea: Senators Anderson, Benton, Finkbeiner, Hale, Hochstatter, Horn, McDonald, Morton, Newhouse, Oke, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West and Zarelli - 19. Voting nay: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Hargrove, Haugen, Heavey, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, Patterson, Prentice, Rasmussen, Sheldon, Snyder, Spanel, Swanson, Thibaudeau, Winsley, Wojahn and Wood - 27. Excused: Senators Deccio, McCaslin and Prince - 3.

MOTION

On motion of Senator Roach, the rules were suspended, Engrossed Substitute House Bill No. 2276 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

MOTIONS

On motion of Senator Spanel, Senator Sheldon was excused.

On motion of Senator Franklin, Senator Wojahn was excused.

The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 2276.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2276 and the bill passed the Senate by the following vote: Yeas, 45; Nays, 0; Absent, 0; Excused, 4.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wood and Zarelli - 45. Excused: Senators Deccio, McCaslin, Sheldon and Wojahn - 4. ENGROSSED SUBSTITUTE HOUSE BILL NO. 2276, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

President Owen assumed the Chair.

MOTION

On motion of Senator Hale, Senators Roach, Schow and Benton were excused.

` There being no objection, the Senate resumed consideration of Engrossed Second Substitute House Bill No. 1850, deferred earlier today after the bill was read the second time.

MOTION

Senator Deccio moved that the following amendments be considered simultaneously and be adopted:

On page 3, line 16, after "disease" insert "including chemical dependency" On page 3, line 34, after "disease," insert "chemical dependency," Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senator Deccio on page 3, lines 16 and 34 Engrossed Second Substitute House Bill No. 1850.

The motion by Senator Deccio carried and the amendments were adopted

MOTIONS

On motion of Senator Deccio, the following amendments were considered simultaneously and were adopted:

On page 4, line 38, after "persons;" strike "and" On page 5, line 3, after "system" insert "; (h) Describe current facilities and services that provide long-term care to all types of chronically disabled individuals in the state including Revised Code of Washington requirements, Washington Administrative Code rules, allowable occupancy, typical clientele, discharge practices, agency oversight, rates, eligibility requirements, entry process, social and health services and other services provided, staffing standards, and physical plant standards; (i) Determine the extent to which the current long-term care system meets the health and safety needs of the state's long-term care population and is appropriate for the specific and identified needs of the residents in all settings; (j) Assess the adequacy of the discharge and referral process in protecting the health and safety of long-term care clients; (k) Determine the extent to which training and supervision of direct care staff are adequate to ensure safety and appropriate care; (l) Identify opportunities for consolidation between categories of care; and (m) Determine if payment rates are adequate to cover the varying costs of clients with different levels of need" On motion of Senator Deccio, the following amendments were considered simultaneously and were adopted:

On page 6, line 23, after "with" strike "fewer than six" and insert "six or fewer" On page 20, line 37, after "violated," strike "are" and insert "shall be" On page 24, line 4, after "RCW" strike "18.20.160" and insert "18.20.190" On page 26, line 2, after "violated," strike "are" and insert "shall be" On page 34, line 33, after "rules" insert ", including emergency rules,"

MOTIONS

On motion of Senator Deccio, the rules were suspended, Engrossed Second Substitute House Bill No. 1850, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Second Substitute House Bill No. 1850, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Second Substitute House Bill No. 1850, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 41; Nays, 0; Absent, 4; Excused, 4.

Voting yea: Senators Anderson, Bauer, Brown, Deccio, Fairley, Franklin, Fraser, Goings, Hale, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Rossi, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, Winsley, Wojahn, Wood and Zarelli - 41. Absent: Senators Finkbeiner, Hargrove, McDonald and West - 4. Excused: Senators Benton, McCaslin, Roach and Schow - 4. ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1850, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Franklin, Senators Fairley, Loveland and Wojahn were excused.

SECOND READING

HOUSE BILL NO. 1982, by Representatives Dyer, Cody and Backlund (by request of Health Care Authority)

Limiting basic health plan eligibility for persons in institutions.

The bill was read the second time.

MOTIONS

On motion of Senator Deccio, the following Committee on Health and Long-Term Care amendment was adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 70.47.020 and 1995 c 266 s 2 and 1995 c 2 s 3 are each reenacted and amended to read as follows: As used in this chapter: (1) "Washington basic health plan" or "plan" means the system of enrollment and payment on a prepaid capitated basis for basic health care services, administered by the plan administrator through participating managed health care systems, created by this chapter. (2) "Administrator" means the Washington basic health plan administrator, who also holds the position of administrator of the Washington state health care authority. (3) "Managed health care system" means any health care organization, including health care providers, insurers, health care service contractors, health maintenance organizations, or any combination thereof, that provides directly or by contract basic health care services, as defined by the administrator and rendered by duly licensed providers, on a prepaid capitated basis to a defined patient population enrolled in the plan and in the managed health care system. (4) "Subsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children((,)): (a) Who is not eligible for medicare((,)); (b) who is not confined or residing in a government-operated institution, unless he or she meets eligibility criteria adopted by the administrator; (c) who resides in an area of the state served by a managed health care system participating in the plan((,)); (d) whose gross family income at the time of enrollment does not exceed twice the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services((,)); and (e) who chooses to obtain basic health care coverage from a particular managed health care system in return for periodic payments to the plan. (5) "Nonsubsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children((,)): (a) Who is not eligible for medicare((,)); (b) who is not confined or residing in a government-operated institution, unless he or she meets eligibility criteria adopted by the administrator; (c) who resides in an area of the state served by a managed health care system participating in the plan((, and)); (d) who chooses to obtain basic health care coverage from a particular managed health care system((,)); and (e) who pays or on whose behalf is paid the full costs for participation in the plan, without any subsidy from the plan. (6) "Subsidy" means the difference between the amount of periodic payment the administrator makes to a managed health care system on behalf of a subsidized enrollee plus the administrative cost to the plan of providing the plan to that subsidized enrollee, and the amount determined to be the subsidized enrollee's responsibility under RCW 70.47.060(2). (7) "Premium" means a periodic payment, based upon gross family income which an individual, their employer or another financial sponsor makes to the plan as consideration for enrollment in the plan as a subsidized enrollee or a nonsubsidized enrollee. (8) "Rate" means the per capita amount, negotiated by the administrator with and paid to a participating managed health care system, that is based upon the enrollment of subsidized and nonsubsidized enrollees in the plan and in that system. Sec. 2. RCW 70.47.060 and 1995 c 266 s 1 and 1995 c 2 s 4 are each reenacted and amended to read as follows: The administrator has the following powers and duties: (1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care. In addition, the administrator may offer as basic health plan services chemical dependency services, mental health services and organ transplant services; however, no one service or any combination of these three services shall increase the actuarial value of the basic health plan benefits by more than five percent excluding inflation, as determined by the office of financial management. All subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive covered services in return for premium payments to the plan. The schedule of services shall emphasize proven preventive and primary health care and shall include all services necessary for prenatal, postnatal, and well-child care. However, with respect to coverage for groups of subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that such services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. The schedule of services shall also include a separate schedule of basic health care services for children, eighteen years of age and younger, for those subsidized or nonsubsidized enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services, the administrator shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080, and such other factors as the administrator deems appropriate. However, with respect to coverage for subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that the services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. (2)(a) To design and implement a structure of periodic premiums due the administrator from subsidized enrollees that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members. The enrollment of children shall not require the enrollment of their parent or parents who are eligible for the plan. The structure of periodic premiums shall be applied to subsidized enrollees entering the plan as individuals pursuant to subsection (9) of this section and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (10) of this section. (b) To determine the periodic premiums due the administrator from nonsubsidized enrollees. Premiums due from nonsubsidized enrollees shall be in an amount equal to the cost charged by the managed health care system provider to the state for the plan plus the administrative cost of providing the plan to those enrollees and the premium tax under RCW 48.14.0201. (c) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator, but in no case shall the payment made on behalf of the enrollee exceed the total premiums due from the enrollee. (d) To develop, as an offering by all health carriers providing coverage identical to the basic health plan, a model plan benefits package with uniformity in enrollee cost-sharing requirements. (3) To design and implement a structure of enrollee cost sharing due a managed health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services. (4) To limit enrollment of persons who qualify for subsidies so as to prevent an overexpenditure of appropriations for such purposes. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists. (5) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020. The level of subsidy provided to persons who qualify may be based on the lowest cost plans, as defined by the administrator. (6) To adopt a schedule for the orderly development of the delivery of services and availability of the plan to residents of the state, subject to the limitations contained in RCW 70.47.080 or any act appropriating funds for the plan. (7) To solicit and accept applications from managed health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan. The administrator shall endeavor to assure that covered basic health care services are available to any enrollee of the plan from among a selection of two or more participating managed health care systems. In adopting any rules or procedures applicable to managed health care systems and in its dealings with such systems, the administrator shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several areas of the state. Contracts with participating managed health care systems shall ensure that basic health plan enrollees who become eligible for medical assistance may, at their option, continue to receive services from their existing providers within the managed health care system if such providers have entered into provider agreements with the department of social and health services. (8) To receive periodic premiums from or on behalf of subsidized and nonsubsidized enrollees, deposit them in the basic health plan operating account, keep records of enrollee status, and authorize periodic payments to managed health care systems on the basis of the number of enrollees participating in the respective managed health care systems. (9) To accept applications from individuals residing in areas served by the plan, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan as subsidized or nonsubsidized enrollees, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and on a reasonable schedule defined by the authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If, as a result of an eligibility review, the administrator determines that a subsidized enrollee's income exceeds twice the federal poverty level and that the enrollee knowingly failed to inform the plan of such increase in income, the administrator may bill the enrollee for the subsidy paid on the enrollee's behalf during the period of time that the enrollee's income exceeded twice the federal poverty level. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they will be allowed to reenroll in the plan. (10) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a managed health care system. The administrator may require that a business owner pay at least an amount equal to what the employee pays after the state pays its portion of the subsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a managed care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating managed health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes. (11) To determine the rate to be paid to each participating managed health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same for similar enrollees, the rates negotiated with participating managed health care systems may vary among the systems. In negotiating rates with participating systems, the administrator shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area, the need to conserve the resources of the basic health plan trust account, and other factors the administrator finds relevant. (12) To monitor the provision of covered services to enrollees by participating managed health care systems in order to assure enrollee access to good quality basic health care, to require periodic data reports concerning the utilization of health care services rendered to enrollees in order to provide adequate information for evaluation, and to inspect the books and records of participating managed health care systems to assure compliance with the purposes of this chapter. In requiring reports from participating managed health care systems, including data on services rendered enrollees, the administrator shall endeavor to minimize costs, both to the managed health care systems and to the plan. The administrator shall coordinate any such reporting requirements with other state agencies, such as the insurance commissioner and the department of health, to minimize duplication of effort. (13) To evaluate the effects this chapter has on private employer-based health care coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state. (14) To develop a program of proven preventive health measures and to integrate it into the plan wherever possible and consistent with this chapter. (15) To provide, consistent with available funding, assistance for rural residents, underserved populations, and persons of color. (16) In consultation with appropriate state and local government agencies, to establish criteria defining eligibility for persons confined or residing in government-operated institutions." On motion of Senator Deccio, the following title amendment was adopted:

On page 1, line 2 of the title, after "institutions;" strike the remainder of the title and insert "and reenacting and amending RCW 70.47.020 and 70.47.060."

MOTION

On motion of Senator Deccio, the rules were suspended, House Bill No. 1982, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1982, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1982, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 45; Nays, 0; Absent, 0; Excused, 4.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wood and Zarelli - 45. Excused: Senators Fairley, Loveland, Schow and Wojahn - 4. HOUSE BILL NO. 1982, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1605, by House Committee on Criminal Justice and Corrections (originally sponsored by Representatives Radcliff, Ballasiotes, Quall, Dunn and Sullivan)

Providing for disclosure of information concerning the disease status of offenders.

The bill was read the second time.

MOTION

Senator Long moved that the following Committee on Human Services and Corrections amendment be adopted:

Strike everything after the enacting clause and insert the following: "NEW SECTION. Sec. 1. (1) The legislature finds that department of corrections staff and jail staff perform essential public functions that are vital to our communities. The health and safety of these workers is often placed in jeopardy while they perform the responsibilities of their jobs. There is a special need to allay the concerns of employees who are substantially exposed to the bodily fluids of offenders or detainees. Great mental anguish can be avoided by a prompt blood test and immediate disclosure to the exposed employee. Therefore, the legislature intends that the results of any HIV tests conducted on an offender or detainee under RCW 70.24.340, 70.24.360, or 70.24.370 be immediately disclosed to the superintendent or administrator of the department of corrections facility or local jail housing the offender or detainee, and also be immediately disclosed to any member of a jail staff or department of corrections staff who has been substantially exposed to the bodily fluids of an offender or detained person. The legislature finds that the system of universal precautions required under federal and state law in all settings where risk of occupational exposure to communicable diseases exists are an effective way to reduce the risk of communicable disease transmission. The legislature does not intend to discourage the use of universal precautions but to provide supplemental information for corrections and jail staff to utilize as part of their universal precautions with all offenders and detained people. (2) The legislature further finds that, through the efforts of health care professionals and corrections staff, offenders in department of corrections facilities and people detained in local jails are being encouraged to take responsibility for their health by requesting voluntary and anonymous pretest counseling, HIV testing, posttest counseling, and AIDS counseling. The legislature does not intend, through this act, to mandate disclosure of the results of voluntary and anonymous tests. The legislature intends to continue to protect the confidential exchange of medical information related to voluntary and anonymous pretest counseling, HIV testing, posttest counseling, and AIDS counseling as provided by chapter 70.24 RCW. Sec. 2. RCW 70.24.105 and 1994 c 72 s 1 are each amended to read as follows: (1) No person may disclose or be compelled to disclose the identity of any person who has investigated, considered, or requested a test or treatment for a sexually transmitted disease, except as authorized by this chapter. (2) No person may disclose or be compelled to disclose the identity of any person upon whom an HIV antibody test is performed, or the results of such a test, nor may the result of a test for any other sexually transmitted disease when it is positive be disclosed, except as authorized by this chapter. This protection against disclosure of test subject, diagnosis, or treatment also applies to any information relating to diagnosis of or treatment for HIV infection and for any other confirmed sexually transmitted disease. The following persons, however, may receive such information: (a) The subject of the test or the subject's legal representative for health care decisions in accordance with RCW 7.70.065, with the exception of such a representative of a minor child over fourteen years of age and otherwise competent; (b) Any person who secures a specific release of test results or information relating to HIV or confirmed diagnosis of or treatment for any other sexually transmitted disease executed by the subject or the subject's legal representative for health care decisions in accordance with RCW 7.70.065, with the exception of such a representative of a minor child over fourteen years of age and otherwise competent; (c) The state public health officer, a local public health officer, or the centers for disease control of the United States public health service in accordance with reporting requirements for a diagnosed case of a sexually transmitted disease; (d) A health facility or health care provider that procures, processes, distributes, or uses: (i) A human body part, tissue, or blood from a deceased person with respect to medical information regarding that person; (ii) semen, including that provided prior to March 23, 1988, for the purpose of artificial insemination; or (iii) blood specimens; (e) Any state or local public health officer conducting an investigation pursuant to RCW 70.24.024, provided that such record was obtained by means of court ordered HIV testing pursuant to RCW 70.24.024; or when disclosure is pursuant to RCW 70.24.340 ((or 70.24.024)), 70.24.360, or 70.24.370; (f) A person allowed access to the record by a court order granted after application showing good cause therefor. In assessing good cause, the court shall weigh the public interest and the need for disclosure against the injury to the patient, to the physician-patient relationship, and to the treatment services. Upon the granting of the order, the court, in determining the extent to which any disclosure of all or any part of the record of any such test is necessary, shall impose appropriate safeguards against unauthorized disclosure. An order authorizing disclosure shall: (i) Limit disclosure to those parts of the patient's record deemed essential to fulfill the objective for which the order was granted; (ii) limit disclosure to those persons whose need for information is the basis for the order; and (iii) include any other appropriate measures to keep disclosure to a minimum for the protection of the patient, the physician-patient relationship, and the treatment services, including but not limited to the written statement set forth in subsection (5) of this section; (g) Persons who, because of their behavioral interaction with the infected individual, have been placed at risk for acquisition of a sexually transmitted disease, as provided in RCW 70.24.022, if the health officer or authorized representative believes that the exposed person was unaware that a risk of disease exposure existed and that the disclosure of the identity of the infected person is necessary; (h) A law enforcement officer, fire fighter, health care provider, health care facility staff person, jail staff person, department of corrections staff person, or other persons as defined by the board in rule pursuant to RCW 70.24.340(4), who has requested a test of a person whose bodily fluids he or she has been substantially exposed to, pursuant to RCW 70.24.340(4), if a state or local public health officer performs the test or the test is conducted under RCW 70.24.340, 70.24.360, or 70.24.370; (i) Claims management personnel employed by or associated with an insurer, health care service contractor, health maintenance organization, self-funded health plan, state-administered health care claims payer, or any other payer of health care claims where such disclosure is to be used solely for the prompt and accurate evaluation and payment of medical or related claims. Information released under this subsection shall be confidential and shall not be released or available to persons who are not involved in handling or determining medical claims payment; ((and)) (j) A department of social and health services worker, a child placing agency worker, or a guardian ad litem who is responsible for making or reviewing placement or case-planning decisions or recommendations to the court regarding a child, who is less than fourteen years of age, has a sexually transmitted disease, and is in the custody of the department of social and health services or a licensed child placing agency; this information may also be received by a person responsible for providing residential care for such a child when the department of social and health services or a licensed child placing agency determines that it is necessary for the provision of child care services; and (k) A department of corrections superintendent or administrator, or a jail administrator regarding tests of offenders and detained persons under subsection (4) of this section. (3) No person to whom the results of a test for a sexually transmitted disease have been disclosed pursuant to subsection (2) of this section may disclose the test results to another person except as ((authorized)) otherwise required by ((that subsection)) law. (4) The release of sexually transmitted disease information regarding an offender or detained person, except as provided in subsection (2)(e) of this section, shall be governed as follows: (a) The sexually transmitted disease status of a department of corrections offender shall be made available by department of corrections health care providers to a department of corrections superintendent or administrator as necessary for disease prevention or control and for protection of the safety and security of the staff, offenders, and the public. The information may be submitted to transporting officers and receiving facilities, including facilities that are not under the department of correction's jurisdiction. (b) The sexually transmitted disease status of a person detained in a jail shall be made available by the local public health officer to a jail administrator as necessary for disease prevention or control and for protection of the safety and security of the staff, offenders, detainees, and the public. The results of any test of a person detained in a jail conducted under RCW 70.24.340 or 70.24.360 shall be made available to the jail administrator. The information may be submitted to transporting officers and receiving facilities. (c) Information regarding ((a department of corrections offender's)) the sexually transmitted disease status of an offender or detained person is confidential and may be disclosed by a correctional superintendent or administrator or local jail administrator only as necessary for disease prevention or control and for protection of the safety and security of the staff, offenders, and the public. Unauthorized disclosure of this information to any person may result in disciplinary action, in addition to the penalties prescribed in RCW 70.24.080 or any other penalties as may be prescribed by law. (d) Notwithstanding the limitations on disclosure contained in (a), (b), and (c) of this subsection, whenever any member of jail staff or department of corrections staff has been substantially exposed to the bodily fluids of an offender or detained person, then the results of any tests conducted under RCW 70.24.340, 70.24.360, or 70.24.370 shall be immediately disclosed by the department of corrections health care provider or the local public health officer or the officer's designee to the correctional superintendent or administrator or local jail administrator. The superintendent or administrator shall then immediately disclose these results to the staff member who was substantially exposed. The superintendent or administrator and the health care provider or public health officer shall make a good faith effort to provide disclosure to the exposed person within seventy-two hours of exposure. Disclosure must be accompanied by appropriate counseling for the staff member, including information regarding follow-up testing and treatment. (e) The receipt by an individual of information disclosed under this subsection (4) shall be utilized only for disease prevention or control and for protection of the safety and security of the staff, offenders, detainees, and the public. Use of this information for any other purpose, including harassment or discrimination, may result in disciplinary action, in addition to the penalties prescribed in RCW 70.24.080 or any other penalties as may be prescribed by law. (5) Whenever disclosure is made pursuant to this section, except for subsections (2)(a) and (6) of this section, it shall be accompanied by a statement in writing ((which)) that includes the following or substantially similar language: "This information has been disclosed to you from records whose confidentiality is protected by state law. State law prohibits you from making any further disclosure of it without the specific written consent of the person to whom it pertains, or as otherwise permitted by state law. A general authorization for the release of medical or other information is NOT sufficient for this purpose." An oral disclosure shall be accompanied or followed by such a notice within ten days. (6) The requirements of this section shall not apply to the customary methods utilized for the exchange of medical information among health care providers in order to provide health care services to the patient, nor shall they apply within health care facilities where there is a need for access to confidential medical information to fulfill professional duties. (7) Upon request of the victim, disclosure of test results under this section to victims of sexual offenses under chapter 9A.44 RCW shall be made if the result is negative or positive. The county prosecuting attorney shall notify the victim of the right to such disclosure. Such disclosure shall be accompanied by appropriate counseling, including information regarding follow-up testing. NEW SECTION. Sec. 3. A new section is added to chapter 72.10 RCW to read as follows: (1) The department must develop and implement policies and procedures for the uniform distribution of communicable disease prevention protocols to all corrections staff who, in the course of their regularly assigned job responsibilities, may come within close physical proximity to offenders with communicable diseases. (2) The protocols must identify the offender and special precautions necessary to reduce the risk of transmission of the communicable disease but must not identify the offender's particular communicable disease. (3) For the purposes of this section, "communicable disease" means an illness caused by an infectious agent that can be transmitted from one person, animal, or object to another person by direct or indirect means including transmission via an intermediate host or vector, food, water, or air. NEW SECTION. Sec. 4. A new section is added to chapter 70.48 RCW to read as follows: (1) Local jail administrators must develop and implement policies and procedures for the uniform distribution of communicable disease prevention protocols to all jail staff who, in the course of their regularly assigned job responsibilities, may come within close physical proximity to offenders or detainees with communicable diseases. (2) The protocols must identify the offender or detainee and special precautions necessary to reduce the risk of transmission of the communicable disease but must not identify the offender's or detainee's particular communicable disease. (3) For the purposes of this section, "communicable disease" means an illness caused by an infectious agent that can be transmitted from one person, animal, or object to another person by direct or indirect means including transmission via an intermediate host or vector, food, water, or air. NEW SECTION. Sec. 5. The department of health and the department of corrections must each adopt rules to implement this act. The department of health and the department of corrections with the cooperation of local jail administrators must also report to the legislature by January 1, 1998, on the following: (1) Changes made in rules and department of corrections and local jail policies and procedures to implement this act; and (2) a summary of the number and circumstances of mandatory test results that were disclosed to department of corrections staff and jail staff under RCW 70.24.105.

Sec. 6. RCW 70.24.340 and 1988 c 206 s 703 are each amended to read as follows: (1) Local health departments ((authorized under this chapter)) shall conduct or cause to be conducted pretest counseling, HIV testing, and posttest counseling of all persons: (a) Convicted of a sexual offense under chapter 9A.44 RCW; (b) Convicted of prostitution or offenses relating to prostitution under chapter 9A.88 RCW; ((or)) (c) Convicted of drug offenses under chapter 69.50 RCW if the court determines at the time of conviction that the related drug offense is one associated with the use of hypodermic needles; or (d) Who are offenders or arrested or detained persons and who have subjected a law enforcement officer, fire fighter, health care provider, health care facility staff person, department of corrections staff person, jail staff person, or other category of employee, as determined by the board, to substantial exposure to their bodily fluids. Persons tested under this subsection (1)(d) shall also be tested for hepatitis B. (2) ((Such)) Testing of persons convicted under subsection (1)(a) through (c) of this section shall be conducted as soon as possible after sentencing and shall be so ordered by the sentencing judge. Testing of persons causing a substantial exposure under subsection (1)(d) of this section shall be conducted as soon as possible, but not later than forty-eight hours after the exposure. Consent of the persons tested under this section is not required. (3) ((This section applies)) Subsection (1)(a) through (c) of this section applies only to offenses committed after March 23, 1988, and subsection (1)(d) of this section applies only to exposures occurring after the effective date of this act. (4)(a) A law enforcement officer, fire fighter, health care provider, health care facility staff person, any member of a jail staff or department of corrections staff, or other categories of employment determined by the board in rule to be at risk of substantial exposure to HIV, who has experienced a substantial exposure to another person's bodily fluids in the course of his or her employment, may request a state or local public health officer to order pretest counseling, HIV testing, hepatitis B testing, and posttest counseling for the person whose bodily fluids he or she has been exposed to. (b) If the person who is subject to the order is not an offender or arrested or detained person tested under subsection (1) of this section, the person shall be given written notice of the order promptly, personally, and confidentially, stating the grounds and provisions of the order, including the factual basis therefor. If the person who is subject to the order is not an offender or arrested or detained person tested under subsection (1) of this section and refuses to comply, the state or local public health officer may petition the superior court for a hearing. The standard of review for the order is whether substantial exposure occurred and whether that exposure presents a possible risk of transmission of the HIV virus as defined by the board by rule. Upon conclusion of the hearing, the court shall issue the appropriate order. (c) The state or local public health officer shall perform counseling and testing under this subsection if he or she finds that the exposure was substantial ((and presents a possible risk)) as defined by the board of health by rule. Sec. 7. RCW 70.24.360 and 1988 c 206 s 706 are each amended to read as follows: Jail administrators, ((with the approval of)) after consultation with and receiving written recommendations from the local public health officer, may order pretest counseling, HIV testing, and posttest counseling for persons detained in the jail if the ((local public health officer)) jail administrator determines that actual or threatened behavior presents a possible risk to the staff, general public, or other persons. ((Approval of the local public health officer shall be based on RCW 70.24.024(3) and may be contested through RCW 70.24.024(4).)) The administrator shall establish, pursuant to RCW 70.48.071, a procedure to document the possible risk ((which)) that is the basis for the HIV testing. "Possible risk," as used in this section, shall be defined by the jail administrator after consultation with the board ((in rule)). Possible risk, as used in the documentation of the behavior, or threat thereof, shall be reviewed with the person ((to try to assure that the person understands the basis for testing)). Sec. 8. RCW 70.24.024 and 1988 c 206 s 909 are each amended to read as follows: (1) Subject to the provisions of this chapter, the state and local public health officers or their authorized representatives may examine and counsel or cause to be examined and counseled persons reasonably believed to be infected with or to have been exposed to a sexually transmitted disease. (2) Orders or restrictive measures directed to persons with a sexually transmitted disease shall be used as the last resort when other measures to protect the public health have failed, including reasonable efforts, which shall be documented, to obtain the voluntary cooperation of the person who may be subject to such an order. The orders and measures shall be applied serially with the least intrusive measures used first. The burden of proof shall be on the state or local public health officer to show that specified grounds exist for the issuance of the orders or restrictive measures and that the terms and conditions imposed are no more restrictive than necessary to protect the public health. (3) When the state or local public health officer within his or her respective jurisdiction knows or has reason to believe, because of direct medical knowledge or reliable testimony of others in a position to have direct knowledge of a person's behavior, that a person has a sexually transmitted disease and is engaging in specified conduct, as determined by the board by rule based upon generally accepted standards of medical and public health science, that endangers the public health, he or she shall conduct an investigation in accordance with procedures prescribed by the board to evaluate the specific facts alleged, if any, and the reliability and credibility of the person or persons providing such information and, if satisfied that the allegations are true, he or she may issue an order according to the following priority to: (a) Order a person to submit to a medical examination or testing, seek counseling, or obtain medical treatment for curable diseases, or any combination of these, within a period of time determined by the public health officer, not to exceed fourteen days. (b) Order a person to immediately cease and desist from specified conduct ((which)) that endangers the health of others by imposing such restrictions upon the person as are necessary to prevent the specified conduct that endangers the health of others only if the public health officer has determined that clear and convincing evidence exists to believe that such person has been ordered to report for counseling as provided in (a) of this subsection and continues to demonstrate behavior ((which)) that endangers the health of others. Any restriction shall be in writing, setting forth the name of the person to be restricted and the initial period of time, not to exceed three months, during which the order shall remain effective, the terms of the restrictions, and such other conditions as may be necessary to protect the public health. Restrictions shall be imposed in the least-restrictive manner necessary to protect the public health.

(4)(a) Upon the issuance of any order by the state or local public health officer or an authorized representative pursuant to subsection (3) of this section or RCW 70.24.340(4) to a person who is not an offender or arrested or detained person tested under RCW 70.24.340(1), such public health officer shall give written notice promptly, personally, and confidentially to the person who is the subject of the order stating the grounds and provisions of the order, including the factual bases therefor, the evidence relied upon for proof of infection and dangerous behavior, and the likelihood of repetition of such behaviors in the absence of such an order, and notifying the person who is the subject of the order that, if he or she contests the order, he or she may appear at a judicial hearing on the enforceability of the order, to be held in superior court. He or she may have an attorney appear on his or her behalf in the hearing at public expense, if necessary. The hearing shall be held within seventy-two hours of receipt of the notice, unless the person subject to the order agrees to comply. If the person contests the order, no invasive medical procedures shall be carried out prior to a hearing being held pursuant to this subsection. If the person does not contest the order within seventy-two hours of receiving it, and the person does not comply with the order within the time period specified for compliance with the order, the state or local public health officer may request a warrant be issued by the superior court to insure appearance at the hearing. The hearing shall be within seventy-two hours of the expiration date of the time specified for compliance with the original order. The burden of proof shall be on the public health officer to show by clear and convincing evidence that the specified grounds exist for the issuance of the order and for the need for compliance and that the terms and conditions imposed therein are no more restrictive than necessary to protect the public health. Upon conclusion of the hearing, the court shall issue appropriate orders affirming, modifying, or dismissing the order. (b) If the superior court dismisses the order of the public health officer, the fact that the order was issued shall be expunged from the records of the department or local department of health. (5) Any hearing conducted pursuant to this section shall be closed and confidential unless a public hearing is requested by the person who is the subject of the order, in which case the hearing will be conducted in open court. Unless in open hearing, any transcripts or records relating thereto shall also be confidential and may be sealed by the order of the court. NEW SECTION. Sec. 9. A new section is added to chapter 70.28 RCW to read as follows: (1) The tuberculosis status of a department of corrections offender who is in the infectious stage shall be made available by department of corrections health care providers and local public health officers to a department of corrections superintendent or administrator. The information made available under this subsection (1) shall be utilized by a superintendent or administrator only as provided in section 3 of this act. (2) The tuberculosis status of a person detained in a jail who is in the infectious stage shall be made available by the local public health officer to the jail administrator. The information made available under this subsection (2) shall be utilized by the jail administrator only as provided in section 4 of this act. NEW SECTION. Sec. 10. A new section is added to chapter 72.10 RCW to read as follows: (1) The department shall conduct or cause to be conducted an inspection, examination, and test for the purposes of determining the presence of tuberculosis in the infectious stage of all offenders sentenced to the department. Initial testing shall be conducted within five days of reception, with follow-up testing as medically indicated. (2) All offenders received by the department, those offenders who are remanded from community custody or work training release, and all offenders who return or are received at a department facility from the community or a local jail after being out of the department's custody for ninety days or more shall be tested for tuberculosis within five days of reception or return to the department's custody, followed by a second test with follow-up testing as medically indicated."

MOTION

On motion of Senator Long, and there being no objection, the motion to adopt the Committee on Human Services and Corrections striking amendment to Substitute House Bill No. 1605 was withdrawn.

MOTION

On motion of Senator Long, the Committee on Human Services and Corrections striking amendment to Substitute House Bill No. 1605 was not adopted.

MOTION

Senator Zarelli moved that the following amendment by Senators Zarelli, Hargrove, Long and Franklin be adopted:

On page 7, beginning on line 16, after "(4)" strike all material through "rule." on line 38, and insert "A law enforcement officer, fire fighter, health care provider, health care facility staff person, department of corrections' staff person, jail staff person, or other categories of employment determined by the board in rule to be at risk of substantial exposure to HIV, who has experienced a substantial exposure to another person's bodily fluids in the course of his or her employment, may request a state or local public health officer to order pretest counseling, HIV testing, and posttest counseling for the person whose bodily fluids he or she has been exposed to. If the state or local public health officer refuses to order counseling and testing under this subsection, the person who made the request may petition the superior court for a hearing to determine whether an order shall be issued. The hearing on the petition shall be held within seventy-two hours of filing the petition, exclusive of Saturdays, Sundays, and holidays. The standard of review to determine whether the public health officer shall be required to issue the order is whether substantial exposure occurred and whether that exposure presents a possible risk of transmission of the HIV virus as defined by the board by rule. Upon conclusion of the hearing, the court shall issue the appropriate order. The person who is subject to the state or local public health officer's order to receive counseling and testing shall be given written notice of the order promptly, personally, and confidentially, stating the grounds and provisions of the order, including the factual basis therefor. If the person who is subject to the order refuses to comply, the state or local public health officer may petition the superior court for a hearing. The hearing on the petition shall be held within seventy-two hours of filing the petition, exclusive of Saturdays, Sundays, and holidays. The standard of review for the order is whether substantial exposure occurred and whether that exposure presents a possible risk of transmission of the HIV virus as defined by the board by rule. Upon conclusion of the hearing, the court shall issue the appropriate order. The state or local public health officer shall perform counseling and testing under this subsection if he or she finds that the exposure was substantial and presents a possible risk as defined by the board of health by rule or if he or she is ordered to do so by a court. The counseling and testing required under this subsection shall be completed as soon as possible after the substantial exposure or after an order is issued by a court, but shall begin not later than seventy-two hours after the substantial exposure or an order is issued by the court." Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senators Zarelli, Hargrove, Long and Franklin on page 7, beginning on line 16, to Substitute House Bill No. 1605.

The motion by Senator Zarelli carried and the amendment was adopted.

MOTION

On motion of Senator Long, the rules were suspended, Substitute House Bill No. 1605, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

MOTION

On motion of Senator Hale, Senator Deccio was excused.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1605, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1605, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 43; Nays, 2; Absent, 0; Excused, 4.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, West, Winsley, Wood and Zarelli - 43. Voting nay: Senators Sheldon and Thibaudeau - 2. Excused: Senators Deccio, Fairley, Loveland and Wojahn - 4. SUBSTITUTE HOUSE BILL NO. 1605, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION FOR RECONSIDERATION

Having voted on the prevailing side, Senator Heavey moved to reconsider the vote by which Engrossed Second Substitute House Bill No. 1303, as amended by the Senate, passed the Senate earlier today.

The President declared the question before the Senate to be the motion by Senator Heavey to reconsider the vote by which Engrossed Second Substitute House Bill No. 1303, as amended by the Senate, passed the Senate.

The motion by Senator Heavey for reconsideration failed.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1771, by House Committee on Law and Justice (originally sponsored by Representatives Mitchell, Tokuda, Constantine, Sheahan, Keiser, Mason, Blalock, Costa, Conway, Butler, Murray and Cody; by request of Secretary of State)

Providing for certification of professional guardians.

The bill was read the second time.

MOTIONS

On motion of Senator Long, the following Committee on Human Services and Corrections amendment was adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 11.88.020 and 1990 c 122 s 3 are each amended to read as follows: (1) Any suitable person over the age of eighteen years, or any parent under the age of eighteen years or, if the petition is for appointment of a professional guardian, any individual or guardianship service that meets any certification requirements established by the administrator for the courts, may, if not otherwise disqualified, be appointed guardian or limited guardian of the person and/or the estate of an incapacitated person((; any trust company regularly organized under the laws of this state and national banks when authorized so to do may act as guardian or limited guardian of the estate of an incapacitated person; and any nonprofit corporation may act as guardian or limited guardian of the person and/or estate of an incapacitated person if the articles of incorporation or bylaws of such corporation permit such action and such corporation is in compliance with all applicable provisions of Title 24 RCW)). A financial institution subject to the jurisdiction of the department of financial institutions and authorized to exercise trust powers, and a federally chartered financial institution when authorized to do so, may act as a guardian of the estate of an incapacitated person without having to meet the certification requirements established by the administrator for the courts. No person is qualified to serve as a guardian who is (((1))) (a) under eighteen years of age except as otherwise provided herein; (((2))) (b) of unsound mind; (((3))) (c) convicted of a felony or of a misdemeanor involving moral turpitude; (((4))) (d) a nonresident of this state who has not appointed a resident agent to accept service of process in all actions or proceedings with respect to the estate and caused such appointment to be filed with the court; (((5))) (e) a corporation not authorized to act as a fiduciary, guardian, or limited guardian in the state; (((6))) (f) a person whom the court finds unsuitable. (2) The professional guardian certification requirements required under this section shall not apply to a testamentary guardian appointed under RCW 11.88.080. NEW SECTION. Sec. 2. A new section is added to chapter 11.88 RCW to read as follows: As used in this chapter, "professional guardian" means a guardian appointed under this chapter who is not a member of the incapacitated person's family and who charges fees for carrying out the duties of court-appointed guardian of three or more incapacitated persons. NEW SECTION. Sec. 3. (1) The administrator for the courts shall study, and make recommendations on, standards and criteria for implementing a system of certification of professional guardians as defined in section 2 of this act and improved coordination between guardians and guardians ad litem. (2) In conducting the study and preparing the recommendations, the administrator may include examination of: (a) Criteria for certification as a professional guardian; (b) Whether persons other than an alleged incapacitated person should be given standing to request a jury trial to determine incapacity; (c) Whether, following the appointment of a guardian, a guardian ad litem may continue to serve at public expense; (d) Whether the superior court should have authority to limit fees for attorneys, guardians, and guardians ad litem; (e) The appropriate entity to certify professional guardians; and (f) Grounds for discipline of professional guardians. (3) In conducting the study, the administrator shall consult with the appropriate groups and interested parties including, but not limited to, representatives of senior citizens, members of both chambers of the legislature, the bar association, superior court judges, associations affiliated with persons with developmental and chronic functional disabilities, health care organizations, persons who act as guardians for compensation and on a voluntary basis, and guardians ad litem. (4) The administrator shall submit the results of the study and recommendations to the governor and legislature not later than January 1, 1998. NEW SECTION. Sec. 4. Sections 1 and 2 of this act take effect January 1, 1999." On motion of Senator Long, the following amendment by Senators Long and Franklin to the Committee on Human Services and Corrections striking amendment was adopted:

On page 2, line 22, after "guardian;" insert the following: "(b) A fee structure that will make the certification process self-supporting;" Renumber the remaining subsections consecutively and correct any internal references accordingly. The President declared the question before the Senate to be the adoption of the Committee on Human Services and Corrections striking amendment, as amended, to Engrossed Substitute House Bill No. 1771.

The committee striking amendment, as amended, was adopted.

MOTIONS

On motion of Senator Long, the following title amendment was adopted:

On page 1, line 1 of the title, after "guardians;" strike the remainder of the title and insert "amending RCW 11.88.020; adding a new section to chapter 11.88 RCW; creating a new section; and providing an effective date." On motion of Senator Long, the rules were suspended, Engrossed Substitute House Bill No. 1771, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 1771, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 1771, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 46; Nays, 0; Absent, 1; Excused, 2.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wood and Zarelli - 46. Absent: Senator Prince - 1. Excused: Senators Fairley and Wojahn - 2. ENGROSSED SUBSTITUTE HOUSE BILL NO. 1771, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 2091, by Representatives Cairnes, Gardner, Linville and Reams

Allowing counties planning under the growth management act to establish industrial land banks as permissible urban growth outside of an urban growth area.

The bill was read the second time.

MOTION

On motion of Senator Anderson, the following Committee on Government Operations striking amendment was not adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 36.70A.367 and 1996 c 167 s 2 are each amended to read as follows: (1) In addition to the major industrial development allowed under RCW 36.70A.365, a county required or choosing to plan under RCW 36.70A.040 ((that has a population greater than two hundred fifty thousand and that is part of a metropolitan area that includes a city in another state with a population greater than two hundred fifty thousand)) may establish, in consultation with cities consistent with provisions of RCW 36.70A.210, a process for designating ((a)) industrial land banks of no more than two ((master planned locations for major industrial activity outside)) noncontiguous locations, which may include multiple development sites, as permissible urban growth outside of urban growth areas. The industrial land bank location must be characterized by: (a) Some existing industrial or commercial development or must be adjacent to an area characterized by such development; or (b) a unique physical or locational characteristic that supports its designation as an industrial land bank. (2) ((A master planned location for major industrial developments outside an urban growth area may be included in the urban)) "Industrial land bank" means a location designated for one or more manufacturing, industrial, commercial, or high-technology businesses, related office uses, and incidental retail or commercial uses designed to serve or support the industrial land bank, that requires a location with characteristics such as size or proximity to transportation facilities, natural resources, or related industries, such that the county finds there is no suitable location in an existing urban growth area. The industrial land bank shall not be for the purpose of retail commercial development or multiple tenant office parks. (3) In order to designate an industrial land bank, the county must make findings that: (a) An inventory has been conducted and there is no suitable location available for the industrial land bank within an existing urban growth area; (b) the establishment of the industrial land bank is important to achieving documented economic development goals, policies, or plans of the county or state; and (c) the necessary infrastructure to support the industrial land bank is available or can be provided by private or public sources in a reasonable manner and time frame. (4) Development in an industrial land bank ((for the county if criteria including, but not limited to, the following are met)) must address the following: (a) ((New)) Infrastructure is provided for and/or applicable impact fees are paid; (b) ((Transit-oriented site planning)) Transportation impacts are addressed and traffic demand management programs are implemented where appropriate; (c) Buffers are provided between the ((major)) industrial ((development)) land bank and adjacent nonurban areas; (d) Environmental protection including air and water quality has been addressed and provided for; (e) Development regulations are established to ensure that urban growth will not occur in adjacent nonurban areas; (f) Provision is made to mitigate adverse impacts on designated agricultural lands, forest lands, and mineral resource lands; and (g) The plan for the ((major)) industrial development is consistent with the county's development regulations established for protection of critical areas((; and (h) An inventory of developable land has been conducted as provided in RCW 36.70A.365)). (((3) In selecting master planned locations for inclusion in the urban industrial land bank, priority shall be given to locations that are adjacent to, or in close proximity to, an urban growth area. (4))) (5) Final approval of ((inclusion of a master planned location in the urban)) an industrial land bank shall be ((considered)) through adoption of the comprehensive plan or an adopted amendment to the comprehensive plan adopted pursuant to RCW 36.70A.070, except that RCW 36.70A.130(2) does not apply so that inclusion or exclusion of ((master planned)) industrial land bank locations may be considered at any time. (((5))) Once ((a master planned location)) an industrial land bank has been ((included in the urban industrial land bank, manufacturing and industrial)) approved, businesses that the local jurisdiction determines qualify ((as major industrial development)) under ((RCW 36.70A.365)) subsection (2) of this section may be located there. (6) Nothing in this section may be construed to alter the requirements for a county to comply with chapter 43.21C RCW. (((7) The authority of a county to engage in the process of including or excluding master planned locations from the urban industrial land bank shall terminate on December 31, 1998. However, any location included in the urban industrial land bank on December 31, 1998, shall remain available for major industrial development as long as the criteria of subsection (2) of this section continue to be met. (8) For the purposes of this section, "major industrial development" means a master planned location suitable for manufacturing or industrial businesses that: (a) Requires a parcel of land so large that no suitable parcels are available within an urban growth area; or (b) is a natural resource-based industry requiring a location near agricultural land, forest land, or mineral resource land upon which it is dependent. The major industrial development may not be for the purpose of retail commercial development or multitenant office parks.))"

MOTION

Senator Anderson moved that the following amendment by Senators Anderson and Patterson be adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 36.70A.367 and 1996 c 167 s 2 are each amended to read as follows: (1) In addition to the major industrial development allowed under RCW 36.70A.365 and in addition to the authority to establish an urban growth area outside of a city allowed under RCW 36.70A.110, a county required or choosing to plan under RCW 36.70A.040 ((that has a population greater than two hundred fifty thousand and that is part of a metropolitan area that includes a city in another state with a population greater than two hundred fifty thousand)) may establish, in consultation with cities consistent with procedures and provisions of RCW 36.70A.210, a process for designating ((a bank of no more than two master planned locations for major industrial activity outside)) and determining the allowed uses within industrial land banks. The industrial land banks shall consist of no more than two noncontiguous locations, which may include multiple development sites outside urban growth areas. (2) ((A master planned location for major industrial developments outside an urban growth area may be included in the urban industrial land bank for the county if criteria including, but not limited to, the following are met)) "Industrial land bank" means a location designated for one or more manufacturing, industrial, commercial, or high-technology businesses, and related office uses. The industrial land bank shall not be for the purpose of retail commercial development or multiple tenant office parks. An industrial land bank may be designated at (a) a unique location or a location with unique physical characteristics, or (b) a location already characterized by, or adjacent to, some existing industrial or commercial development. (3) In order to designate an industrial land bank characterized by a unique location or unique physical characteristics, the county must make findings that: (a) The location of the industrial land bank is unique or is characterized by unique physical characteristics such as size, or proximity to transportation facilities, natural resources, or related industries that support its designation as an industrial land bank; and (b) the necessary infrastructure to support the industrial land bank is available or can be provided by private or public sources in a reasonable manner and time frame. (4) In order to designate an industrial land bank already characterized by some existing industrial or commercial development, the county must make findings that: (a) An inventory has been conducted and there are no suitable locations available for the industrial land bank within existing urban growth areas within the county; (b) the establishment of the industrial land bank is important to achieving documented economic development goals, policies, or plans of the county or state; (c) the necessary infrastructure to support the industrial land bank is available or can be provided by private or public sources in a reasonable manner and time frame; and (d) the industrial land bank location is characterized by some existing industrial or commercial development or is adjacent to an area characterized by such development. (5) Final approval of an industrial land bank shall be through adoption of the comprehensive plan or an adopted amendment to the comprehensive plan, and development regulations that are consistent with and implement the comprehensive plan, except that RCW 36.70A.130(2) does not apply so that inclusion or exclusion of industrial land bank locations may be considered at any time. (6) Nothing in this section may be construed to alter the requirements for a county to comply with chapter 43.21C RCW. Once an industrial land bank has been approved, development that qualifies as an allowed use and that the county determines meets the requirements of subsections (7) and (8) of this section may be located there. (7) Development in an industrial land bank characterized by unique location or unique physical characteristics must meet the following: (a) ((New)) Infrastructure is provided for and/or applicable impact fees are paid; (b) ((Transit-oriented site planning)) Transportation impacts are mitigated and traffic demand management programs are implemented; (c) Buffers are provided between the ((major)) industrial ((development)) land bank and adjacent nonurban areas; (d) Environmental ((protection)) impacts including impacts to air and water quality ((has)) have been ((addressed and provided for)) mitigated in accordance with chapter 43.21C and/or 36.70A RCW; (e) Comprehensive plan policies and development regulations are established to ensure that urban growth will not occur in adjacent nonurban areas; (f) Provision is made to mitigate adverse impacts on designated agricultural lands, forest lands, and mineral resource lands; and (g) ((The plan for the major industrial development is consistent with the county's development regulations established for protection of critical areas; and (h) An inventory of developable land has been conducted as provided in RCW 36.70A.365. (3) In selecting master planned locations for inclusion in the urban industrial land bank, priority shall be given to locations that are adjacent to, or in close proximity to, an urban growth area. (4) Final approval of inclusion of a master planned location in the urban industrial land bank shall be considered an adopted amendment to the comprehensive plan adopted pursuant to RCW 36.70A.070, except that RCW 36.70A.130(2) does not apply so that inclusion or exclusion of master planned locations may be considered at any time. (5) Once a master planned location has been included in the urban industrial land bank, manufacturing and industrial businesses that qualify as major industrial development under RCW 36.70A.365 may be located there. (6) Nothing in this section may be construed to alter the requirements for a county to comply with chapter 43.21C RCW. (7) The authority of a county to engage in the process of including or excluding master planned locations from the urban industrial land bank shall terminate on December 31, 1998. However, any location included in the urban industrial land bank on December 31, 1998, shall remain available for major industrial development as long as the criteria of subsection (2) of this section continue to be met. (8) For the purposes of this section, "major industrial development" means a master planned location suitable for manufacturing or industrial businesses that: (a) Requires a parcel of land so large that no suitable parcels are available within an urban growth area; or (b) is a natural resource-based industry requiring a location near agricultural land, forest land, or mineral resource land upon which it is dependent. The major industrial development may not be for the purpose of retail commercial development or multitenant office parks)) Development relates to the unique location or unique physical characteristics that were the basis for designation of the industrial land bank such as size, or proximity to transportation facilities, natural resources, or related industries. (8) Development in an industrial land bank already characterized by some existing industrial or commercial development must meet the following: (a) Infrastructure is provided for and/or applicable impact fees are paid; (b) Transportation impacts are mitigated and traffic demand management programs are implemented; (c) Buffers are provided between the industrial land bank and adjacent nonurban areas; (d) Environmental impacts including impacts to air and water quality have been mitigated in accordance with chapter 43.21C and/or 36.70A RCW; (e) Comprehensive plan policies and development regulations are established to ensure that urban growth will not occur in adjacent nonurban areas; and (f) Provision is made to mitigate adverse impacts on designated agricultural lands, forest lands, and mineral resource lands." Debate ensued.

The President declared the question before the Senate to be the adoption of the striking amendment by Senators Anderson and Patterson to House Bill No. 2091.

The motion by Senator Anderson carried and the striking amendment was adopted.

MOTIONS

On motion of Senator Anderson, the following title amendment was adopted:

On page 1, line 1 of the title, after "banks;" strike the remainder of the title and insert "and amending RCW 36.70A.367." On motion of Senator Anderson, the rules were suspended, House Bill No. 2091, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 2091, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 2091, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 39; Nays, 10; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Finkbeiner, Franklin, Goings, Hale, Hargrove, Heavey, Hochstatter, Horn, Johnson, Long, Loveland, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Snyder, Spanel, Stevens, Strannigan, Swecker, West, Winsley, Wojahn, Wood and Zarelli - 39. Voting nay: Senators Fairley, Fraser, Haugen, Jacobsen, Kline, Kohl, McAuliffe, Sheldon, Swanson and Thibaudeau - 10. HOUSE BILL NO. 2091, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 1316, by Representatives Honeyford, Lisk, Boldt, Sump, Fisher and Dunn

Designating state route number 35.

The bill was read the second time.

MOTION

On motion of Senator Prince, the rules were suspended, House Bill No. 1316 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1316.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1316 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 1; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 48. Absent: Senator Deccio - 1. HOUSE BILL NO. 1316, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Hale, Senators Deccio and Johnson were excused.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1513, by House Committee on Transportation Policy and Budget (originally sponsored by Representatives Radcliff, Scott, Sterk, O'Brien, Robertson, Hatfield, Skinner, Murray, Cairnes, Wolfe and Wensman) (by request of Commute Trip Reduction Task Force)

Enhancing transportation demand management.

The bill was read the second time.

MOTION

On motion of Senator Wood, the rules were suspended, Substitute House Bill No. 1513 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1513.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1513 and the bill passed the Senate by the following vote: Yeas, 40; Nays, 6; Absent, 1; Excused, 2.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Kline, Long, Loveland, McCaslin, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Stevens, Strannigan, Swanson, Swecker, West, Winsley, Wood and Zarelli - 40. Voting nay: Senators Fairley, Kohl, McAuliffe, Spanel, Thibaudeau and Wojahn - 6. Absent: Senator McDonald - 1. Excused: Senators Deccio and Johnson - 2. SUBSTITUTE HOUSE BILL NO. 1513, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1888, by House Committee on Trade and Economic Development (originally sponsored by Representatives Van Luven, Veloria, Dunn, McDonald, Alexander, Ballasiotes, Sheldon, Morris, Mason, Kastama, Wensman, Wolfe, Doumit, Hatfield, Thompson, Butler, Chandler, Kessler, Dickerson, Constantine, Ogden, Conway, Costa, Cole and O'Brien)

Creating the executive-legislative task force on international trade.

The bill was read the second time.

MOTION

Senator Fraser moved that the following amendments by Senators Anderson and Fraser be considered simultaneously and be adopted:

On page 2, line 12, after "of" strike "twenty-two" and insert "twenty-three" On page 2, line 17, after "representatives" insert "and a member of the senate selected by and from the three members appointed by the president of the senate" On page 2, line 17, after "vice” strike "chair" and insert "chairs" On page 2, after "(iv)" strike all material through "party" on line 21, and insert "Three members from the senate, appointed by the president of the senate, at least one from each political party" Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senators Anderson and Fraser on page 1, lines 12, 17(2), and after (iv) to Substitute House Bill No. 1888.

The motion by Senator Fraser carried and the amendments were adopted.

MOTION

Senator Sellar moved that the following amendments be considered simultaneously and be adopted:

On page 2, line 7, after "trade" insert "and tourism" On page 2, line 8, after "increased" insert "tourism and" On page 4, strike all material on line 24, and insert the following: "NEW SECTION. Sec. 5. The legislature finds that: (1) The attraction of visitors to this state can enhance the economic well-being of our citizens by increasing the jobs and income derived from commerce with tourists traveling in the state. (2) The state has valuable natural beauty, man-made, and scenic attractions, and the promotion of these attractions by cooperative efforts between the public and private sectors can significantly contribute to economic growth and employment opportunities. Cooperation between the public and private sectors requires a mechanism to coordinate the variety of efforts aimed at promoting and developing tourism in our state. NEW SECTION. Sec. 6. A task force to the legislature on tourism promotion and marketing is hereby created. The task force shall consist of nine members from the private sector, four members from the public sector, and three ex officio members. The private sector members shall represent the Washington state hotel/motel association, the Washington state restaurant association, the Washington association of convention & visitor bureaus, the Washington festivals and events association, the association of Washington business, the Washington retail council, the Washington public ports association, and the Washington chamber of commerce executives. The governor shall appoint the private sector members from recommendations made by each of the associations to be represented. Consideration shall be given so as to maintain a state-wide balance of representatives appointed. The public members must include two members from the house of representatives and two members from the senate. The public members must be chosen respectively by the lieutenant governor and the speaker of the house of representatives. The director of the tourism development division, or the director's designee, the director of the state parks and recreation commission, or the director's designee, and a representative of the attorney general's office shall sit as ex officio members of the task force. NEW SECTION. Sec. 7. (1) The task force may by majority vote establish working groups to focus on specific issues in the tourism industry. (2) The task force shall by majority vote prescribe rules of procedure for itself and its working groups that are consistent with this act. NEW SECTION. Sec. 8. The task force or its working groups are authorized to study tourism promotion and related issues and prepare, for legislative and executive consideration, a comprehensive proposal for the establishment of a private commission to market Washington state and its tourism advantages. The proposal must include, but is not limited to: (1) An evaluation of existing state laws, policies, and programs that promote or affect state tourism marketing; (2) The level of state interdepartmental cooperation needed to ensure an effective and coordinated continuing tourism program within the state agencies; (3) A clear determination of the economic impact to the state of an aggressive, continuous state-wide tourism marketing program; (4) Recommendations from public and private sector organizations concerning the establishing of a legislatively established state-wide tourism commission, its structure, its membership, and its objectives; (5) A specific proposal and plan for the funding from private sources of an acceptable working budget for the commission; (6) The procedure for the established commission to develop a state-wide marketing plan that addresses all areas of the state and the state's relationship to the commission, to other states, and to other nations. The task force shall study the roles and responsibilities of the public and private sector and make recommendations for the roles, responsibilities, and interrelationship between the tourism division and the private commission. NEW SECTION. Sec. 9. The department of community, trade, and economic development shall provide the task force with the necessary staff support. NEW SECTION. Sec. 10. Members of the task force shall serve without additional compensation, but must be reimbursed for their travel expenses, in accordance with RCW 43.03.050 and 44.04.120, incurred while attending sessions of the task force or meetings of working groups, engaged on other task force business authorized by the task force, or going to and coming from task force meetings. NEW SECTION. Sec. 11. All expenses of the task force, including salaries and expenses of employees, must be paid upon voucher forms as provided by the auditor and signed by the chairperson or vice-chairperson of the task force and attested by the secretary of the task force. The authority of the chairperson and secretary to sign vouchers continues until their successors are selected after each ensuing session of the legislature. Vouchers may be drawn on funds appropriated generally by the legislature or upon any special appropriation that is provided by the legislature for the expenses of the task force, or both. NEW SECTION. Sec. 12. The task force shall cooperate, act, and function with legislative committees, executive agencies, and private organizations within the tourism industry. The task force shall report to the legislature by January 31, 1998, outlining its findings and recommendations. NEW SECTION. Sec. 13. 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. 14. Sections 1 through 4 of this act expire March 1, 1998. Sections 5 through 13 of this act expire June 30, 1998." Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senator Sellar on page 2, lines 7 and 8, and page 4, striking everything on line 24, to Substitute House Bill No. 1888.

The motion by Senator Sellar carried and the amendments were adopted.

MOTIONS

On motion of Senator Sellar, the following title amendments were considered simultaneously and were adopted:

On page 1, on line 1 of the title, strike "force" and insert "forces" On page 1, line 2 of the title, after "trade" insert "and tourism promotion and development" On page 1, line 2 of the title, strike "an" On page 1, line 3 of the title, strike "date" and insert "dates" On motion of Senator Schow, the rules were suspended, Substitute House Bill No. 1888, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1888, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1888, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 46; Nays, 1; Absent, 1; Excused, 1.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn and Wood - 46. Voting nay: Senator Zarelli - 1. Absent: Senator Goings - 1. Excused: Senator Deccio - 1. SUBSTITUTE HOUSE BILL NO. 1888, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

There being no objection, the Senate resumed consideration of House Bill No. 1708 and the pending amendment by Senator Fraser on page 2, after line 3, to the Committee on the Commerce and Labor striking amendment, deferred earlier today.

MOTION

On motion of Senator Fraser, and there being no objection, the amendment on page 2, after line 3, to the Committee on Commerce and Labor striking amendment was withdrawn.

The President declared the question before the Senate to be the adoption of the Committee on Commerce and Labor striking amendment to House Bill No. 1708.

The committee striking amendment was adopted.

MOTIONS

On motion of Senator Horn, the following title amendment was adopted:

On page 1, line 2 of the title, after "week;" strike the remainder of the title and insert "amending RCW 49.46.130; and adding a new section to chapter 49.46 RCW." On motion of Senator Horn, the rules were suspended, House Bill No. 1708, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

POINT OF INQUIRY

Senator Swanson: “Senator Horn, does this working beyond the forty hours--would that preclude these people from doing manual labor like unloading freight trucks and this type of thing? Do I have your assurance of that?”

Senator Horn: “These people are hired as salesmen, so they would be doing the same job that they are hired for, not jobs they are not hired for.”

Senator Swanson: “Thank you.”

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1708, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1708, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 47; Nays, 1; Absent, 1; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 47. Voting nay: Senator Fraser - 1. Absent: Senator Goings - 1. HOUSE BILL NO. 1708, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 1439, by Representatives B. Thomas, Sherstad, Murray, L. Thomas, Wolfe, Cole, DeBolt and Wensman

Authorizing counties to set deadlines for petitioning for changes in assessed valuation.

The bill was read the second time.

MOTIONS

On motion of Senator McCaslin, the following Committee on Government Operations amendment was adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 84.40.038 and 1994 c 123 s 4 are each amended to read as follows: (1) The owner or person responsible for payment of taxes on any property may petition the county board of equalization for a change in the assessed valuation placed upon such property by the county assessor. Such petition must be made on forms prescribed or approved by the department of revenue and any petition not conforming to those requirements or not properly completed shall not be considered by the board. The petition must be filed with the board on or before July 1st of the year of the assessment ((or)), within thirty days after the date an assessment or value change notice has been mailed, or within a time limit of up to sixty days adopted by the county legislative authority, whichever is later. If a county legislative authority sets a time limit, the authority may not change the limit for three years from the adoption of the limit. (2) The board of equalization may waive the filing deadline if the petition is filed within a reasonable time after the filing deadline and the petitioner shows good cause for the late filing. The decision of the board of equalization regarding a waiver of the filing deadline is final and not appealable under RCW 84.08.130. Good cause may be shown by one or more of the following events or circumstances: (a) Death or serious illness of the taxpayer or his or her immediate family; (b) The taxpayer was absent from the address where the taxpayer normally receives the assessment or value change notice, was absent for more than fifteen days of the ((thirty)) days ((prior to)) allowed in subsection (1) of this section before the filing deadline, and the filing deadline is after July 1; (c) Incorrect written advice regarding filing requirements received from board of equalization staff, county assessor's staff, or staff of the property tax advisor designated under RCW 84.48.140; (d) Natural disaster such as flood or earthquake; (e) Delay or loss related to the delivery of the petition by the postal service, and documented by the postal service; or (f) Other circumstances as the department may provide by rule. (3) The owner or person responsible for payment of taxes on any property may request that the appeal be heard by the state board of tax appeals without a hearing by the county board of equalization when the assessor, the owner or person responsible for payment of taxes on the property, and a majority of the county board of equalization agree that a direct appeal to the state board of tax appeals is appropriate. The state board of tax appeals may reject the appeal, in which case the county board of equalization shall consider the appeal under RCW 84.48.010. Notice of such a rejection, together with the reason therefor, shall be provided to the affected parties and the county board of equalization within thirty days of receipt of the direct appeal by the state board." On motion of Senator McCaslin, the following title amendment was adopted:

On page 1, line 3 of the title, after "valuation;" strike the remainder of the title and insert "and amending RCW 84.40.038."

MOTION

On motion of Senator McCaslin, the rules were suspended, House Bill No. 1439, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1439, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1439, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 49. HOUSE BILL NO. 1439, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Wood, Senator Deccio was excused.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1757, by House Committee on Commerce and Labor (originally sponsored by Representatives Delvin, Sterk, Zellinsky and Hickel)

Revising security guard licensing and requirements.

The bill was read the second time.

MOTION

On motion of Senator Schow, the rules were suspended, Substitute House Bill No. 1757 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1757.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1757 and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 1; Excused, 1.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Fairley, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 47. Absent: Senator Finkbeiner - 1. Excused: Senator Deccio - 1. SUBSTITUTE HOUSE BILL NO. 1757, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 2117, by Representatives McMorris and Conway

Lowering the rate of taxation for social card games.

The bill was read the second time.

MOTION

On motion of Senator Schow, the rules were suspended, House Bill No. 2117 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 2117.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 2117 and the bill passed the Senate by the following vote: Yeas, 42; Nays, 5; Absent, 2; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Finkbeiner, Franklin, Fraser, Goings, Hale, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kohl, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, Winsley, Wojahn, Wood and Zarelli - 42. Voting nay: Senators Fairley, Hargrove, Kline, Long and Oke - 5. Absent: Senators Haugen and West - 2. HOUSE BILL NO. 2117, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

There being no objection, the Senate resumed consideration of Substitute House Bill No. 1657, deferred on April 15, 1997, after the amendments by Senator Rasmussen on page 1, line 14, and page 2, line 10 and after line 15, were ruled out of order.

MOTION

On motion of Senator Swecker, the rules were suspended, Substitute House Bill No. 1657 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

POINT OF INQUIRY

Senator Franklin: “Senator Brown, you mentioned that as a member of the Energy and Utilities Committee that this is a bill that should have come for preview before your committee and also, Senator, since it is, right now restricted, does this mean that the residents of my county, which is Pierce, could have a rate increase? I am very nervous about this bill.”

Senator Brown: “Senator Franklin, as I am not familiar with the specifics of the Pierce County situation, I believe it may be the case that the county, itself, is reviewing and setting rates for solid waste disposal in Pierce County. That is my understanding at this point. However, there are several other counties in the state where the UTC is in the position of doing that and this bill would require them to include charges of affiliated companies in the state, which they use to calculate customer rates.”

Senator Franklin: “Senator, just to follow up. You mentioned the regulation of a monopoly. Are we in the business of regulating monopolies? I thought competitiveness was what this country was built on.”

Senator Brown: “Senator Franklin, I think to understand this clearly, you might want to consider that in the case where a utility is granted a monopoly to service a specific group of customers, then in exchange for that right, the Utilities and Transportation Commission does review and regulate the charges that they are able to charge their customers--who are a captive group. So, in fact, yes, we do regulate monopolies and this particular bill would direct the UTC in a particular direction with respect to that regulation.”

Senator Franklin: “Thank you, Senator. I am still a bit nervous.”

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1657.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1657 and the bill passed the Senate by the following vote: Yeas, 34; Nays, 15; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Deccio, Goings, Hale, Heavey, Hochstatter, Horn, Johnson, Long, Loveland, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, West, Winsley, Wood and Zarelli - 34. Voting nay: Senators Brown, Fairley, Finkbeiner, Franklin, Fraser, Hargrove, Haugen, Jacobsen, Kline, Kohl, McAuliffe, Patterson, Prentice, Thibaudeau and Wojahn - 15. SUBSTITUTE HOUSE BILL NO. 1657, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Johnson, Engrossed Senate Bill No. 6072 and Engrossed Second Substitute House Bill No. 1303, as amended by the Senate, which passed the Senate earlier today, were ordered to be immediately transmitted to the House of Representatives.

There being no objection, the President advanced the Senate to the seventh order of business.

There being no objection, the Senate resumed consideration of Engrossed Substitute House Bill No. 1292, deferred on third reading April 15, 1997.

Debate ensued.

MOTION

Senator Haugen moved to suspend rules and return Engrossed Substitute House Bill No. 1292 to second reading.

Debate ensued.

Senator Haugen demanded a roll call and the demand was sustained.

The President declared the question before the Senate to be the roll call on the motion by Senator Haugen to suspend the rules and return Engrossed Substitute House Bill No. 1292 to second reading.

ROLL CALL

The Secretary called the roll and the motion to return the bill to second reading failed by the following vote: Yeas, 22; Nays, 27; Absent, 0; Excused, 0.

Voting yea: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Hargrove, Haugen, Heavey, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Rasmussen, Sheldon, Snyder, Spanel, Swanson and Thibaudeau - 22. Voting nay: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wojahn, Wood and Zarelli - 27. The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 1292.

Debate ensued.

CALL FOR PREVIOUS QUESTION

Senators Johnson, Schow and Anderson demanded the previous question.

Senator Sheldon demanded a roll call and the demand was sustained.

The President declared the question before the Senate to be the roll call on the demand for the previous question.

ROLL CALL

The Secretary called the roll and the demand for the previous question was sustained by the following vote: Yeas, 26; Nays, 23; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 26. Voting nay: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Hargrove, Haugen, Heavey, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Rasmussen, Sheldon, Snyder, Spanel, Swanson, Thibaudeau and Wojahn - 23. The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 1292.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 1292 and the bill passed the Senate by the following vote: Yeas, 25; Nays, 24; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Wood and Zarelli - 25. Voting nay: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Hargrove, Haugen, Heavey, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Rasmussen, Sheldon, Snyder, Spanel, Swanson, Thibaudeau, Winsley and Wojahn - 24. ENGROSSED SUBSTITUTE HOUSE BILL NO. 1292, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

Senator Sheldon moved that the remarks by Senators Goings and Haugen on the final passage of Engrossed Substitute House Bill No. 1292 be spread upon the Journal.

Senator McDonald objected.

Senator Sheldon demanded a roll call and the demand was sustained.

The President declared the question before the Senate to be the roll call on the motion by Senator Sheldon that the remarks by Senators Goings and Haugen on the final passage of Engrossed Substitute House Bill No. 1292 be spread upon the Journal.

ROLL CALL

The Secretary called the roll and the motion to spread the remarks upon the Journal failed by the following vote: Yeas, 23; Nays, 26; Absent, 0; Excused, 0.

Voting yea: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Hargrove, Haugen, Heavey, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Rasmussen, Sheldon, Snyder, Spanel, Swanson, Thibaudeau and Wojahn - 23. Voting nay: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 26.

MOTION

On motion of Senator Johnson, the Senate returned to the sixth order of business.

PERSONAL PRIVILEGE

Senator Swanson: “Mr. President, I think I rise to a point of personal privilege. I heard this wild rumor this morning that if this side of the aisle talks to much, that side of the aisle was going to call for the question. Believe it or not, it appears that has happened that way. I feel offended.”

POINT OF ORDER

Senator Johnson: “A point of order.” (microphone not activated)

REPLY BY THE PRESIDENT

President Owen: “Senator Johnson, I believe her remarks are within order and if she is concerned about an action of the Senate, she may rise to a point of personal privilege to explain that point. Senator Swanson.”

Senator Swanson: “Thank you, Mr. President, and members of the Senate. Democracy is a great thing. I came down here as a layman, learning as I went, learning from each of the speeches that I heard--and to be cut off from full debate when many of these bills we just had minutes and sometimes just a half hour to review before we were called to a full vote. I don't think that was right, so I wanted to let you all know how I felt. I don't think that was right and I don't think it was democratic.”

PARLIAMENTARY INQUIRY

Senator McCaslin: “Thank you, Mr. President. I guess I have a question of parliamentary procedure. Is it permissible for Senators to rise and question rumors about other sides or if I hear a rumor about the Democrats, should I get up and discuss that rumor in this body--or are we dealing with facts, Mr. President?”

REPLY BY THE PRESIDENT

President Owen: “I don' t believe that is a question the President should respond to, Senator McCaslin.”

Senator McCaslin: “Then, if there is no policy on that, then I assume we can proceed with rumors and personal points of privileges whenever we hear a rumor regardless of what the rumor is or what it says?”

President Owen: “Senator McCaslin, you can rise to a point of personal privilege; that is your privilege.”

Senator McCaslin: “On anything?”

President Owen: “I believe the President would exercise some discretion.”

Senator McCaslin: “I appreciate that, Mr. President.”

PERSONAL PRIVILEGE

Senator Franklin: “I rise to a point of personal privilege. I think we are getting a little bit testy. It is great to hear you laugh. Maybe we can get on with the business, Mr. President.”

REPLY BY THE PRESIDENT

President Owen: “I would hope so, Senator Franklin.”

Senator Franklin: “Thank you.”

SECOND READING

HOUSE BILL NO. 1420, by Representatives McDonald, Regala, Huff, Talcott, Conway, Smith, Mitchell, Fisher and Bush

Modifying local public health financing.

The bill was read the second time.

MOTION

On motion of Senator Winsley, the rules were suspended, House Bill No. 1420 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1420.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1420 and the bill passed the Senate by the following vote: Yeas, 44; Nays, 5; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Brown, Deccio, Fairley, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn and Wood - 44. Voting nay: Senators Benton, Finkbeiner, Hochstatter, Stevens and Zarelli - 5. HOUSE BILL NO. 1420, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1176, by House Committee on Criminal Justice and Corrections (originally sponsored by Representatives Koster, Boldt, Smith, Backlund, Dunn, McMorris, Schoesler, Sheldon, Johnson, DeBolt and Mulliken)

Adding child rape to the two strikes list.

The bill was read the second time.

MOTION

On motion of Senator Roach, the rules were suspended, Substitute House Bill No. 1176 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1176.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1176 and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 49. SUBSTITUTE HOUSE BILL NO. 1176, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SPECIAL ORDER OF BUSINESS

On motion of Senator Johnson, Second Substitute House Bill No. 2054 will be made a special order of business at 4:59 p.m. today.

SENATE RULE 34 CITED

Pursuant to Senate Rule 34, Senator Haugen requested that her remarks on the final passage of Engrossed Substitute House Bill No. 1292 be spread upon the Journal:

REMARKS BY SENATOR HAUGEN ON FINAL PASSAGE OF ENGROSSED SUBSTITUTE HOUSE BILL NO. 1292

Senator Haugen: "Well, I would disagree. What we are trying to do is to get a bill with some reasonable, what we consider reasonable, information to be available to the people who enroll in these retros. We are not asking for anything more than what you would get from your stock broker if you were buying stock. I think that we need to have this opportunity to roll this back and put, what I consider, a very, very reasonable amendment on it. With that, Mr. President, I would call for a roll call vote."

FURTHER REMARKS BY SENATOR HAUGEN ON FINAL PASSAGE OF ENGROSSED SUBSTITUTE HOUSE BILL NO. 1292

Senator Haugen: "Thank you, Mr. President. Well, I am reluctantly standing to ask you to vote 'no' on this bill. I feel really sad about this, because I really think that this has some real opportunity for a lot of small business people. What we were proposing was some reasonable information to be made to the employers, not the employees, to the employers to participate in this program--reasonable information about the refund that is coming back to them and how it is being spent. It was very, very tightly drafted. It provides the department and the retro employers that request it--not necessarily even mandating, they would have to ask for it--financial information on the use of the retrospective rating program refund. Such information would not have been subject to public inspection, not used as the basis of a financial audit and it could only be used in the aggregate for the study of the retro program to prove--to prove how well it was doing.

"What's the matter with that? This puts a big cloud over these programs, as far as I am concerned, when you won't even let the people know who are in these programs some basic information. If you invest in a stock company, you could get this information. No matter what you invest in, you could get this information. This is a reasonable amendment. To me, it would have helped prove how successful these could be, but without this amendment, I simply can't vote for this bill. I feel bad about that. Once again, the bully boys have won; they have won and I think it is unfortunate. A lot of work has gone into this, but I simply cannot vote for it."

SENATE RULE 34 CITED

Pursuant to Senate Rule 34, Senator Goings requested that his remarks on the final passage of Engrossed Substitute House Bill No. 1292 be spread upon the Journal:

REMARKS BY SENATOR GOINGS ON FINAL PASSAGE OF ENGROSSED SUBSTITUTE HOUSE BILL NO. 1292

Senator Goings: "Thank you, Mr. President. I am also rising to encourage the members of this chamber to vote 'no' and I am doing this--and it is very difficult to be doing this. I had planned to vote for this bill and it is very, very unfortunate that we were not even allowed to go back to the second reading to even consider the amendments that were put together in a bipartisan fashion--to hopefully address some of the concerns that we all share. Instead of having a bill that would have probably come out of here in a very bipartisan fashion with at least thirty 'yes' votes, we are going to have a bill that comes out in a straight party line and that is very, very unfortunate. So, all the people who are listening right now, there were a lot of us who did want to vote for the bill, but the process broke down. I urge all the members on this side of the aisle, and hopefully the members who believe in the process on the other side of the aisle to vote 'no' so we can look at this again--the right way. Thank you, Mr. President."

EDITOR'S NOTE: Senate Rule 34 states, 'Any senator or senators may protest against the action of the senate upon any question. Such protest may be entered upon the journal if it does not exceed 200 words. The senator protesting shall file the protest with the secretary of the senate within 48 hours following the action protested.'

MOTION

On motion of Senator McCaslin, the Senate advanced to the seventh order of business.

There being no objection, the Senate resumed consideration of Substitute House Bill No. 1280 on reconsideration, deferred on April 17, 1997.

MOTION

On motion of Senator Johnson, further consideration of Substitute House Bill No. 1280, on reconsideration, was deferred.

MOTION

On motion of Senator Johnson, the Senate returned to the sixth order of business.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1935, by House Committee on Government Reform and Land Use (originally sponsored by Representative Reams)

Permitting development of inherited property.

The bill was read the second time.

MOTION

Senator McCaslin moved that the following Committee on Government Operations amendment be adopted:

Strike everything after the enacting clause and insert the following: "NEW SECTION. Sec. 1. A new section is added to chapter 35.63 RCW to read as follows: (1) Notwithstanding any zoning provision pertaining to minimum lot sizes, inherited property that is exempt from subdivision and platting requirements pursuant to RCW 58.17.040(3) may be developed, so long as: (a) The property is developed for a use that is authorized for that property under current zoning laws; (b) Each lot that is created contains sufficient area for a single-family residence and an on-site sewage disposal system using any method of on-site sewage disposal appropriate for the lot under standards that exist when the lots are created, as determined by the local health department with such lot and on-site sewage disposal system submitted for final approval to the legislative body of the city or town within five years of the date of creation of the lot; (c) The people inheriting the property are immediate family members of the deceased; and (d) The number of parcels into which the property is divided equals no more than the number of immediate family members who inherit property under this section, not to exceed ten parcels. (2) For purposes of this section, "immediate family members" means a spouse, children, grandchildren, or parents. NEW SECTION. Sec. 2. A new section is added to chapter 35A.63 RCW to read as follows: (1) Notwithstanding any zoning provision pertaining to minimum lot sizes, inherited property that is exempt from subdivision and platting requirements pursuant to RCW 58.17.040(3) may be developed, so long as: (a) The property is developed for a use that is authorized for that property under current zoning laws; (b) Each lot that is created contains sufficient area for a single-family residence and an on-site sewage disposal system using any method of on-site sewage disposal appropriate for the lot under standards that exist when the lots are created, as determined by the local health department with such lot and on-site sewage disposal system submitted for final approval to the legislative body of the city within five years of the date of creation of the lot; (c) The people inheriting the property are immediate family members of the deceased; and (d) The number of parcels into which the property is divided equals no more than the number of immediate family members who inherit property under this section, not to exceed ten parcels. (2) For purposes of this section, "immediate family members" means a spouse, children, grandchildren, or parents. NEW SECTION. Sec. 3. A new section is added to chapter 36.70 RCW to read as follows: (1) Notwithstanding any zoning provision pertaining to minimum lot sizes, inherited property that is exempt from subdivision and platting requirements pursuant to RCW 58.17.040(3) may be developed, so long as: (a) The property is developed for a use that is authorized for that property under current zoning laws; (b) Each lot that is created contains sufficient area for a single-family residence and an on-site sewage disposal system using any method of on-site sewage disposal appropriate for the lot under standards that exist when the lots are created, as determined by the local health department with such lot and on-site sewage disposal system submitted for final approval to the legislative body of the county within five years of the date of creation of the lot; (c) The people inheriting the property are immediate family members of the deceased; and (d) The number of parcels into which the property is divided equals no more than the number of immediate family members who inherit property under this section, not to exceed ten parcels. (2) For purposes of this section, "immediate family members" means a spouse, children, grandchildren, or parents. NEW SECTION. Sec. 4. A new section is added to chapter 36.70A RCW to read as follows: (1) Notwithstanding any zoning provision pertaining to minimum lot sizes, inherited property that is exempt from subdivision and platting requirements pursuant to RCW 58.17.040(3) may be developed, so long as: (a) The property is developed for a use that is authorized for that property under current zoning laws; (b) Each lot that is created contains sufficient area for a single-family residence and an on-site sewage disposal system using any method of on-site sewage disposal appropriate for the lot under standards that exist when the lots are created, as determined by the local health department with such lot and on-site sewage disposal system submitted for final approval to the legislative body of the county, city, or town within five years of the date of creation of the lot; (c) The people inheriting the property are immediate family members of the deceased; and (d) The number of parcels into which the property is divided equals no more than the number of immediate family members who inherit property under this section, not to exceed ten parcels. (2) For purposes of this section, "immediate family members" means a spouse, children, grandchildren, or parents." Debate ensued.

CALL FOR PREVIOUS QUESTION

Senators Johnson, Sellar and McCaslin called for the previous question and the demand was sustained on a rising vote.

The President declared the question before the Senate to be the adoption of the Committee on Government Operations striking amendment to Substitute House Bill No. 1935.

The motion by Senator McCaslin carried and the committee striking amendment was adopted.

MOTIONS

On motion of Senator McCaslin, the following title amendment was adopted:

On page 1, line 1 of the title, after "property;" strike the remainder of the title and insert "adding a new section to chapter 35.63 RCW; adding a new section to chapter 35A.63 RCW; adding a new section to chapter 36.70 RCW; and adding a new section to chapter 36.70A RCW." On motion of Senator McCaslin, the rules were suspended, Substitute House Bill No. 1935, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1935, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1935, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 30; Nays, 19; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Deccio, Finkbeiner, Hale, Hargrove, Heavey, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 30. Voting nay: Senators Brown, Fairley, Franklin, Fraser, Goings, Haugen, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Sheldon, Snyder, Spanel, Swanson, Thibaudeau and Wojahn - 19. SUBSTITUTE HOUSE BILL NO. 1935, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1086, by House Committee on Education (originally sponsored by Representatives Mulliken, Johnson, Koster, Sump, Thompson, Crouse, Mielke and Sherstad)

Establishing criteria that limit school employees' ability to remove students from school.

The bill was read the second time.

PARLIAMENTARY INQUIRY

Senator Snyder: “A parliamentary inquiry, Mr. President. This doesn't seem to be on any of the four sheets here and I would like to be able to find it on one of the two calendars before we get into discussion.”

REPLY BY THE PRESIDENT

President Owen: “The bill is on page 73 of volume 2 of your yellow calendar.”

Senator Snyder: “Thank you. I appreciate it.”

MOTIONS

Senator Hochstatter moved that the following Committee on Education amendment be adopted:

Strike everything after the enacting clause and insert the following: "Sec. 1. RCW 28A.605.010 and 1975 1st ex.s. c 248 s 1 are each amended to read as follows: The board of directors of each school district by rule or regulation shall set forth proper procedure to ensure that each school within their district is carrying out district policy providing that no child ((will)) may be removed from any school grounds or building thereon during school hours except by a person so authorized by a parent or legal guardian having legal custody thereof((: PROVIDED, That such rules and regulations need not be applicable to any child in grades nine through twelve)). Such rules shall be applicable to school employees or their designees who may not remove, cause to be removed, or allow to be removed, any student from school grounds without authorization from the student's parent or legal guardian unless the employee is: The student's parent, legal guardian, or immediate family member, a school employee providing school bus transportation services in accordance with chapter 28A.160 RCW, a school employee supervising an extracurricular activity in which the student is participating and the employee is providing transportation to or from the activity; or, the student is in need of emergent medical care, and the employee is unable to reach the parent for transportation of the student. School security personnel may remove a student from school grounds without parental authorization for disciplinary reasons. Nothing in this section shall be construed to limit removal of a student from school grounds by any person acting in his or her official capacity in response to a 911 emergency call." On motion of Senator Zarelli, the following amendment by Senators Zarelli and McAuliffe to the Committee on Education striking amendment was adopted:

On page 1, line 16, after "twelve))" insert the following: ", except that students who have gained consent may leave secondary school grounds during lunch hours in accordance with the school district's open campus lunch policy under RCW 28A.600.035" The President declared the question before the Senate to be the adoption of the Committee on Education striking amendment, as amended, to Substitute House Bill No. 1086.

The committee striking amendment, as amended, was adopted.

MOTIONS

On motion of Senator Hochstatter, the following title amendment was adopted:

On page 1, line 1 of the title, after "grounds;" strike the remainder of the title and insert "and amending RCW 28A.605.010." On motion of Senator Hochstatter, the rules were suspended, Substitute House Bill No. 1086, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1086, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1086, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 48; Nays, 1; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wood and Zarelli - 48. Voting nay: Senator Wojahn - 1. SUBSTITUTE HOUSE BILL NO. 1086, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE JOINT RESOLUTION NO. 4208, by Representatives Wensman, B. Thomas, H. Sommers, Talcott, Cole, Regala, Constantine, Ballasiotes, Radcliff, D. Schmidt, Carlson, Clements, Dyer, Bush, Johnson, Cairnes, Quall, Morris, Keiser, Linville, Sterk, Dunn, Blalock, Hatfield, Dickerson, Conway, Thompson, Scott, Wood, O'Brien, Backlund, Cooke, Costa, Ogden, Cody, Kessler, Kenney, Cooper and Gardner

Allowing school levies for four-year periods.

The joint resolution was read the second time.

MOTION

On motion of Senator Johnson, the rules were suspended, House Joint Resolution No. 4208 was advanced to third reading, the second reading considered the third and the joint resolution was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Joint Resolution No. 4208.

ROLL CALL

The Secretary called the roll on the final passage of House Joint Resolution No. 4208 and the joint resolution passed the Senate by the following vote: Yeas, 40; Nays, 9; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Sellar, Sheldon, Snyder, Spanel, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn and Wood - 40. Voting nay: Senators Benton, Hochstatter, Morton, Newhouse, Rossi, Schow, Stevens, Strannigan and Zarelli - 9. HOUSE JOINT RESOLUTION NO. 4208, having received the constitutional majority, was declared passed.

SECOND READING

HOUSE BILL NO. 2011, by Representatives Wensman, Cole, H. Sommers, Talcott, B. Thomas, Regala, Constantine, Ballasiotes, Radcliff, D. Schmidt, Carlson, Clements, Dyer, Bush, Johnson, Cairnes, Quall, Morris, Keiser, Linville, Veloria, L. Thomas, Backlund, Cooke, Kenney, Poulsen, Hatfield, Dickerson, Ogden, Kessler, Blalock, Tokuda, Conway, Costa and Honeyford

Authorizing school levies for periods not exceeding four years.

The bill was read the second time.

MOTION

On motion of Senator Johnson, the rules were suspended, House Bill No. 2011 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 2011.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 2011 and the bill passed the Senate by the following vote: Yeas, 41; Nays, 8; Absent, 0; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Oke, Patterson, Prentice, Prince, Rasmussen, Sellar, Sheldon, Snyder, Spanel, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn and Wood - 41. Voting nay: Senators Hochstatter, Newhouse, Roach, Rossi, Schow, Stevens, Strannigan and Zarelli - 8. HOUSE BILL NO. 2011, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

NOTICE FOR RECONSIDERATION

Having voted on the prevailing side, Senator Benton served notice that he would move to reconsider the vote by which House Bill No. 2011 passed the Senate.

SECOND READING

HOUSE BILL NO. 1267, by Representatives B. Thomas, Zellinsky and Dickerson

Providing a use tax exemption for vessel manufacturers and dealers.

The bill was read the second time.

MOTION

On motion of Senator West, the rules were suspended, House Bill No. 1267 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1267.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1267 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 1; Excused, 0.

Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, Snyder, Spanel, Stevens, Strannigan, Swanson, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 48. Absent: Senator Goings - 1. HOUSE BILL NO. 1267, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

STATEMENT FOR THE JOURNAL

I missed voting on Engrossed Second Substitute House Bill No. 1866 because of a family emergency. As the record now stands, the roll call shows that I was excused. I would like to go on record that had I been able to be in session at the time the vote was taken, I would have voted 'no' on this bill.

SENATOR LISA BROWN, Third District

STATEMENT FOR THE JOURNAL

Please let the journal record show that had Senator Patterson not been excused, she would have been a 'nay' vote on Engrossed Second Substitute House Bill No. 1866, as amended by the Senate. Thank you.

SENATOR JULIA PATTERSON, Thirty-third District

SECOND READING

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1866, by House Committee on Appropriations (originally sponsored by Representatives Chandler, Linville, Lisk, Delvin and Schoesler)

Allowing for the creation of environmental excellence program agreements.

The bill was read the second time.

MOTION

On motion of Senator Morton, the following Committee on Agriculture and Environment striking amendment was not adopted:

Strike everything after the enacting clause and insert the following: "NEW SECTION. Sec. 1. The purpose of this act is to create a voluntary program authorizing environmental excellence program agreements with persons regulated under the environmental laws of the state of Washington, and to direct agencies of the state of Washington to solicit and support the development of agreements that use innovative environmental measures or strategies to achieve environmental results more effectively or efficiently. Agencies shall encourage environmental excellence program agreements that favor or promote pollution prevention, source reduction, or improvements in practices that are transferable to other interested entities or that can achieve better overall environmental results than required by otherwise applicable rules and requirements. In enacting this act it is not the intent of the legislature that state environmental standards be applied in a manner that could result in these state standards being waived under section 121 of the federal comprehensive environmental response, compensation, and liability act (42 U.S.C. Sec. 9261). NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise. (1) "State, regional, or local agency" means an agency, board, department, authority, or commission that administers environmental laws. (2) "Coordinating agency" means the state, regional, or local agency with the primary regulatory responsibility for the proposed environmental excellence program agreement. If multiple agencies have jurisdiction to administer state environmental laws affected by an environmental excellence agreement, the department of ecology shall designate or act as the coordinating agency. (3) "Director" means the individual or body of individuals in whom the ultimate legal authority of an agency is vested by any provision of law. If the agency head is a body of individuals, a majority of those individuals constitutes the director. (4) "Environmental laws" means chapters 43.21A, 70.94, 70.95, 70.105, 70.119A, 75.20, 90.48, 90.52, 90.58, 90.64, and 90.71 RCW, and RCW 90.54.020(3)(b) and rules adopted under those chapters and section. The term environmental laws as used in this chapter does not include any provision of the Revised Code of Washington, or of any municipal ordinance or enactment, that regulates the selection of a location for a new facility. (5) "Facility" means a site or activity that is regulated under any of the provisions of the environmental laws. (6) "Legal requirement" includes any provision of an environmental law, rule, order, or permit. (7) "Sponsor" means the owner or operator of a facility, including a municipal corporation, subject to regulation under the environmental laws of the state of Washington, or an authorized representative of the owner or operator, that submits a proposal for an environmental excellence program agreement. (8) "Stakeholder" means a person who has a direct interest in the proposed environmental excellence program agreement or who represents a public interest in the proposed environmental excellence program agreement. Stakeholders may include communities near the project, local or state governments, permittees, businesses, environmental and other public interest groups, employees or employee representatives, or other persons. NEW SECTION. Sec. 3. An environmental excellence program agreement entered into under this chapter must achieve more effective or efficient environmental results than the results that would be otherwise achieved. The basis for comparison shall be a reasonable estimate of the overall impact of the participating facility on the environment in the absence of an environmental excellence program agreement. More effective environmental results are results that are better overall than those that would be achieved under the legal requirements superseded or replaced by the agreement. More efficient environmental results are results that are achieved at reduced cost but do not decrease the overall environmental results achieved by the participating facility. An environmental excellence program agreement may not authorize either (1) the release of pollutants that will exceed, at established points of compliance in the ambient environment, numeric ambient air quality standards adopted as rules under chapter 70.94 RCW or numeric surface water or ground water quality criteria or numeric sediment quality criteria adopted as rules under chapter 90.48 RCW; or (2) a decrease in the overall environmental results achieved by the participating facility compared with results achieved over a representative period before the date on which the agreement is proposed by the sponsor. However, an environmental excellence program agreement may authorize reasonable increases in the release of pollutants to permit increases in facility production or facility expansion. NEW SECTION. Sec. 4. (1) The director of a state, regional, or local agency may enter into an environmental excellence program agreement with any sponsor, even if one or more of the terms of the environmental excellence program agreement would be inconsistent with an otherwise applicable legal requirement. An environmental excellence program agreement must meet the requirements of section 3 of this act. Otherwise applicable legal requirements identified according to section 7(1) of this act shall be superseded and replaced in accordance with section 9 of this act. (2) The director of a state, regional, or local agency may enter into an environmental excellence program agreement only to the extent the state, regional, or local agency has jurisdiction to administer state environmental laws either directly or indirectly through the adoption of rules. (3) Where a sponsor proposes an environmental excellence program agreement that would affect legal requirements applicable to the covered facility that are administered by more than one state, regional, or local agency, the coordinating agency shall take the lead in developing the environmental excellence program agreement with the sponsor and other agencies administering legal requirements applicable to the covered facility and affected by the agreement. To be effective, the environmental excellence program agreement must be signed by the director of each agency administering legal requirements identified according to section 7(1) of this act. (4) No director may enter into an environmental excellence program agreement applicable to a remedial action conducted under the Washington model toxics control act, chapter 70.105D RCW, or the federal comprehensive environmental response, compensation and liability act (42 U.S.C. Sec. 9601 et seq). No action taken under this chapter shall be deemed a waiver of any applicable, relevant, or appropriate requirements for any remedial action conducted under the Washington model toxics control act or the federal comprehensive environmental response, compensation and liability act. (5) The directors of state, regional, or local agencies shall not enter into an environmental excellence program agreement or a modification of an environmental excellence program agreement containing terms affecting legal requirements adopted to comply with provisions of a federal regulatory program and to which the responsible federal agency objects after notice under the terms of section 8(4) of this act. (6) The directors of regional or local governments may not enter into an environmental excellence program agreement or a modification of an environmental excellence program agreement containing terms affecting legal requirements that are subject to review or appeal by a state agency, including but not limited to chapters 70.94, 70.95, and 90.58 RCW, and to which the responsible state agency objects after notice is given under the terms of section 8(4) of this act. NEW SECTION. Sec. 5. (1) A sponsor may propose an environmental excellence program agreement. A trade association or other authorized representative of a sponsor or sponsors may propose a programmatic environmental excellence program agreement for multiple facilities. (2) A sponsor must submit, at a minimum, the following information and other information that may be requested by the director or directors required to sign the agreement: (a) A statement that describes how the proposal is consistent with the purpose of this chapter and the project approval criteria in section 3 of this act; (b)(i) For a site-specific proposal, a comprehensive description of the proposed environmental excellence project that includes the nature of the facility and the operations that will be affected, how the facility or operations will achieve results more effectively or efficiently, and the nature of the results anticipated; or (ii) For a programmatic proposal, a comprehensive description of the proposed environmental excellence project that identifies the facilities and the operations that are expected to participate, how participating facilities or operations will achieve environmental results more effectively or efficiently, the nature of the results anticipated, and the method to identify and document the commitments made by individual participants; (c) An environmental checklist, containing sufficient information to reasonably inform the public of the nature of the proposed environmental excellence program agreement and describing probable significant adverse environmental impacts and environmental benefits expected from implementation of the proposal; (d) A draft environmental excellence program agreement; (e) A description of the stakeholder process as provided in section 6 of this act; (f) A preliminary identification of the permit amendments or modifications that may be necessary to implement the proposed environmental excellence program agreement. NEW SECTION. Sec. 6. (1) Stakeholder participation in and support for an environmental excellence program agreement is vital to the integrity of the environmental excellence program agreement and helps to inform the decision whether an environmental excellence program agreement can be approved. (2) A proposal for an environmental excellence program agreement shall include the sponsor's plan to identify and contact stakeholders, to advise stakeholders of the facts and nature of the project, and to request stakeholder participation and review. Stakeholder participation and review shall occur during the development, consideration, and implementation stages of the proposed environmental excellence program agreement. The plan shall include notice to the employees of the facility to be covered by the proposed environmental excellence program agreement and public notice in the area of the covered facility. (3) The coordinating agency shall extend an invitation to participate in the development of the proposal to a broad and representative sector of the public likely to be affected by the environmental excellence program agreement, including representatives of local community, labor, environmental, and neighborhood advocacy groups. The coordinating agency shall select participants to be included in the stakeholder process that are representative of the diverse sectors of the public that are interested in the agreement. The stakeholder process shall include the opportunity for discussion and comment at multiple stages of the process and access to the information relied upon by the directors in approving the agreement. (4) The coordinating agency will identify any additional provisions for the stakeholder process that the director of the coordinating agency, in the director's sole discretion, considers appropriate to the success of the stakeholder process, and provide for notice to the United States environmental protection agency or other responsible federal agency of each proposed environmental excellence program agreement that may affect legal requirements of any program administered by that agency. NEW SECTION. Sec. 7. An environmental excellence program agreement must contain the following terms and conditions: (1) An identification of all legal requirements that are superseded or replaced by the environmental excellence program agreement; (2) A description of all legal requirements that are enforceable as provided in section 13(1) of this act that are different from those legal requirements applicable in the absence of the environmental excellence program agreement; (3) A description of the voluntary goals that are or will be pursued by the sponsor; (4) A statement describing how the environmental excellence program agreement will achieve the purposes of this chapter; (5) A statement describing how the environmental excellence program agreement will be implemented, including a list of steps and an implementation schedule; (6) A statement that the proposed environmental excellence program agreement will not increase overall worker safety risks or cause an unjust or disproportionate and inequitable distribution of environmental risks among diverse economic and cultural communities; (7) A summary of the stakeholder process that was followed in the development of the environmental excellence program agreement; (8) A statement describing how any participating facility shall measure and demonstrate its compliance with the environmental excellence program agreement including, without limitation, a description of the methods to be used to monitor performance, criteria that represent acceptable performance, and the method of reporting performance to the public and local communities. The facility's compliance with the agreement must be independently verifiable; (9) A description of and plan for public participation in the implementation of the environmental excellence program agreement and for public access to information needed to assess the benefits of the environmental excellence program agreement and the sponsor's compliance with the environmental excellence program agreement; (10) A schedule of periodic performance review of the environmental excellence program agreement by the directors that signed the agreement; (11) Provisions for voluntary and involuntary termination of the agreement; (12) The duration of the environmental excellence program agreement and provisions for renewal; (13) Statements approving the environmental excellence program agreement made by the sponsor and by or on behalf of directors of each state, regional, or local agency administering legal requirements that are identified according to section 7(1) of this act; (14) Additional terms as requested by the directors signing the environmental excellence program agreement and consistent with this chapter; (15) Draft permits or permit modifications as needed to implement the environmental excellence program agreement; (16) With respect to a programmatic environmental excellence program agreement, a statement of the method with which to identify and document the specific commitments to be made by individual participants. NEW SECTION. Sec. 8. (1) The coordinating agency shall provide at least thirty days after notice has been published in a newspaper under subsection (2) of this section for public comment on a proposal to enter into or modify an environmental excellence program agreement. The coordinating agency may provide for an additional period of public comment if required by the complexity of the proposed environmental excellence program agreement and the degree of public interest. Before the start of the comment period, the coordinating agency shall prepare a proposed agreement, a public notice and a fact sheet. The fact sheet shall: (a) Briefly describe the principal facts and the significant factual, legal, methodological and policy questions considered by the directors signing the agreement, and the directors' proposed decisions; and (b) briefly describe how the proposed action meets the requirements of section 3 of this act. (2) The coordinating agency shall publish notice of the proposed agreement in the Washington State Register and in a newspaper of general circulation in the vicinity of the facility or facilities covered by the proposed environmental excellence program agreement. The notice shall generally describe the agreement or modification; the facilities to be covered; summarize the changes in legal requirements that will result from the agreement; summarize the reasons for approving the agreement or modifications; identify an agency person to contact for additional information; state that the proposed agreement or modification and fact sheet are available on request; and state that comments may be submitted to the agency during the comment period. The coordinating agency shall order a public informational meeting or a public hearing to receive oral comments if the written comments during the comment period demonstrate considerable public interest in the proposed agreement. (3) The coordinating agency shall prepare and make available a responsiveness summary indicating the agencies' actions taken in response to comments and the reasons for those actions. (4) With respect to an environmental excellence program agreement that affects legal requirements adopted to comply with provisions of a federal regulatory program, the coordinating agency shall provide a copy of the environmental excellence program agreement, and a copy of the notice required by subsection (1) of this section, to the federal agency that is responsible for administering that program at least thirty days before entering into or modifying the environmental excellence program agreement, and shall afford the federal agency the opportunity to object to those terms of the environmental excellence program agreement or modification of an environmental excellence program agreement affecting the legal requirements. Regional or local governments shall provide similar notice to state agencies that have statutory review or appeal responsibilities regarding provisions of the environmental excellence program agreement. NEW SECTION. Sec. 9. (1) Notwithstanding any other provision of law, any legal requirement identified under section 7(1) of this act shall be superseded or replaced in accordance with the terms of the environmental excellence program agreement. Legal requirements contained in a permit that are affected by an environmental excellence program agreement will continue to be enforceable until such time as the permit is revised in accordance with subsection (2) of this section. With respect to any other legal requirements, the legal requirements contained in the environmental excellence program agreement, are effective as provided by the environmental excellence program agreement, and the facility or facilities covered by an environmental excellence program agreement shall comply with the terms of the environmental excellence program agreement in lieu of the legal requirements that are superseded and replaced by the approved environmental excellence program agreement. (2) Any permits affected by an environmental excellence program agreement shall be revised to conform to the environmental excellence program agreement by the agency with jurisdiction. The permit revisions will be completed within one hundred twenty days of the effective date of the agreement in accordance with otherwise applicable procedural requirements, including, where applicable, public notice and the opportunity for comment, and the opportunity for review and objection by federal agencies. (3) Other than as superseded or replaced as provided in an approved environmental excellence program agreement, any existing permit requirements remain in effect and are enforceable. (4) A programmatic environmental excellence program agreement shall become applicable to an individual facility when the director or directors entering into the programmatic agreement approve the owner or operator's commitment to comply with the agreement. A programmatic agreement may not take effect, however, until notice and an opportunity to comment for the individual facility has been provided in accordance with the requirements of section 8 (1) through (3) of this act. NEW SECTION. Sec. 10. (1) A decision by the directors of state, regional, or local agencies to approve a proposed environmental excellence program agreement, or to terminate or modify an approved environmental excellence program agreement, is subject to judicial review in superior court. For purposes of judicial review, the court may grant relief from the decision to approve or modify an environmental excellence program agreement only if it determines that the action: (a) Violates constitutional provisions; (b) exceeds the statutory authority of the agency; (c) was arbitrary and capricious; or (d) was taken without compliance with the procedures provided by this chapter. However, the decision of the director or directors shall be accorded substantial deference by the court. A decision not to enter into or modify an environmental excellence program agreement and a decision not to accept a commitment under section 9(4) of this act to comply with the terms of a programmatic environmental excellence agreement are within the sole discretion of the directors of the state, regional, or local agencies and are not subject to review. (2) An appeal from a decision to approve or modify a facility specific or a programmatic environmental excellence program agreement is not timely unless filed with the superior court and served on the parties to the environmental excellence program agreement within thirty days of the date on which the agreement or modification is signed by the director. For an environmental excellence program agreement or modification signed by more than one director, there is only one appeal, and the time for appeal shall run from the last date on which the agreement or modification is signed by a director. (3) A decision to accept the commitment of a specific facility to comply with the terms of a programmatic environmental excellence program agreement, or to modify the application of an agreement to a specific facility, is subject to judicial review as described in subsection (1) of this section. An appeal is not timely unless filed with the superior court and served on the directors signing the agreement, the sponsor, and the owner or operator of the specific facility within thirty days of the date the director or directors that signed the programmatic agreement approve the owner or operator's commitment to comply with the agreement. For a programmatic environmental excellence program agreement or modification signed by more than one director, there shall be only one appeal and the time for appeal shall run from the last date on which a director approves the commitment. (4) The issuance of permits and permit modifications is subject to review under otherwise applicable law. (5) An appeal of a decision by a director under section 11 of this act to terminate in whole or in part a facility specific or programmatic environmental excellence program agreement is not timely unless filed with the superior court and served on the director within thirty days of the date on which notice of the termination is issued under section 11(2) of this act. NEW SECTION. Sec. 11. (1) In addition to any termination provisions contained in an environmental excellence program agreement, a director of an agency may terminate an environmental excellence program agreement in whole or in part with respect to a legal requirement administered by that agency, if the director finds: (a) That after notice and a reasonable opportunity to cure, the covered facility is in violation of a material requirement of the agreement; (b) that the facility has repeatedly violated any requirements of the agreement; (c) that the operation of the facility under the agreement has caused endangerment to public health or the environment that cannot be remedied by modification of the agreement; or (d) the facility has failed to make substantial progress in achieving the voluntary goals identified under section 6(4) of this act, and these goals are material to the overall objectives of the agreement. (2) A director of an agency terminating an environmental excellence program agreement in any respect shall provide each of the parties to the agreement with a written notice of that action specifying the extent to which the environmental excellence program agreement is to be terminated, the factual and legal basis for termination, and a description of the opportunity for judicial review of the decision to terminate the environmental excellence program agreement. (3) If a director terminates less than the entire environmental excellence program agreement, the owner or operator of the covered facility may elect to terminate the entire agreement as it applies to the facility. (4) If a director decides to terminate an environmental excellence program agreement because the facility has not been able to meet the legal requirements established under the agreement, or because operation of the facility under the agreement has caused endangerment to public health or the environment, as provided in subsection (1)(c) of this section, the director may establish in the notice of termination: (a) Practical interim requirements for the facility that are no less stringent than the legal requirements that would apply to the facility in the absence of the agreement; and (b) a practical schedule of compliance for meeting the interim requirements. The interim requirements and schedule of compliance shall be subject to judicial review under the provisions of section 10(5) of this act. The facility shall comply with the interim requirements established under this subsection after they are final and no longer subject to judicial review until applicable permits or permit modifications have been issued under section 12 of this act. NEW SECTION. Sec. 12. After a termination under section 11 of this act is final and no longer subject to judicial review, the sponsor has sixty days in which to apply for any permit or approval affected by any terminated portion of the environmental excellence program agreement. An application filed during the sixty-day period shall be deemed a timely application for renewal of a permit under the terms of any applicable law. Except as provided in section 11(4) of this act, the terms and conditions of the environmental excellence program agreement and of permits issued will continue in effect until a final permit or approval is issued. If the sponsor fails to submit a timely or complete application, any affected permit or approval may be modified at any time that is consistent with applicable law. NEW SECTION. Sec. 13. (1) The legal requirements contained in the environmental excellence program agreement in accordance with section 7(2) of this act are enforceable commitments of the facility covered by the agreement. Any violation of these legal requirements is subject to penalties and remedies to the same extent as the legal requirements that they superseded or replaced. (2) The voluntary goals stated in the environmental excellence program agreement in accordance with section 7(3) of this act are voluntary commitments of the facility covered by the agreement. If the facility fails to meet these goals, it shall not be subject to any form of enforcement action, including penalties, orders, or any form of injunctive relief. The failure to make substantial progress in meeting these goals may be a basis on which to terminate the environmental excellence program agreement under section 11 of this act. (3) Nothing in this chapter limits the authority of an agency, the attorney general, or a prosecuting attorney to initiate an enforcement action for violation of any applicable legal requirement. However, no civil, criminal, or administrative action may be brought with respect to any legal requirement that is superseded or replaced under the terms of an environmental excellence program agreement. (4) This chapter does not create any new authority for citizen suits, and does not alter or amend other statutory provisions authorizing citizen suits. NEW SECTION. Sec. 14. An environmental excellence program agreement may contain a reduced fee schedule with respect to a program applicable to the covered facility or facilities. NEW SECTION. Sec. 15. A decision to approve an environmental excellence program agreement is not subject to the requirements of the state environmental policy act, chapter 43.21C RCW, including the requirement to prepare an environmental impact statement under RCW 43.21C.031. However, the consideration of a proposed environmental excellence program agreement will integrate an assessment of environmental impacts. NEW SECTION. Sec. 16. Any state, regional, or local agency administering programs under an environmental law may adopt rules or ordinances to implement this chapter. However, it is not necessary that an agency adopt rules or ordinances in order to consider or enter into environmental excellence program agreements. NEW SECTION. Sec. 17. The director of the department of ecology shall appoint an advisory committee to review the effectiveness of the environmental excellence program agreement program and to make a recommendation to the legislature concerning the continuation, termination, or modification of the program. The committee also may make recommendations it considers appropriate for revision of any regulatory program that is affected by an environmental excellence program agreement. The committee shall be composed of one representative each from two state agencies, two representatives of the regulated community, and two representatives of environmental organizations or other public interest groups. The committee must submit a report and its recommendation to the legislature not later than October 31, 2001. The department of ecology shall provide the advisory committee with such support as they may require. NEW SECTION. Sec. 18. (1) Agencies authorized to enter into environmental excellence program agreements may assess and collect a fee to recover the costs of processing environmental excellence program agreement proposals. The amount of the fee may not exceed the direct and indirect costs of processing the environmental excellence program agreement proposal. Processing includes, but is not limited to: Working with the sponsor to develop the agreement, meeting with stakeholder groups, conducting public meetings and hearings, preparing a record of the decision to enter into or modify an agreement, and defending any appeal from a decision to enter into or modify an agreement. Fees also may include, to the extent specified by the agreement, the agencies' direct costs of monitoring compliance with those specific terms of an agreement not covered by permits issued to the participating facility. (2) Agencies assessing fees may graduate the initial fees for processing an environmental excellence program agreement proposal to account for the size of the sponsor and to make the environmental excellence program agreement program more available to small businesses. An agency may exercise its discretion to waive all or any part of the fees. (3) Sponsors may voluntarily contribute funds to the administration of an agency's environmental excellence program agreement program. NEW SECTION. Sec. 19. The authority of a director to enter into a new environmental excellence program agreement program shall be terminated June 30, 2002. Environmental excellence program agreements entered into before June 30, 2002, shall remain in force and effect subject to the provisions of this chapter. NEW SECTION. Sec. 20. A new section is added to chapter 43.21A RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 21. A new section is added to chapter 70.94 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 22. A new section is added to chapter 70.95 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 23. A new section is added to chapter 70.105 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 24. A new section is added to chapter 70.119A RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 25. A new section is added to chapter 75.20 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 26. A new section is added to chapter 90.48 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 27. A new section is added to chapter 90.52 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 28. A new section is added to chapter 90.58 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 29. A new section is added to chapter 90.64 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 30. A new section is added to chapter 90.71 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). Sec. 31. RCW 90.54.020 and 1989 c 348 s 1 are each amended to read as follows: Utilization and management of the waters of the state shall be guided by the following general declaration of fundamentals: (1) Uses of water for domestic, stock watering, industrial, commercial, agricultural, irrigation, hydroelectric power production, mining, fish and wildlife maintenance and enhancement, recreational, and thermal power production purposes, and preservation of environmental and aesthetic values, and all other uses compatible with the enjoyment of the public waters of the state, are declared to be beneficial. (2) Allocation of waters among potential uses and users shall be based generally on the securing of the maximum net benefits for the people of the state. Maximum net benefits shall constitute total benefits less costs including opportunities lost. (3) The quality of the natural environment shall be protected and, where possible, enhanced as follows: (a) Perennial rivers and streams of the state shall be retained with base flows necessary to provide for preservation of wildlife, fish, scenic, aesthetic and other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served. (b) Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served. Technology-based effluent limitations or standards for discharges for municipal water treatment plants located on the Chehalis, Columbia, Cowlitz, Lewis, or Skagit river shall be adjusted to reflect credit for substances removed from the plant intake water if: (i) The municipality demonstrates that the intake water is drawn from the same body of water into which the discharge is made; and (ii) The municipality demonstrates that no violation of receiving water quality standards or appreciable environmental degradation will result. (4) Adequate and safe supplies of water shall be preserved and protected in potable condition to satisfy human domestic needs. (5) Multiple-purpose impoundment structures are to be preferred over single-purpose structures. Due regard shall be given to means and methods for protection of fishery resources in the planning for and construction of water impoundment structures and other artificial obstructions. (6) Federal, state, and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out practices of conservation as they relate to the use of the waters of the state. In addition to traditional development approaches, improved water use efficiency and conservation shall be emphasized in the management of the state's water resources and in some cases will be a potential new source of water with which to meet future needs throughout the state. (7) Development of water supply systems, whether publicly or privately owned, which provide water to the public generally in regional areas within the state shall be encouraged. Development of water supply systems for multiple domestic use which will not serve the public generally shall be discouraged where water supplies are available from water systems serving the public. (8) Full recognition shall be given in the administration of water allocation and use programs to the natural interrelationships of surface and ground waters. (9) Expressions of the public interest will be sought at all stages of water planning and allocation discussions. (10) Water management programs, including but not limited to, water quality, flood control, drainage, erosion control and storm runoff are deemed to be in the public interest. (11) Notwithstanding any other provision of law, any legal requirement under this section, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 32. The environmental excellence account is hereby created in the state treasury. All fees and voluntary contributions collected by state agencies under section 18 of this act shall be deposited into the account. Except for unanticipated receipts under RCW 43.79.260 through 43.79.282, moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for purposes consistent with the environmental excellence program created under sections 2 through 19 of this act. NEW SECTION. Sec. 33. Sections 2 through 19 of this act constitute a new chapter in Title 43 RCW."

MOTIONS

Senator Morton moved that the following amendment be adopted;

Strike everything after the enacting clause and insert the following: "NEW SECTION. Sec. 1. The purpose of this act is to create a voluntary program authorizing environmental excellence program agreements with persons regulated under the environmental laws of the state of Washington, and to direct agencies of the state of Washington to solicit and support the development of agreements that use innovative environmental measures or strategies to achieve environmental results more effectively or efficiently. Agencies shall encourage environmental excellence program agreements that favor or promote pollution prevention, source reduction, or improvements in practices that are transferable to other interested entities or that can achieve better overall environmental results than required by otherwise applicable rules and requirements. In enacting this act it is not the intent of the legislature that state environmental standards be applied in a manner that could result in these state standards being waived under section 121 of the federal comprehensive environmental response, compensation, and liability act (42 U.S.C. Sec. 9261). NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise. (1) "State, regional, or local agency" means an agency, board, department, authority, or commission that administers environmental laws. (2) "Coordinating agency" means the state, regional, or local agency with the primary regulatory responsibility for the proposed environmental excellence program agreement. If multiple agencies have jurisdiction to administer state environmental laws affected by an environmental excellence agreement, the department of ecology shall designate or act as the coordinating agency. (3) "Director" means the individual or body of individuals in whom the ultimate legal authority of an agency is vested by any provision of law. If the agency head is a body of individuals, a majority of those individuals constitutes the director. (4) "Environmental laws" means chapters 43.21A, 70.94, 70.95, 70.105, 70.119A, 75.20, 90.48, 90.52, 90.58, 90.64, and 90.71 RCW, and RCW 90.54.020(3)(b) and rules adopted under those chapters and section. The term environmental laws as used in this chapter does not include any provision of the Revised Code of Washington, or of any municipal ordinance or enactment, that regulates the selection of a location for a new facility. (5) "Facility" means a site or activity that is regulated under any of the provisions of the environmental laws. (6) "Legal requirement" includes any provision of an environmental law, rule, order, or permit. (7) "Sponsor" means the owner or operator of a facility, including a municipal corporation, subject to regulation under the environmental laws of the state of Washington, or an authorized representative of the owner or operator, that submits a proposal for an environmental excellence program agreement. (8) "Stakeholder" means a person who has a direct interest in the proposed environmental excellence program agreement or who represents a public interest in the proposed environmental excellence program agreement. Stakeholders may include communities near the project, local or state governments, permittees, businesses, environmental and other public interest groups, employees or employee representatives, or other persons. NEW SECTION. Sec. 3. An environmental excellence program agreement entered into under this chapter must achieve more effective or efficient environmental results than the results that would be otherwise achieved. The basis for comparison shall be a reasonable estimate of the overall impact of the participating facility on the environment in the absence of an environmental excellence program agreement. More effective environmental results are results that are better overall than those that would be achieved under the legal requirements superseded or replaced by the agreement. More efficient environmental results are results that are achieved at reduced cost but do not decrease the overall environmental results achieved by the participating facility. An environmental excellence program agreement may not authorize either (1) the release of water pollutants that will cause to be exceeded, at points of compliance in the ambient environment established pursuant to law, numeric surface water or ground water quality criteria or numeric sediment quality criteria adopted as rules under chapter 90.48 RCW; or (2) the emission of any air contaminants that will cause to be exceeded any air quality standard as defined in RCW 70.94.030(3); or (3) a decrease in the overall environmental results achieved by the participating facility compared with results achieved over a representative period before the date on which the agreement is proposed by the sponsor. However, an environmental excellence program agreement may authorize reasonable increases in the release of pollutants to permit increases in facility production or facility expansion and modification. NEW SECTION. Sec. 4. (1) The director of a state, regional, or local agency may enter into an environmental excellence program agreement with any sponsor, even if one or more of the terms of the environmental excellence program agreement would be inconsistent with an otherwise applicable legal requirement. An environmental excellence program agreement must meet the requirements of section 3 of this act. Otherwise applicable legal requirements identified according to section 7(1) of this act shall be superseded and replaced in accordance with section 9 of this act. (2) The director of a state, regional, or local agency may enter into an environmental excellence program agreement only to the extent the state, regional, or local agency has jurisdiction to administer state environmental laws either directly or indirectly through the adoption of rules. (3) Where a sponsor proposes an environmental excellence program agreement that would affect legal requirements applicable to the covered facility that are administered by more than one state, regional, or local agency, the coordinating agency shall take the lead in developing the environmental excellence program agreement with the sponsor and other agencies administering legal requirements applicable to the covered facility and affected by the agreement. The environmental excellence program agreement does not become effective until the agreement is approved by the director of each agency administering legal requirements identified according to section 7(1) of this act. (4) No director may enter into an environmental excellence program agreement applicable to a remedial action conducted under the Washington model toxics control act, chapter 70.105D RCW, or the federal comprehensive environmental response, compensation and liability act (42 U.S.C. Sec. 9601 et seq). No action taken under this chapter shall be deemed a waiver of any applicable, relevant, or appropriate requirements for any remedial action conducted under the Washington model toxics control act or the federal comprehensive environmental response, compensation and liability act. (5) The directors of state, regional, or local agencies shall not enter into an environmental excellence program agreement or a modification of an environmental excellence program agreement containing terms affecting legal requirements adopted to comply with provisions of a federal regulatory program and to which the responsible federal agency objects after notice under the terms of section 8(4) of this act. (6) The directors of regional or local governments may not enter into an environmental excellence program agreement or a modification of an environmental excellence program agreement containing terms affecting legal requirements that are subject to review or appeal by a state agency, including but not limited to chapters 70.94, 70.95, and 90.58 RCW, and to which the responsible state agency objects after notice is given under the terms of section 8(4) of this act. NEW SECTION. Sec. 5. (1) A sponsor may propose an environmental excellence program agreement. A trade association or other authorized representative of a sponsor or sponsors may propose a programmatic environmental excellence program agreement for multiple facilities. (2) A sponsor must submit, at a minimum, the following information and other information that may be requested by the director or directors required to sign the agreement: (a) A statement that describes how the proposal is consistent with the purpose of this chapter and the project approval criteria in section 3 of this act; (b)(i) For a site-specific proposal, a comprehensive description of the proposed environmental excellence project that includes the nature of the facility and the operations that will be affected, how the facility or operations will achieve results more effectively or efficiently, and the nature of the results anticipated; or (ii) For a programmatic proposal, a comprehensive description of the proposed environmental excellence project that identifies the facilities and the operations that are expected to participate, how participating facilities or operations will achieve environmental results more effectively or efficiently, the nature of the results anticipated, and the method to identify and document the commitments made by individual participants; (c) An environmental checklist, containing sufficient information to reasonably inform the public of the nature of the proposed environmental excellence program agreement and describing probable significant adverse environmental impacts and environmental benefits expected from implementation of the proposal; (d) A draft environmental excellence program agreement; (e) A description of the stakeholder process as provided in section 6 of this act; (f) A preliminary identification of the permit amendments or modifications that may be necessary to implement the proposed environmental excellence program agreement. NEW SECTION. Sec. 6. (1) Stakeholder participation in and support for an environmental excellence program agreement is vital to the integrity of the environmental excellence program agreement and helps to inform the decision whether an environmental excellence program agreement can be approved. (2) A proposal for an environmental excellence program agreement shall include the sponsor's plan to identify and contact stakeholders, to advise stakeholders of the facts and nature of the project, and to request stakeholder participation and review. Stakeholder participation and review shall occur during the development, consideration, and implementation stages of the proposed environmental excellence program agreement. The plan shall include notice to the employees of the facility to be covered by the proposed environmental excellence program agreement and public notice in the area of the covered facility. (3) The coordinating agency shall extend an invitation to participate in the development of the proposal to a broad and representative sector of the public likely to be affected by the environmental excellence program agreement, including representatives of local community, labor, environmental, and neighborhood advocacy groups. The coordinating agency shall select participants to be included in the stakeholder process that are representative of the diverse sectors of the public that are interested in the agreement. The stakeholder process shall include the opportunity for discussion and comment at multiple stages of the process and access to the information relied upon by the directors in approving the agreement. (4) The coordinating agency will identify any additional provisions for the stakeholder process that the director of the coordinating agency, in the director's sole discretion, considers appropriate to the success of the stakeholder process, and provide for notice to the United States environmental protection agency or other responsible federal agency of each proposed environmental excellence program agreement that may affect legal requirements of any program administered by that agency. NEW SECTION. Sec. 7. An environmental excellence program agreement must contain the following terms and conditions: (1) An identification of all legal requirements that are superseded or replaced by the environmental excellence program agreement; (2) A description of all legal requirements that are enforceable as provided in section 13(1) of this act that are different from those legal requirements applicable in the absence of the environmental excellence program agreement; (3) A description of the voluntary goals that are or will be pursued by the sponsor; (4) A statement describing how the environmental excellence program agreement will achieve the purposes of this chapter; (5) A statement describing how the environmental excellence program agreement will be implemented, including a list of steps and an implementation schedule; (6) A statement that the proposed environmental excellence program agreement will not increase overall worker safety risks or cause an unjust or disproportionate and inequitable distribution of environmental risks among diverse economic and cultural communities; (7) A summary of the stakeholder process that was followed in the development of the environmental excellence program agreement; (8) A statement describing how any participating facility shall measure and demonstrate its compliance with the environmental excellence program agreement including, without limitation, a description of the methods to be used to monitor performance, criteria that represent acceptable performance, and the method of reporting performance to the public and local communities. The facility's compliance with the agreement must be independently verifiable; (9) A description of and plan for public participation in the implementation of the environmental excellence program agreement and for public access to information needed to assess the benefits of the environmental excellence program agreement and the sponsor's compliance with the environmental excellence program agreement; (10) A schedule of periodic performance review of the environmental excellence program agreement by the directors that signed the agreement; (11) Provisions for voluntary and involuntary termination of the agreement; (12) The duration of the environmental excellence program agreement and provisions for renewal; (13) Statements approving the environmental excellence program agreement made by the sponsor and by or on behalf of directors of each state, regional, or local agency administering legal requirements that are identified according to section 7(1) of this act; (14) Additional terms as requested by the directors signing the environmental excellence program agreement and consistent with this chapter; (15) Draft permits or permit modifications as needed to implement the environmental excellence program agreement; (16) With respect to a programmatic environmental excellence program agreement, a statement of the method with which to identify and document the specific commitments to be made by individual participants. NEW SECTION. Sec. 8. (1) The coordinating agency shall provide at least thirty days after notice has been published in a newspaper under subsection (2) of this section for public comment on a proposal to enter into or modify an environmental excellence program agreement. The coordinating agency may provide for an additional period of public comment if required by the complexity of the proposed environmental excellence program agreement and the degree of public interest. Before the start of the comment period, the coordinating agency shall prepare a proposed agreement, a public notice and a fact sheet. The fact sheet shall: (a) Briefly describe the principal facts and the significant factual, legal, methodological and policy questions considered by the directors signing the agreement, and the directors' proposed decisions; and (b) briefly describe how the proposed action meets the requirements of section 3 of this act. (2) The coordinating agency shall publish notice of the proposed agreement in the Washington State Register and in a newspaper of general circulation in the vicinity of the facility or facilities covered by the proposed environmental excellence program agreement. The notice shall generally describe the agreement or modification; the facilities to be covered; summarize the changes in legal requirements that will result from the agreement; summarize the reasons for approving the agreement or modifications; identify an agency person to contact for additional information; state that the proposed agreement or modification and fact sheet are available on request; and state that comments may be submitted to the agency during the comment period. The coordinating agency shall order a public informational meeting or a public hearing to receive oral comments if the written comments during the comment period demonstrate considerable public interest in the proposed agreement. (3) The coordinating agency shall prepare and make available a responsiveness summary indicating the agencies' actions taken in response to comments and the reasons for those actions. (4) With respect to an environmental excellence program agreement that affects legal requirements adopted to comply with provisions of a federal regulatory program, the coordinating agency shall provide a copy of the environmental excellence program agreement, and a copy of the notice required by subsection (1) of this section, to the federal agency that is responsible for administering that program at least thirty days before entering into or modifying the environmental excellence program agreement, and shall afford the federal agency the opportunity to object to those terms of the environmental excellence program agreement or modification of an environmental excellence program agreement affecting the legal requirements. The coordinating agency shall provide similar notice to state agencies that have statutory review or appeal responsibilities regarding provisions of the environmental excellence program agreement. NEW SECTION. Sec. 9. (1) Notwithstanding any other provision of law, any legal requirement identified under section 7(1) of this act shall be superseded or replaced in accordance with the terms of the environmental excellence program agreement. Legal requirements contained in a permit that are affected by an environmental excellence program agreement will continue to be enforceable until such time as the permit is revised in accordance with subsection (2) of this section. With respect to any other legal requirements, the legal requirements contained in the environmental excellence program agreement are effective as provided by the environmental excellence program agreement, and the facility or facilities covered by an environmental excellence program agreement shall comply with the terms of the environmental excellence program agreement in lieu of the legal requirements that are superseded and replaced by the approved environmental excellence program agreement. (2) Any permits affected by an environmental excellence program agreement shall be revised to conform to the environmental excellence program agreement by the agency with jurisdiction. The permit revisions will be completed within one hundred twenty days of the effective date of the agreement in accordance with otherwise applicable procedural requirements, including, where applicable, public notice and the opportunity for comment, and the opportunity for review and objection by federal agencies. (3) Other than as superseded or replaced as provided in an approved environmental excellence program agreement, any existing permit requirements remain in effect and are enforceable. (4) A programmatic environmental excellence program agreement shall become applicable to an individual facility when all directors entering into the programmatic agreement approve the owner or operator's commitment to comply with the agreement. A programmatic agreement may not take effect, however, until notice and an opportunity to comment for the individual facility has been provided in accordance with the requirements of section 8 (1) through (3) of this act. NEW SECTION. Sec. 10. (1) A decision by the directors of state, regional, or local agencies to approve a proposed environmental excellence program agreement, or to terminate or modify an approved environmental excellence program agreement, is subject to judicial review in superior court. For purposes of judicial review, the court may grant relief from the decision to approve or modify an environmental excellence program agreement only if it determines that the action: (a) Violates constitutional provisions; (b) exceeds the statutory authority of the agency; (c) was arbitrary and capricious; or (d) was taken without compliance with the procedures provided by this chapter. However, the decision of the director or directors shall be accorded substantial deference by the court. A decision not to enter into or modify an environmental excellence program agreement and a decision not to accept a commitment under section 9(4) of this act to comply with the terms of a programmatic environmental excellence agreement are within the sole discretion of the directors of the state, regional, or local agencies and are not subject to review. (2) An appeal from a decision to approve or modify a facility specific or a programmatic environmental excellence program agreement is not timely unless filed with the superior court and served on the parties to the environmental excellence program agreement within thirty days of the date on which the agreement or modification is signed by the director. For an environmental excellence program agreement or modification signed by more than one director, there is only one appeal, and the time for appeal shall run from the last date on which the agreement or modification is signed by a director. (3) A decision to accept the commitment of a specific facility to comply with the terms of a programmatic environmental excellence program agreement, or to modify the application of an agreement to a specific facility, is subject to judicial review as described in subsection (1) of this section. An appeal is not timely unless filed with the superior court and served on the directors signing the agreement, the sponsor, and the owner or operator of the specific facility within thirty days of the date the director or directors that signed the programmatic agreement approve the owner or operator's commitment to comply with the agreement. For a programmatic environmental excellence program agreement or modification signed by more than one director, there shall be only one appeal and the time for appeal shall run from the last date on which a director approves the commitment. (4) The issuance of permits and permit modifications is subject to review under otherwise applicable law. (5) An appeal of a decision by a director under section 11 of this act to terminate in whole or in part a facility specific or programmatic environmental excellence program agreement is not timely unless filed with the superior court and served on the director within thirty days of the date on which notice of the termination is issued under section 11(2) of this act. NEW SECTION. Sec. 11. (1) In addition to any termination provisions contained in an environmental excellence program agreement, a director of an agency may terminate an environmental excellence program agreement in whole or in part with respect to a legal requirement administered by that agency, if the director finds: (a) That after notice and a reasonable opportunity to cure, the covered facility is in violation of a material requirement of the agreement; (b) that the facility has repeatedly violated any requirements of the agreement; (c) that the operation of the facility under the agreement has caused endangerment to public health or the environment that cannot be remedied by modification of the agreement; or (d) the facility has failed to make substantial progress in achieving the voluntary goals identified under section 6(4) of this act, and these goals are material to the overall objectives of the agreement. (2) A director of an agency terminating an environmental excellence program agreement in any respect shall provide each of the parties to the agreement with a written notice of that action specifying the extent to which the environmental excellence program agreement is to be terminated, the factual and legal basis for termination, and a description of the opportunity for judicial review of the decision to terminate the environmental excellence program agreement. (3) If a director terminates less than the entire environmental excellence program agreement, the owner or operator of the covered facility may elect to terminate the entire agreement as it applies to the facility. (4) If a director decides to terminate an environmental excellence program agreement because the facility has not been able to meet the legal requirements established under the agreement, or because operation of the facility under the agreement has caused endangerment to public health or the environment, as provided in subsection (1)(c) of this section, the director may establish in the notice of termination: (a) Practical interim requirements for the facility that are no less stringent than the legal requirements that would apply to the facility in the absence of the agreement; and (b) a practical schedule of compliance for meeting the interim requirements. The interim requirements and schedule of compliance shall be subject to judicial review under the provisions of section 10(5) of this act. The facility shall comply with the interim requirements established under this subsection after they are final and no longer subject to judicial review until applicable permits or permit modifications have been issued under section 12 of this act. NEW SECTION. Sec. 12. After a termination under section 11 of this act is final and no longer subject to judicial review, the sponsor has sixty days in which to apply for any permit or approval affected by any terminated portion of the environmental excellence program agreement. An application filed during the sixty-day period shall be deemed a timely application for renewal of a permit under the terms of any applicable law. Except as provided in section 11(4) of this act, the terms and conditions of the environmental excellence program agreement and of permits issued will continue in effect until a final permit or approval is issued. If the sponsor fails to submit a timely or complete application, any affected permit or approval may be modified at any time that is consistent with applicable law. NEW SECTION. Sec. 13. (1) The legal requirements contained in the environmental excellence program agreement in accordance with section 7(2) of this act are enforceable commitments of the facility covered by the agreement. Any violation of these legal requirements is subject to penalties and remedies to the same extent as the legal requirements that they superseded or replaced. (2) The voluntary goals stated in the environmental excellence program agreement in accordance with section 7(3) of this act are voluntary commitments of the facility covered by the agreement. If the facility fails to meet these goals, it shall not be subject to any form of enforcement action, including penalties, orders, or any form of injunctive relief. The failure to make substantial progress in meeting these goals may be a basis on which to terminate the environmental excellence program agreement under section 11 of this act. (3) Nothing in this chapter limits the authority of an agency, the attorney general, or a prosecuting attorney to initiate an enforcement action for violation of any applicable legal requirement. However, no civil, criminal, or administrative action may be brought with respect to any legal requirement that is superseded or replaced under the terms of an environmental excellence program agreement. (4) This chapter does not create any new authority for citizen suits, and does not alter or amend other statutory provisions authorizing citizen suits. NEW SECTION. Sec. 14. An environmental excellence program agreement may contain a reduced fee schedule with respect to a program applicable to the covered facility or facilities. NEW SECTION. Sec. 15. A decision to approve an environmental excellence program agreement is not subject to the requirements of the state environmental policy act, chapter 43.21C RCW, including the requirement to prepare an environmental impact statement under RCW 43.21C.031. However, the consideration of a proposed environmental excellence program agreement will integrate an assessment of environmental impacts. NEW SECTION. Sec. 16. Any state, regional, or local agency administering programs under an environmental law may adopt rules or ordinances to implement this chapter. However, it is not necessary that an agency adopt rules or ordinances in order to consider or enter into environmental excellence program agreements. NEW SECTION. Sec. 17. The director of the department of ecology shall appoint an advisory committee to review the effectiveness of the environmental excellence program agreement program and to make a recommendation to the legislature concerning the continuation, termination, or modification of the program. The committee also may make recommendations it considers appropriate for revision of any regulatory program that is affected by an environmental excellence program agreement. The committee shall be composed of one representative each from two state agencies, two representatives of the regulated community, and two representatives of environmental organizations or other public interest groups. The committee must submit a report and its recommendation to the legislature not later than October 31, 2001. The department of ecology shall provide the advisory committee with such support as they may require. NEW SECTION. Sec. 18. (1) Agencies authorized to enter into environmental excellence program agreements may assess and collect a fee to recover the costs of processing environmental excellence program agreement proposals. The amount of the fee may not exceed the direct and indirect costs of processing the environmental excellence program agreement proposal. Processing includes, but is not limited to: Working with the sponsor to develop the agreement, meeting with stakeholder groups, conducting public meetings and hearings, preparing a record of the decision to enter into or modify an agreement, and defending any appeal from a decision to enter into or modify an agreement. Fees also may include, to the extent specified by the agreement, the agencies' direct costs of monitoring compliance with those specific terms of an agreement not covered by permits issued to the participating facility. (2) Agencies assessing fees may graduate the initial fees for processing an environmental excellence program agreement proposal to account for the size of the sponsor and to make the environmental excellence program agreement program more available to small businesses. An agency may exercise its discretion to waive all or any part of the fees. (3) Sponsors may voluntarily contribute funds to the administration of an agency's environmental excellence program agreement program. NEW SECTION. Sec. 19. The authority of a director to enter into a new environmental excellence program agreement program shall be terminated June 30, 2002. Environmental excellence program agreements entered into before June 30, 2002, shall remain in force and effect subject to the provisions of this chapter. NEW SECTION. Sec. 20. A new section is added to chapter 43.21A RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 21. A new section is added to chapter 70.94 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 22. A new section is added to chapter 70.95 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 23. A new section is added to chapter 70.105 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 24. A new section is added to chapter 70.119A RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 25. A new section is added to chapter 75.20 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 26. A new section is added to chapter 90.48 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 27. A new section is added to chapter 90.52 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 28. A new section is added to chapter 90.58 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 29. A new section is added to chapter 90.64 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 30. A new section is added to chapter 90.71 RCW to read as follows: Notwithstanding any other provision of law, any legal requirement under this chapter, including any standard, limitation, rule, or order is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). Sec. 31. RCW 90.54.020 and 1989 c 348 s 1 are each amended to read as follows: Utilization and management of the waters of the state shall be guided by the following general declaration of fundamentals: (1) Uses of water for domestic, stock watering, industrial, commercial, agricultural, irrigation, hydroelectric power production, mining, fish and wildlife maintenance and enhancement, recreational, and thermal power production purposes, and preservation of environmental and aesthetic values, and all other uses compatible with the enjoyment of the public waters of the state, are declared to be beneficial. (2) Allocation of waters among potential uses and users shall be based generally on the securing of the maximum net benefits for the people of the state. Maximum net benefits shall constitute total benefits less costs including opportunities lost.

(3) The quality of the natural environment shall be protected and, where possible, enhanced as follows: (a) Perennial rivers and streams of the state shall be retained with base flows necessary to provide for preservation of wildlife, fish, scenic, aesthetic and other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served. (b) Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served. Technology-based effluent limitations or standards for discharges for municipal water treatment plants located on the Chehalis, Columbia, Cowlitz, Lewis, or Skagit river shall be adjusted to reflect credit for substances removed from the plant intake water if: (i) The municipality demonstrates that the intake water is drawn from the same body of water into which the discharge is made; and (ii) The municipality demonstrates that no violation of receiving water quality standards or appreciable environmental degradation will result. (4) Adequate and safe supplies of water shall be preserved and protected in potable condition to satisfy human domestic needs. (5) Multiple-purpose impoundment structures are to be preferred over single-purpose structures. Due regard shall be given to means and methods for protection of fishery resources in the planning for and construction of water impoundment structures and other artificial obstructions. (6) Federal, state, and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out practices of conservation as they relate to the use of the waters of the state. In addition to traditional development approaches, improved water use efficiency and conservation shall be emphasized in the management of the state's water resources and in some cases will be a potential new source of water with which to meet future needs throughout the state. (7) Development of water supply systems, whether publicly or privately owned, which provide water to the public generally in regional areas within the state shall be encouraged. Development of water supply systems for multiple domestic use which will not serve the public generally shall be discouraged where water supplies are available from water systems serving the public. (8) Full recognition shall be given in the administration of water allocation and use programs to the natural interrelationships of surface and ground waters. (9) Expressions of the public interest will be sought at all stages of water planning and allocation discussions. (10) Water management programs, including but not limited to, water quality, flood control, drainage, erosion control and storm runoff are deemed to be in the public interest. (11) Notwithstanding any other provision of law, any legal requirement under subsection (3)(b) of this section is superseded and replaced in accordance with the terms and provisions of an environmental excellence program agreement, entered into under chapter 43.-- RCW (sections 2 through 19 of this act). NEW SECTION. Sec. 32. The environmental excellence account is hereby created in the state treasury. All fees and voluntary contributions collected by state agencies under section 18 of this act shall be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for purposes consistent with the environmental excellence program created under sections 2 through 19 of this act. Moneys in the account may be appropriated to each agency in an amount equal to the amount each agency collects and deposits into the account. NEW SECTION. Sec. 33. Sections 2 through 19 of this act constitute a new chapter in Title 43 RCW." Senator Fairley moved that the following amendments by Senators Fairley and Fraser to the striking amendment by Senator Morton be considered simultaneously and be adopted:

On page 2, line 6, delete "75.20," On page 2, line 6, delete "90.58," On page 4, line 23, delete ", 70.95, and 90.58" and insert "and 70.95"

On page 15, beginning on line 31, delete all of section 25 On page 16, beginning on line 18, delete all of section 28 Renumber sections consecutively and correct internal references accordingly. On page 19, line 27, delete "adding a new section to chapter 75.20 RCW;" On page 19, line 29, delete "adding a new section to chapter 90.58 RCW;" Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senators Fairley and Fraser on page 2, lines 6 (2); page 4, line 23; page 15, beginning on line 31; page 16, beginning on line 18; and page 19, lines 27 and 29; to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Fairley failed and the amendments to the striking amendment were not adopted.

MOTION

Senator Fairley moved that the following amendment by Senators Fairley, Fraser and Thibaudeau to the striking amendment by Senator Morton be adopted:

On page 2, after line 27 delete all of section 3 and insert the following: "NEW SECTION. Sec. 3. (1) An environmental excellence program agreement will achieve better results than would otherwise be required by existing law or reasonably anticipated future requirements. Agreements will allow for exemptions from existing law only in so far as those exemptions are necessary to achieve better results. (2) Under no circumstances shall an environmental excellence program agreement result in increased risk to human health or the environment. Moreover, no agreement shall exceed any adopted numeric standard designed to protect human health or the environment." Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

Senator Fairley demanded a roll call and the demand was sustained.

The President declared the question before the Senate to be the roll call on the adoption of the amendment by Senators Fairley, Fraser and Thibaudeau on page 2, after line 27, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

ROLL CALL

The Secretary called the roll and the amendment to the striking amendment was not adopted by the following vote: Yeas, 24; Nays, 25; Absent, 0; Excused, 0.

Voting yea: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Hargrove, Haugen, Heavey, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Rasmussen, Sheldon, Snyder, Spanel, Swanson, Thibaudeau, Winsley and Wojahn - 24. Voting nay: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Wood and Zarelli - 25.

POINT OF ORDER

Senator Johnson: “Mr. President, I rise to a point of order. We have now reached the time for the Special Order of Business on Second

Substitute House Bill No. 2054.”

There being no objection, the President deferred further consideration of Engrossed Second Substitute House Bill No. 1866.

STATEMENT FOR THE JOURNAL

I missed voting on Second Substitute House Bill No. 2054 because of a family emergency. As the record now stands, the roll call shows that I was excused. I would like to go on record that had I been able to be in session at the time the vote was taken, I would have voted 'no' on this bill.

SENATOR LISA BROWN, Third District

SECOND READING

SECOND SUBSTITUTE HOUSE BILL NO. 2054, by House Committee on Appropriations (originally sponsored by Representatives Chandler, Clements, Mastin and Honeyford)

Authorizing local watershed planning and modifying water resource management.

The bill was read the second time.

POINT OF ORDER

Senator Kline: “Mr. President, I raise an objection to the scope and object of Second Substitute House Bill No. 2054.”

REPLY BY THE PRESIDENT

President Owen: “Senator Kline, you are raising your objection to the scope and object--do you mean of the amendment to the bill?”

Senator Kline: “Yes, to the amendment--the striker.”

President Owen: “To the committee amendment?”

Senator Kline: “Right.”

President Owen: “You may want to hold your scope request in abeyance for a moment, because I believe a motion is going to be made to not adopt the committee amendment.”

MOTION

On motion of Senator Morton, the following Committee on Ways and Means amendment was not adopted:

NEW SECTION. Sec. 107. (1) This chapter shall not be construed as creating a new cause of action against the state or any county, city, town, water supply utility, conservation district, or planning unit.

(2) Notwithstanding RCW 4.92.090, 4.96.010, and 64.40.020, no claim for damages may be filed against the state or any county, city, town, water supply utility, Indian tribes, conservation district, or planning unit that or member of a planning unit who participates in a WRIA planning unit for performing responsibilities under this chapter. The exclusion from liability contained in this subsection does not apply to a county, city, town, or water supply utility that votes to adopt provisions in a WRIA plan that have been identified by the department as being in conflict with state or federal law with regard to those provisions if advice regarding the conflict was provided under section 113(2) of this act.

NEW SECTION. Sec. 108. Except as provided in section 109 of this act for multi-WRIA planning, the county with the largest area within the boundaries of a WRIA may choose to initiate water resource planning for the WRIA under this chapter. If it does so choose, it shall make application to the department of ecology to declare its intent to conduct watershed planning. Upon making application to the department, the county with the largest area within the WRIA shall convene a meeting of the members of the legislative authorities of the counties with territory within a WRIA for the appointment of a WRIA planning unit. The county shall also notify the cities, water supply utilities, and conservation districts with territory within the WRIA that these groups are to meet to appoint their members of the WRIA planning unit. For the purposes of this section and sections 109 and 113 of this act, a county is considered to have territory within a WRIA only if the territory of the county located in the WRIA constitutes at least fifteen percent of the area of the WRIA. For conducting planning under this chapter, the county with the largest area within the boundaries of the WRIA is the lead agency for the WRIA planning, except as provided in section 109 of this act for multi-WRIA planning. By a majority vote of the county legislative authorities within the WRIA, an alternative lead agency may be selected.

(2)(a) One WRIA planning unit shall be appointed for the WRIA as provided by this section or for a multi-WRIA area as provided by section 109 of this act for multi-WRIA planning. The planning unit shall be composed of: One member from each county with territory in the WRIA representing the county and appointed by the county; one member for each county with territory in the WRIA, but not less than two members, representing cities with territory in the WRIA and appointed jointly by those cities and incorporated towns; two members representing all water supply utilities with territory within the WRIA and appointed jointly by those districts; one member representing all conservation districts with territory within the WRIA and appointed jointly by those districts; and nine members representing various special interest groups appointed jointly by the counties with territory within the WRIA. If one or more federal Indian reservations are located in whole or in part within the boundaries of the WRIA, the planning unit shall include one member representing each reservation with territory in the WRIA, appointed by the tribes. Two members shall be appointed by the governor to represent state agencies. (b) In addition, for a WRIA located within Pierce, King, or Snohomish county, a representative of the water supply utility that is the largest water purveyor using water from the WRIA shall be an ex officio member of the planning unit whether the principal offices of the purveyor are or are not located within the WRIA. (3) Except for a person who is an ex officio member of the planning unit under subsection (2)(b) of this section, each person appointed to a WRIA planning unit shall have been a resident and a property owner of the WRIA for at least five years. State employees or state officials may be appointed to the planning unit as ex officio, nonvoting members. In appointing persons to the WRIA planning unit representing special interest groups, the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the WRIA. (4)(a) In voting to appoint the members of a WRIA planning unit, to select a lead agency for water resource planning under section 109 of this act, to approve a WRIA plan under section 113 of this act, or to request or concur with a request for multi-WRIA planning under section 109 of this act, each county with territory within the WRIA shall have three votes, divided equally among the members of the county's legislative authority and these actions shall be made by majority vote based on the votes allocated under this section. In voting to appoint members of a WRIA planning unit: Each city with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such cities; each water supply utility with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts; and each conservation district with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts. All appointments shall be made within sixty days of the date the appointing authorities other than the counties are notified to convene to make appointments or the appointments shall be made by the counties with territory in the WRIA in the same manner the counties make other appointments. (b) In selecting the membership of the planning unit in accordance with this subsection (4), the local governments may choose by majority vote to modify the membership of the planning unit. If the local governments choose to modify the membership, such changes shall be agreed to in accordance with subsection (a) of this subsection within thirty days of the filing of an application to plan with the department of ecology. If a modified planning unit composition cannot be agreed to within thirty days of the filing of an application, the membership shall be as provided in subsection (2)(a) of this section. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership.

NEW SECTION. Sec. 109. (1) The counties with territory in a WRIA may elect to conduct multi-WRIA planning with the counties with territory in one or more other WRIAs. If the counties with territory in these other WRIAs concur, all of the counties with territory in these WRIAs shall convene and shall appoint one planning unit to conduct the water resource planning for the multi-WRIA area.

(a) The planning unit shall be composed of: Up to one member, as that number is determined by the counties jointly, for each county with territory in the multi-WRIA area representing the counties and appointed by the counties jointly; up to one member, as that number is determined by the cities jointly, for each county with territory in the multi-WRIA area, representing cities with territory in the multi-WRIA area and appointed jointly by those cities; up to three members, as that number is determined by the districts, representing all water supply utilities with territory within the multi-WRIA area and appointed jointly by those districts; up to two members, as that number is determined by the districts, representing all conservation districts with territory within the multi-WRIA area and appointed jointly by those districts; four members representing the general citizenry, of which at least two shall be holders of water rights, appointed jointly by the counties with territory within the multi-WRIA area; and six members representing various special interest groups appointed jointly by the counties with territory within the multi-WRIA area. If one or more federal Indian reservations are located in whole or in part within the boundaries of the multi-WRIA area, the planning unit shall include one member representing each reservation with territory in the multi-WRIA area, appointed by the tribes. Two members shall be appointed by the governor to represent state agencies. (b) In addition, for a WRIA located within Pierce, King, or Snohomish county, a representative of the largest water purveyor using water from the multi-WRIA area shall be an ex officio member of the planning unit whether the principal offices of the purveyor are or are not located within the multi-WRIA area. (c) Except for a person who is an ex officio member of the planning unit under subsection (1)(b) of this section, each person appointed to a multi-WRIA planning unit shall have been a resident and property owner within the multi-WRIA area for at least five years. State employees or state officials may be appointed to the planning unit as ex officio, nonvoting members. In appointing persons to the multi-WRIA planning unit representing special interest groups the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the multi-WRIA area. (2)(a) The counties in the multi-WRIA area shall select, by a majority vote, a governmental entity in the multi-WRIA area to act as lead agency for water resource planning in the multi-WRIA area under this chapter. Such an entity shall serve as the lead agency if it agrees in writing to do so. All appointments shall be made within sixty days of the date the lead agency in the multi-WRIA area notifies the other appointing authorities to convene to make appointments or the appointments shall be made by the counties with territory in the multi-WRIA area in the same manner the counties make other appointments. (b) In selecting the membership of the planning unit in accordance with this subsection (2), the local governments may choose by majority vote to modify the membership of the planning unit. If the local governments choose to modify the membership, such changes shall be agreed to within thirty days of the filing of an application to plan with the department of ecology. If a modified planning unit composition cannot be agreed to within thirty days of the filing of an application, the membership shall be as provided in subsection (1)(a) of this section. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership. (3) A planning unit for a multi-WRIA area shall perform all of the functions assigned by this chapter to a WRIA planning unit and is subject to all of the provisions of this chapter that apply to a WRIA planning unit.

NEW SECTION. Sec. 110. The lead agency shall provide staff support for the work of the WRIA planning unit. Each WRIA planning unit may establish its own methods of operation that are consistent with this chapter and may establish methods for reviewing the operations of its lead agency. No planning unit appointed or selected under this chapter may possess or exercise the power of eminent domain. No planning unit appointed or selected under this chapter may take any action that affects in any manner a general adjudication proceeding for water rights, completed or ongoing. Each WRIA planning unit is encouraged to: Consider information and plans that may have been previously developed by other entities in establishing water resource management plans for the WRIA; consider existing data regarding water resources in the WRIA; and, for a WRIA that borders another state, cooperate with local government counterparts in the adjacent state regarding water resource planning. Water resource plans developed under this chapter for a WRIA may not interfere in any manner with a general adjudication of water rights, completed or ongoing. Such a WRIA plan may not in any manner impair, diminish, or interfere with a water right that exists before the adoption of the plan by the department under section 113 of this act.

All meetings of a WRIA planning unit shall be conducted as public meetings as required for such meetings by the open public meetings act, chapter 42.30 RCW. Some time shall be set aside at the end of each meeting of a WRIA planning unit for public comments. Each planning unit shall establish procedures to be followed by the unit in making decisions. The objective to be sought by the planning unit in making decisions is to reach consensus among its members on the decisions. Decisions by majority vote will be used only after the unit has found that attempts at achieving consensus have not been successful. No person who is a member of a WRIA planning unit may designate another to act on behalf of the person as a member or to attend as a member a meeting of the unit on behalf of the person. If a member of a WRIA planning unit is absent from more than five meetings of the WRIA planning unit that constitute twenty percent or more of the meetings that have been conducted by the planning unit while the person is a member of the unit and these absences have not been excused as provided by this section, the member's position on the WRIA planning unit is to be considered vacant. A person's absence from a meeting may be excused: By the chair of the planning unit if a written request to do so is received by the chair before the meeting from which the member is to be absent; or by a majority vote of the members of the planning unit at the meeting during which the member is absent.

NEW SECTION. Sec. 111. (1) Each WRIA planning unit shall develop a water resource plan. The plan must contain the elements listed in subsection (2) of this section and may include other elements added by the planning unit. Once organized, the first task of the planning unit is to prioritize these elements regarding their importance in the WRIA and in developing a water resource plan for the WRIA. A plan shall not be developed such that its provisions are in conflict with state or federal law or impair, diminish, or interfere in any manner with a water right existing prior to its adoption or with the construction, operation, or maintenance of a federal reclamation project. Each plan shall acknowledge that the water rights of citizens are private rights to real property.

(2) The plan must include the following: (a) An assessment of water supply and use in the WRIA, including: (i) A quantitative estimation of the amount of surface and ground water present in the planning unit, using United States geological survey information and other existing sources of information; (ii) A quantitative estimation using existing sources of information, of the amount of precipitation and surface and ground water available, using currently available or likely available technologies, collectively for both current and future water uses, including for instream purposes and for withdrawal or diversion; (iii) A quantitative estimation using existing sources of information, of the amount of surface and ground water actually being used, and the months of peak and minimum use, both in-stream and by withdrawal, for agricultural, industrial, fisheries, recreational, environmental, municipal, and residential purposes, and including amounts claimed, permitted, or certificated for future municipal needs; and (iv) A quantitative estimation of the amount of water, approximately, that is represented by amounts in claims in the water rights claims registry, in water use permits, in certificated rights, and in rules establishing instream flows; (b) A quantitative description of future water-based instream and out-of-stream needs in the planning unit, based on projected population and agricultural and other economic growth. That is, an identification of the water needed collectively for use for agricultural, fisheries, recreational, environmental, industrial, municipal, and residential purposes. If a federal reclamation project is providing water for reclamation purposes within the WRIA or multi-WRIA area, federal reclamation water use requirements shall be those for project lands within the WRIA or multi-WRIA area; (c) Instream flows. (i) Except for the main stem of the Columbia river or the main stem of the Snake river, a planning unit may propose instream flow levels as part of its plan for other rivers and streams in its WRIA or multi-WRIA area. (ii) The planning unit may propose adjustments to instream flow levels that have been set by the state before the adoption of the planning unit's plan and will propose instream flow levels as part of the plan for the other rivers, streams, and lakes for which it determines the establishment of flows or levels to be appropriate in the WRIA, or in the multi-WRIA area for multi-WRIA planning under section 109 of this act, and for which flows have not been previously set. An instream flow or base flow or level set for a body of water in a WRIA plan adopted by the department under section 113 of this act supersedes any other such flow or level previously established for the body of water; (d) A quantitative description of the ground water and of the surface water available for further appropriation including water that may be obtained through reuse. As used in this subsection (2)(d), "available" means available on the date the plan takes effect as a rule under section 113 of this act; (e) An identification of known areas that provide for the recharge of aquifers from the surface and areas where aquifers recharge surface bodies of water; (f) Strategies for increasing water supplies in the WRIA, including: (i) Water conservation measures; and (ii) Storage enhancements, including modifications to existing reservoirs, new reservoirs, and underground storage. Any quantity of water made available under these strategies is a quantity that is in addition to the water declared available for appropriation under (d) of this subsection; and (g) An identification of areas where voluntary water-related habitat improvement projects or voluntary transactions providing for the purchase of water-related habitat or water-related habitat easements would provide the greatest benefit to habitat in the WRIA, and a prioritization of the areas based on their potential for providing such benefits. The purpose of this element of the plan is to provide a means of coordinating nonregulatory, voluntary efforts for improving water-related habitat in the WRIA. No aspect of the plan may establish standards for water quality or regulate water quality in any manner whatsoever. (3) The department shall assist the planning unit in drafting proposed implementing rules for the elements of the plan over which the department has authority. The draft rules shall accompany the plan as it is reviewed under the provisions of this chapter. (4) A plan shall not be developed under this chapter to require directly or indirectly the implementation of laws, rules, or programs that are designed primarily to control water pollution or discharges of pollutants to water, to regulate effluent discharges or wastewater treatment systems or facilities, or to establish or require the achievement of water quality standards, including but not limited to chapter 90.48 RCW and rules adopted under chapter 90.48 RCW, the national pollutant discharge elimination system permit program, and the state waste discharge permit program.

NEW SECTION. Sec. 112. (1) Water resource management plans developed pursuant to the process in this chapter and subsequently adopted by the department under section 113 of this act are presumed valid. This presumption shall apply in any petition or action filed against a plan.

(2) All actions and decisions of the department regarding water resources in the WRIA shall be consistent with and based upon such an adopted plan for the WRIA.

NEW SECTION. Sec. 113. (1) Upon completing a proposed water resource plan for the WRIA, the WRIA planning unit shall publish notice of and conduct at least one public hearing in the WRIA on the proposed plan. The planning unit shall take care to provide notice of the hearing throughout the WRIA or multi-WRIA area. As a minimum, it shall publish a notice of the hearing in one or more newspapers of general circulation in the WRIA or multi-WRIA area. After considering the public comments presented at the hearing or hearings, the planning unit shall submit a copy of its proposed plan to the department. A proposed plan may be submitted to the department only if the unit has provided interim approval of the plan for this purpose by a majority vote of the members of the planning unit.

(2) The department shall conduct at least one public hearing, announced in accordance with chapter 34.05 RCW, on each proposed WRIA water resource plan submitted under this section. The department shall provide advice as to any specific subsections or sections of the plan that the department believes to be in conflict with state or federal law and may provide other recommendations regarding the plan. The department shall transmit its advice and recommendations regarding the plan to the WRIA planning unit within sixty days of receiving it for review. (3) The WRIA planning unit shall vote on each recommendation provided by the department and on the department's advice regarding any subsections or sections of the proposed WRIA plan the department believed to be in conflict with state or federal law. The planning unit may adopt such a recommendation or provide changes to respond to the advice of the department by a majority vote of the members of the planning unit. The WRIA planning unit shall approve a water resource plan for the WRIA by a two-thirds majority vote of the members of the planning unit. An approved plan shall be submitted to the counties with territory within the WRIA for adoption. If a WRIA planning unit receives funding for WRIA or multi-WRIA planning under section 106 of this act and does not approve a plan for submission to the counties within four years of the date the planning unit receives the first of that funding from the department for the planning, the department shall develop and adopt a water resource plan for the WRIA or multi-WRIA area. (4) Upon receipt of the completed plan by the county, the county shall submit for review a copy of the plan to the tribal council of each reservation with territory within the WRIA. The tribal council may review and provide comments and recommendations to the county within thirty days of the receipt of the plan. Public hearings required under subsection (5) of this section may not commence before the thirty-day period provided in this subsection for comments from tribal councils. (5) The legislative authority of each of the counties with territory within the WRIA shall provide public notice for and conduct at least one public hearing on the WRIA plan submitted to the county under this section. The counties shall take care to provide notice of the hearings throughout the WRIA or multi-WRIA area. As a minimum, they shall publish a notice of the hearings in one or more newspapers of general circulation in the WRIA or multi-WRIA area. After the public hearings, the legislative authorities of these counties shall convene in joint session to consider the plan. The counties may approve or reject the plan, but may not amend the plan. Approval of a plan, or of recommendations for a plan that is not approved, shall be made by a majority vote of the members of the various legislative authorities of the counties with territory in the WRIA based on the votes allocated under section 102 of this act. If the plan is not approved, it shall be returned to the WRIA planning unit with recommendations for revisions. Any revised plan and implementing rules prepared by the planning unit shall be submitted to the department and to the counties as provided by this section for WRIA water resource plans generally. (6) If the plan is approved by the members of the legislative authorities, the plan shall be transmitted to the department for adoption. The department shall adopt such an approved WRIA water resource plan by rule. The department has no discretion to amend or reject the plan. A copy of the plan and notice of its adoption as rules shall be published in the state register under chapter 34.05 RCW. The public hearing required by chapter 34.05 RCW shall be deemed to have been satisfied by public hearings held by county legislative authorities. (7) If the department finds that an element of its WRIA plan is in conflict with state or federal law, the planning unit may either redraft the plan to be consistent with state and federal law, or if it believes the department's findings are in error, may petition the superior court for an order to require performance by the department under RCW 34.05.570(3). If the superior court finds that an element of the plan is in conflict with state or federal law, that element of the plan shall be invalid. Decisions on such petitions are reviewable as in other civil cases. This subsection shall not be construed as establishing such state liability for any other element of the plan adopted as rules. The planning unit may request that the legislature modify a state law in order to implement a portion of a plan found to be in conflict with the law.

NEW SECTION. Sec. 114. The WRIA planning units may accept grants, funds, and other financing, as well as enter into cooperative agreements with private and public entities for planning assistance and funding.

NEW SECTION. Sec. 115. A new section is added to chapter 90.03 RCW to read as follows:

(1) The department shall rule in a timely manner upon complete applications to appropriate public surface and ground water. For complete applications that seek to appropriate water from within a WRIA for which a WRIA plan has been adopted, the department shall grant or deny the application within one hundred eighty days of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. For applications that seek to appropriate water from within a WRIA for which no WRIA plan has been adopted, the department shall grant or deny the application within two years of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. The times allowed in this section to rule upon an application shall not include the time it takes the applicant to respond to an explicit request for additional information reasonably required to make a determination on the application. The department shall be allowed only one such request for additional information. The cost of obtaining such information shall be reasonable in relation to the quantity and value of the water right applied for. Once the applicant responds to an information request, the stay of the time allowed for the permit decision shall end. (2) If a detailed statement, generally referred to as an environmental impact statement, must be prepared under chapter 43.21C RCW for or in regard to an application to appropriate water, the department shall grant or deny the application within ninety days of the date the final environmental impact statement is available from the official responsible for it under chapter 43.21C RCW. NEW SECTION. Sec. 116. A new section is added to chapter 34.05 RCW to read as follows: (1) Once the department of ecology receives a water resource plan submitted by a WRIA planning unit for advice and recommendations under section 113 of this act, the department shall conduct at least one public hearing on the plan and shall provide notice of the hearing and proposed plan as provided in RCW 34.05.320 for the proposal of a rule. The department shall maintain a file for the plan. Once the plan has been adopted by the counties in the WRIA under section 113 of this act and the plan has been submitted to the department of ecology, the department shall file the plan with the code reviser along with an order adopting the plan as rules. The code reviser shall cause the order and the water resource plan to be published in the Washington state register in the manner provided for the adoption of final rules and shall incorporate the plan into the Washington Administrative Code. No other aspect of this chapter that establishes procedures for the adoption of rules applies to the adoption of the plan by the department. (2) For the purposes of this section, "WRIA" has the meaning established in section 104 of this act.PART IISTORAGESec. 201. RCW 90.54.020 and 1989 c 348 s 1 are each amended to read as follows: Utilization and management of the waters of the state shall be guided by the following general declaration of fundamentals: (1) Uses of water for domestic, stock watering, industrial, commercial, agricultural, irrigation, hydroelectric power production, mining, fish and wildlife maintenance and enhancement, recreational, and thermal power production purposes, and preservation of environmental and aesthetic values, and all other uses compatible with the enjoyment of the public waters of the state, are declared to be beneficial. (2) Allocation of waters among potential uses and users shall be based generally on the securing of the maximum net benefits for the people of the state. Maximum net benefits shall constitute total benefits less costs including opportunities lost. (3) The quality of the natural environment shall be protected and, where possible, enhanced as follows: (a) Perennial rivers and streams of the state shall be retained with base flows necessary to provide for preservation of wildlife, fish, scenic, aesthetic and other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served. (b) Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served. Technology-based effluent limitations or standards for discharges for municipal water treatment plants located on the Chehalis, Columbia, Cowlitz, Lewis, or Skagit river shall be adjusted to reflect credit for substances removed from the plant intake water if: (i) The municipality demonstrates that the intake water is drawn from the same body of water into which the discharge is made; and (ii) The municipality demonstrates that no violation of receiving water quality standards or appreciable environmental degradation will result. (4) The development of multipurpose water storage facilities shall be a high priority for programs of water allocation, planning, management, and efficiency. The department, other state agencies, local governments, and planning units formed under section 102 or 109 of this act shall evaluate the potential for the development of new storage projects and the benefits of storage in reducing damage to stream banks and property, increasing the use of land, providing water for municipal, industrial, agricultural, power generation, and other beneficial uses, and improving stream flow regimes for fisheries and other instream uses. (5) Adequate and safe supplies of water shall be preserved and protected in potable condition to satisfy human domestic needs.

(((5))) (6) Multiple-purpose impoundment structures are to be preferred over single-purpose structures. Due regard shall be given to means and methods for protection of fishery resources in the planning for and construction of water impoundment structures and other artificial obstructions. (((6))) (7) Federal, state, and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out practices of conservation as they relate to the use of the waters of the state. In addition to traditional development approaches, improved water use efficiency and conservation shall be emphasized in the management of the state's water resources and in some cases will be a potential new source of water with which to meet future needs throughout the state. (((7))) (8) Development of water supply systems, whether publicly or privately owned, which provide water to the public generally in regional areas within the state shall be encouraged. Development of water supply systems for multiple domestic use which will not serve the public generally shall be discouraged where water supplies are available from water systems serving the public. (((8))) (9) Full recognition shall be given in the administration of water allocation and use programs to the natural interrelationships of surface and ground waters. (((9))) (10) Expressions of the public interest will be sought at all stages of water planning and allocation discussions. (((10))) (11) Water management programs, including but not limited to, water quality, flood control, drainage, erosion control and storm runoff are deemed to be in the public interest. Sec. 202. RCW 90.54.180 and 1989 c 348 s 5 are each amended to read as follows: Consistent with the fundamentals of water resource policy set forth in this chapter, state and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out water use efficiency and conservation programs and practices consistent with the following: (1) Water efficiency and conservation programs should utilize an appropriate mix of economic incentives, cost share programs, regulatory programs, and technical and public information efforts. Programs which encourage voluntary participation are preferred. (2) Increased water use efficiency should receive consideration as a potential source of water in state and local water resource planning processes. In determining the cost-effectiveness of alternative water sources, consideration should be given to the benefits of conservation, including waste water recycling, and ((impoundment)) storage of waters. (3) In determining the cost-effectiveness of alternative water sources, full consideration should be given to the benefits of storage which can reduce the damage to stream banks and property, increase the utilization of land, provide water for municipal, industrial, agricultural, and other beneficial uses, provide for the generation of electric power from renewable resources, and improve stream flow regimes for fishery and other instream uses. (4) Entities receiving state financial assistance for construction of water source expansion or acquisition of new sources shall develop, and implement if cost-effective, a water use efficiency and conservation element of a water supply plan pursuant to RCW 43.20.230(1). (5) State programs to improve water use efficiency should focus on those areas of the state in which water is overappropriated; areas that experience diminished streamflows or aquifer levels; and areas where projected water needs, including those for instream flows, exceed available supplies. (6) Existing and future generations of citizens of the state of Washington should be made aware of the importance of the state's water resources and the need for wise and efficient use and development of this vital resource. In order to increase this awareness, state agencies should integrate public education on increasing water use efficiency into existing public information efforts. This effort shall be coordinated with other levels of government, including local governments and Indian tribes.PART IIIGENERAL ADJUDICATIONSNEW SECTION. Sec. 301. A new section is added to chapter 90.03 RCW to read as follows: The legislature finds that the lack of certainty regarding water rights within a water resource basin may impede management and planning for water resources. The legislature further finds that planning units conducting water resource planning under chapter 90.-- RCW (sections 101 through 114 of this act) may find that the certainty provided by a general adjudication of water rights under this chapter is required for water planning or water management in a water resource inventory area or in a portion of the area. Therefore, such planning units may petition the department to conduct such a general adjudication and the department shall give high priority to such a request in initiating any such general adjudications under this chapter.PART IVMISCELLANEOUSNEW SECTION. Sec. 401. As used in this act, part headings constitute no part of the law. NEW SECTION. Sec. 402. Sections 101 through 114 of this act constitute a new chapter in Title 90 RCW. NEW SECTION. Sec. 403. This act takes effect July 1, 1998."

MOTION

On motion of Senator Morton, the following Committee on Agriculture and Environment amendment was not adopted:

Strike everything after the enacting clause and insert the following:"PART IBASIN PLANSNEW SECTION. Sec. 101. The purpose of this chapter is to develop a more thorough and cooperative method of determining what the current water resource situation is in each water resource inventory area of the state and to provide local citizens with the maximum possible input concerning their goals and objectives for water resource management and development. It is necessary for the legislature to establish processes and policies that will result in providing state agencies with more specific guidance to manage the water resources of the state consistent with current law and direction provided by local entities and citizens through the process established in accordance with this chapter. NEW SECTION. Sec. 102. The legislature finds that the local development of watershed plans for managing water resources and for protecting existing water rights is vital to both state and local interests. The local development of these plans serves vital local interests by placing it in the hands of people: Who have the greatest knowledge of both the resources and the aspirations of those who live and work in the watershed; and who have the greatest stake in the proper, long-term management of the resources. The development of such plans serves the state's vital interests by ensuring that the state's water resources are used wisely, by protecting existing water rights, by protecting fish and other wildlife, by providing for the economic well-being of the state's citizenry and communities, and by protecting water-related fish and wildlife habitat. Therefore, the legislature believes it necessary for units of local government throughout the state to engage in the orderly development of these watershed plans. NEW SECTION. Sec. 103. When considering applications to appropriate public waters or the perfection, transfer, change, or cancellation of water right permits, the department shall not have discretion to take any action except in a manner consistent with the standards set forth in chapters 90.03, 90.44, and 90.54 RCW. NEW SECTION. Sec. 104. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter. (1) "Department" means the department of ecology. (2) "WRIA" means a water resource inventory area established in chapter 173-500 WAC as it existed on January 1, 1997. (3) "Water supply utility" means a water, combined water-sewer, irrigation, reclamation, or public utility district that provides water to persons or other water users within the district or a division or unit responsible for administering a publicly governed water supply system on behalf of a city, town, or county. (4) "WRIA plan" or "plan" means the product of the planning unit including any rules adopted in conjunction with the product of the planning unit. NEW SECTION. Sec. 105. (1) In order to have the best possible water resource program administration for the state, the legislature establishes the following principles and criteria to carry out the purpose and intent of chapter . . ., Laws of 1997 (this act). (2) All WRIA planning units established under this chapter shall develop a process to assure that water resource user interests and directly involved interest groups at the local level have the opportunity, in a fair and equitable manner, to give input and direction to the process. The following general principles shall guide the process: (a) All general categories of directly affected and closely related locally based interest groups shall have an equal voice in decision making; (b) State agencies with major water resource management responsibilities shall be available to share information on state-wide statutorily designated interests and responsibilities are duly considered; (c) Planning activities shall receive funding from the general fund; (d) The program development process carries an official and legal status by virtue of adoption of the plan by local governments; (e) The utmost flexibility is allowed for each WRIA unit in deciding the extent of the plan; and (f) WRIA planning units may incorporate elements into the plan in addition to those required under section 111 of this act. NEW SECTION. Sec. 106. Once a WRIA planning unit has been organized and has established priorities under section 111 of this act, it shall notify the department and may apply to the department for funding assistance for conducting the planning. The department shall provide fifty thousand dollars per WRIA to each unit applying. Planning units may apply to the department for additional funds to plan under this chapter to initiate such planning, provided from and to the extent of appropriations made by the legislature to the department expressly for this purpose. Preference shall be given to planning units requesting funding for conducting multi-WRIA planning under section 109 of this act. Preference shall also be given to planning projects that are clearly intended to respond to endangered species act listings or to attempt to resolve problems that may lead to such listings or to address water availability to meet projected growth based on office of financial management twenty-year population projections. Funding provided under this section shall be considered to be a contractual obligation against the moneys appropriated for this purpose. NEW SECTION. Sec. 107. (1) This chapter shall not be construed as creating a new cause of action against the state or any county, city, town, water supply utility, conservation district, or planning unit. (2) Notwithstanding RCW 4.92.090, 4.96.010, and 64.40.020, no claim for damages may be filed against the state or any county, city, town, water supply utility, Indian tribes, conservation district, or planning unit that or member of a planning unit who participates in a WRIA planning unit for performing responsibilities under this chapter. The exclusion from liability contained in this subsection does not apply to a county, city, town, or water supply utility that votes to adopt provisions in a WRIA plan that have been identified by the department as being in conflict with state or federal law with regard to those provisions if advice regarding the conflict was provided under section 113(2) of this act. NEW SECTION. Sec. 108. Except as provided in section 109 of this act for multi-WRIA planning, the county with the largest area within the boundaries of a WRIA may choose to initiate water resource planning for the WRIA under this chapter. If it does so choose, it shall make application to the department of ecology to declare its intent to conduct watershed planning. Upon making application to the department, the county with the largest area within the WRIA shall convene a meeting of the members of the legislative authorities of the counties with territory within a WRIA for the appointment of a WRIA planning unit. The county shall also notify the cities, water supply utilities, and conservation districts with territory within the WRIA that these groups are to meet to appoint their members of the WRIA planning unit. For the purposes of this section and sections 109 and 113 of this act, a county is considered to have territory within a WRIA only if the territory of the county located in the WRIA constitutes at least fifteen percent of the area of the WRIA. For conducting planning under this chapter, the county with the largest area within the boundaries of the WRIA is the lead agency for the WRIA planning, except as provided in section 109 of this act for multi-WRIA planning. By a majority vote of the county legislative authorities within the WRIA, an alternative lead agency may be selected. (2)(a) One WRIA planning unit shall be appointed for the WRIA as provided by this section or for a multi-WRIA area as provided by section 109 of this act for multi-WRIA planning. The planning unit shall be composed of: One member from each county with territory in the WRIA representing the county and appointed by the county; one member for each county with territory in the WRIA, but not less than two members, representing cities with territory in the WRIA and appointed jointly by those cities and incorporated towns; two members representing all water supply utilities with territory within the WRIA and appointed jointly by those districts; one member representing all conservation districts with territory within the WRIA and appointed jointly by those districts; and nine members representing various special interest groups appointed jointly by the counties with territory within the WRIA. If one or more federal Indian reservations are located in whole or in part within the boundaries of the WRIA, the planning unit shall include one member representing each reservation with territory in the WRIA, appointed by the tribes. Two members shall be appointed by the governor to represent state agencies. (b) In addition, for a WRIA located within Pierce, King, or Snohomish county, a representative of the water supply utility that is the largest water purveyor using water from the WRIA shall be an ex officio member of the planning unit whether the principal offices of the purveyor are or are not located within the WRIA. (3) Except for a person who is an ex officio member of the planning unit under subsection (2)(b) of this section, each person appointed to a WRIA planning unit shall have been a resident and a property owner of the WRIA for at least five years. State employees or state officials may be appointed to the planning unit as ex officio, nonvoting members. In appointing persons to the WRIA planning unit representing special interest groups, the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the WRIA. (4)(a) In voting to appoint the members of a WRIA planning unit, to select a lead agency for water resource planning under section 109 of this act, to approve a WRIA plan under section 113 of this act, or to request or concur with a request for multi-WRIA planning under section 109 of this act, each county with territory within the WRIA shall have three votes, divided equally among the members of the county's legislative authority and these actions shall be made by majority vote based on the votes allocated under this section. In voting to appoint members of a WRIA planning unit: Each city with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such cities; each water supply utility with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts; and each conservation district with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts. All appointments shall be made within sixty days of the date the appointing authorities other than the counties are notified to convene to make appointments or the appointments shall be made by the counties with territory in the WRIA in the same manner the counties make other appointments. (b) In selecting the membership of the planning unit in accordance with this subsection (4), the local governments may choose by majority vote to modify the membership of the planning unit. If the local governments choose to modify the membership, such changes shall be agreed to in accordance with subsection (a) of this subsection within thirty days of the filing of an application to plan with the department of ecology. If a modified planning unit composition cannot be agreed to within thirty days of the filing of an application, the membership shall be as provided in subsection (2)(a) of this section. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership. NEW SECTION. Sec. 109. (1) The counties with territory in a WRIA may elect to conduct multi-WRIA planning with the counties with territory in one or more other WRIAs. If the counties with territory in these other WRIAs concur, all of the counties with territory in these WRIAs shall convene and shall appoint one planning unit to conduct the water resource planning for the multi-WRIA area. (a) The planning unit shall be composed of: Up to one member, as that number is determined by the counties jointly, for each county with territory in the multi-WRIA area representing the counties and appointed by the counties jointly; up to one member, as that number is determined by the cities jointly, for each county with territory in the multi-WRIA area, representing cities with territory in the multi-WRIA area and appointed jointly by those cities; up to three members, as that number is determined by the districts, representing all water supply utilities with territory within the multi-WRIA area and appointed jointly by those districts; up to two members, as that number is determined by the districts, representing all conservation districts with territory within the multi-WRIA area and appointed jointly by those districts; four members representing the general citizenry, of which at least two shall be holders of water rights, appointed jointly by the counties with territory within the multi-WRIA area; and six members representing various special interest groups appointed jointly by the counties with territory within the multi-WRIA area. If one or more federal Indian reservations are located in whole or in part within the boundaries of the multi-WRIA area, the planning unit shall include one member representing each reservation with territory in the multi-WRIA area, appointed by the tribes. Two members shall be appointed by the governor to represent state agencies. (b) In addition, for a WRIA located within Pierce, King, or Snohomish county, a representative of the largest water purveyor using water from the multi-WRIA area shall be an ex officio member of the planning unit whether the principal offices of the purveyor are or are not located within the multi-WRIA area. (c) Except for a person who is an ex officio member of the planning unit under subsection (1)(b) of this section, each person appointed to a multi-WRIA planning unit shall have been a resident and property owner within the multi-WRIA area for at least five years. State employees or state officials may be appointed to the planning unit as ex officio, nonvoting members. In appointing persons to the multi-WRIA planning unit representing special interest groups the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the multi-WRIA area. (2)(a) The counties in the multi-WRIA area shall select, by a majority vote, a governmental entity in the multi-WRIA area to act as lead agency for water resource planning in the multi-WRIA area under this chapter. Such an entity shall serve as the lead agency if it agrees in writing to do so. All appointments shall be made within sixty days of the date the lead agency in the multi-WRIA area notifies the other appointing authorities to convene to make appointments or the appointments shall be made by the counties with territory in the multi-WRIA area in the same manner the counties make other appointments. (b) In selecting the membership of the planning unit in accordance with this subsection (2), the local governments may choose by majority vote to modify the membership of the planning unit. If the local governments choose to modify the membership, such changes shall be agreed to within thirty days of the filing of an application to plan with the department of ecology. If a modified planning unit composition cannot be agreed to within thirty days of the filing of an application, the membership shall be as provided in subsection (1)(a) of this section. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership. (3) A planning unit for a multi-WRIA area shall perform all of the functions assigned by this chapter to a WRIA planning unit and is subject to all of the provisions of this chapter that apply to a WRIA planning unit. NEW SECTION. Sec. 110. The lead agency shall provide staff support for the work of the WRIA planning unit. Each WRIA planning unit may establish its own methods of operation that are consistent with this chapter and may establish methods for reviewing the operations of its lead agency. No planning unit appointed or selected under this chapter may possess or exercise the power of eminent domain. No planning unit appointed or selected under this chapter may take any action that affects in any manner a general adjudication proceeding for water rights, completed or ongoing. Each WRIA planning unit is encouraged to: Consider information and plans that may have been previously developed by other entities in establishing water resource management plans for the WRIA; consider existing data regarding water resources in the WRIA; and, for a WRIA that borders another state, cooperate with local government counterparts in the adjacent state regarding water resource planning. Water resource plans developed under this chapter for a WRIA may not interfere in any manner with a general adjudication of water rights, completed or ongoing. Such a WRIA plan may not in any manner impair, diminish, or interfere with a water right that exists before the adoption of the plan by the department under section 113 of this act. All meetings of a WRIA planning unit shall be conducted as public meetings as required for such meetings by the open public meetings act, chapter 42.30 RCW. Some time shall be set aside at the end of each meeting of a WRIA planning unit for public comments. Each planning unit shall establish procedures to be followed by the unit in making decisions. The objective to be sought by the planning unit in making decisions is to reach consensus among its members on the decisions. Decisions by majority vote will be used only after the unit has found that attempts at achieving consensus have not been successful. No person who is a member of a WRIA planning unit may designate another to act on behalf of the person as a member or to attend as a member a meeting of the unit on behalf of the person. If a member of a WRIA planning unit is absent from more than five meetings of the WRIA planning unit that constitute twenty percent or more of the meetings that have been conducted by the planning unit while the person is a member of the unit and these absences have not been excused as provided by this section, the member's position on the WRIA planning unit is to be considered vacant. A person's absence from a meeting may be excused: By the chair of the planning unit if a written request to do so is received by the chair before the meeting from which the member is to be absent; or by a majority vote of the members of the planning unit at the meeting during which the member is absent. NEW SECTION. Sec. 111. (1) Each WRIA planning unit shall develop a water resource plan. The plan must contain the elements listed in subsection (2) of this section and may include other elements added by the planning unit. Once organized, the first task of the planning unit is to prioritize these elements regarding their importance in the WRIA and in developing a water resource plan for the WRIA. A plan shall not be developed such that its provisions are in conflict with state or federal law or impair, diminish, or interfere in any manner with a water right existing prior to its adoption or with the construction, operation, or maintenance of a federal reclamation project. Each plan shall acknowledge that the water rights of citizens are private rights to real property. (2) The plan must include the following: (a) An assessment of water supply and use in the WRIA, including: (i) A quantitative estimation of the amount of surface and ground water present in the planning unit, using United States geological survey information and other existing sources of information; (ii) A quantitative estimation using existing sources of information, of the amount of precipitation and surface and ground water available, using currently available or likely available technologies, collectively for both current and future water uses, including for instream purposes and for withdrawal or diversion; (iii) A quantitative estimation using existing sources of information, of the amount of surface and ground water actually being used, and the months of peak and minimum use, both in-stream and by withdrawal, for agricultural, industrial, fisheries, recreational, environmental, municipal, and residential purposes, and including amounts claimed, permitted, or certificated for future municipal needs; and (iv) A quantitative estimation of the amount of water, approximately, that is represented by amounts in claims in the water rights claims registry, in water use permits, in certificated rights, and in rules establishing instream flows; (b) A quantitative description of future water-based instream and out-of-stream needs in the planning unit, based on projected population and agricultural and other economic growth. That is, an identification of the water needed collectively for use for agricultural, fisheries, recreational, environmental, industrial, municipal, and residential purposes. If a federal reclamation project is providing water for reclamation purposes within the WRIA or multi-WRIA area, federal reclamation water use requirements shall be those for project lands within the WRIA or multi-WRIA area; (c) Instream flows. (i) Except for the main stem of the Columbia river or the main stem of the Snake river, a planning unit may propose instream flow levels as part of its plan for other rivers and streams in its WRIA or multi-WRIA area. (ii) The planning unit may propose adjustments to instream flow levels that have been set by the state before the adoption of the planning unit's plan and will propose instream flow levels as part of the plan for the other rivers, streams, and lakes for which it determines the establishment of flows or levels to be appropriate in the WRIA, or in the multi-WRIA area for multi-WRIA planning under section 109 of this act, and for which flows have not been previously set. An instream flow or base flow or level set for a body of water in a WRIA plan adopted by the department under section 113 of this act supersedes any other such flow or level previously established for the body of water; (d) A quantitative description of the ground water and of the surface water available for further appropriation including water that may be obtained through reuse. As used in this subsection (2)(d), "available" means available on the date the plan takes effect as a rule under section 113 of this act; (e) An identification of known areas that provide for the recharge of aquifers from the surface and areas where aquifers recharge surface bodies of water; (f) Strategies for increasing water supplies in the WRIA, including: (i) Water conservation measures; and (ii) Storage enhancements, including modifications to existing reservoirs, new reservoirs, and underground storage. Any quantity of water made available under these strategies is a quantity that is in addition to the water declared available for appropriation under (d) of this subsection; and (g) An identification of areas where voluntary water-related habitat improvement projects or voluntary transactions providing for the purchase of water-related habitat or water-related habitat easements would provide the greatest benefit to habitat in the WRIA, and a prioritization of the areas based on their potential for providing such benefits. The purpose of this element of the plan is to provide a means of coordinating nonregulatory, voluntary efforts for improving water-related habitat in the WRIA. No aspect of the plan may establish standards for water quality or regulate water quality in any manner whatsoever. (3) The department shall assist the planning unit in drafting proposed implementing rules for the elements of the plan over which the department has authority. The draft rules shall accompany the plan as it is reviewed under the provisions of this chapter. (4) A plan shall not be developed under this chapter to require directly or indirectly the implementation of laws, rules, or programs that are designed primarily to control water pollution or discharges of pollutants to water, to regulate effluent discharges or wastewater treatment systems or facilities, or to establish or require the achievement of water quality standards, including but not limited to chapter 90.48 RCW and rules adopted under chapter 90.48 RCW, the national pollutant discharge elimination system permit program, and the state waste discharge permit program. NEW SECTION. Sec. 112. (1) Water resource management plans developed pursuant to the process in this chapter and subsequently adopted by the department under section 113 of this act are presumed valid. This presumption shall apply in any petition or action filed against a plan. (2) All actions and decisions of the department regarding water resources in the WRIA shall be consistent with and based upon such an adopted plan for the WRIA. NEW SECTION. Sec. 113. (1) Upon completing a proposed water resource plan for the WRIA, the WRIA planning unit shall publish notice of and conduct at least one public hearing in the WRIA on the proposed plan. The planning unit shall take care to provide notice of the hearing throughout the WRIA or multi-WRIA area. As a minimum, it shall publish a notice of the hearing in one or more newspapers of general circulation in the WRIA or multi-WRIA area. After considering the public comments presented at the hearing or hearings, the planning unit shall submit a copy of its proposed plan to the department. A proposed plan may be submitted to the department only if the unit has provided interim approval of the plan for this purpose by a majority vote of the members of the planning unit. (2) The department shall conduct at least one public hearing, announced in accordance with chapter 34.05 RCW, on each proposed WRIA water resource plan submitted under this section. The department shall provide advice as to any specific subsections or sections of the plan that the department believes to be in conflict with state or federal law and may provide other recommendations regarding the plan. The department shall transmit its advice and recommendations regarding the plan to the WRIA planning unit within sixty days of receiving it for review. (3) The WRIA planning unit shall vote on each recommendation provided by the department and on the department's advice regarding any subsections or sections of the proposed WRIA plan the department believed to be in conflict with state or federal law. The planning unit may adopt such a recommendation or provide changes to respond to the advice of the department by a majority vote of the members of the planning unit. The WRIA planning unit shall approve a water resource plan for the WRIA by a two-thirds majority vote of the members of the planning unit. An approved plan shall be submitted to the counties with territory within the WRIA for adoption. If a WRIA planning unit receives funding for WRIA or multi-WRIA planning under section 106 of this act and does not approve a plan for submission to the counties within four years of the date the planning unit receives the first of that funding from the department for the planning, the department shall develop and adopt a water resource plan for the WRIA or multi-WRIA area. (4) Upon receipt of the completed plan by the county, the county shall submit for review a copy of the plan to the tribal council of each reservation with territory within the WRIA. The tribal council may review and provide comments and recommendations to the county within thirty days of the receipt of the plan. Public hearings required under subsection (5) of this section may not commence before the thirty-day period provided in this subsection for comments from tribal councils. (5) The legislative authority of each of the counties with territory within the WRIA shall provide public notice for and conduct at least one public hearing on the WRIA plan submitted to the county under this section. The counties shall take care to provide notice of the hearings throughout the WRIA or multi-WRIA area. As a minimum, they shall publish a notice of the hearings in one or more newspapers of general circulation in the WRIA or multi-WRIA area. After the public hearings, the legislative authorities of these counties shall convene in joint session to consider the plan. The counties may approve or reject the plan, but may not amend the plan. Approval of a plan, or of recommendations for a plan that is not approved, shall be made by a majority vote of the members of the various legislative authorities of the counties with territory in the WRIA based on the votes allocated under section 102 of this act. If the plan is not approved, it shall be returned to the WRIA planning unit with recommendations for revisions. Any revised plan and implementing rules prepared by the planning unit shall be submitted to the department and to the counties as provided by this section for WRIA water resource plans generally. (6) If the plan is approved by the members of the legislative authorities, the plan shall be transmitted to the department for adoption. The department shall adopt such an approved WRIA water resource plan by rule. The department has no discretion to amend or reject the plan. A copy of the plan and notice of its adoption as rules shall be published in the state register under chapter 34.05 RCW. The public hearing required by chapter 34.05 RCW shall be deemed to have been satisfied by public hearings held by county legislative authorities. (7) If the department finds that an element of its WRIA plan is in conflict with state or federal law, the planning unit may either redraft the plan to be consistent with state and federal law, or if it believes the department's findings are in error, may petition the superior court for an order to require performance by the department under RCW 34.05.570(3). If the superior court finds that an element of the plan is in conflict with state or federal law, that element of the plan shall be invalid. Decisions on such petitions are reviewable as in other civil cases. This subsection shall not be construed as establishing such state liability for any other element of the plan adopted as rules. The planning unit may request that the legislature modify a state law in order to implement a portion of a plan found to be in conflict with the law. NEW SECTION. Sec. 114. The WRIA planning units may accept grants, funds, and other financing, as well as enter into cooperative agreements with private and public entities for planning assistance and funding. NEW SECTION. Sec. 115. A new section is added to chapter 90.03 RCW to read as follows: (1) The department shall rule in a timely manner upon complete applications to appropriate public surface and ground water. For complete applications that seek to appropriate water from within a WRIA for which a WRIA plan has been adopted, the department shall grant or deny the application within one hundred eighty days of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. For applications that seek to appropriate water from within a WRIA for which no WRIA plan has been adopted, the department shall grant or deny the application within two years of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. The times allowed in this section to rule upon an application shall not include the time it takes the applicant to respond to an explicit request for additional information reasonably required to make a determination on the application. The department shall be allowed only one such request for additional information. The cost of obtaining such information shall be reasonable in relation to the quantity and value of the water right applied for. Once the applicant responds to an information request, the stay of the time allowed for the permit decision shall end. (2) If a detailed statement, generally referred to as an environmental impact statement, must be prepared under chapter 43.21C RCW for or in regard to an application to appropriate water, the department shall grant or deny the application within ninety days of the date the final environmental impact statement is available from the official responsible for it under chapter 43.21C RCW. NEW SECTION. Sec. 116. A new section is added to chapter 34.05 RCW to read as follows: (1) Once the department of ecology receives a water resource plan submitted by a WRIA planning unit for advice and recommendations under section 113 of this act, the department shall conduct at least one public hearing on the plan and shall provide notice of the hearing and proposed plan as provided in RCW 34.05.320 for the proposal of a rule. The department shall maintain a file for the plan. Once the plan has been adopted by the counties in the WRIA under section 113 of this act and the plan has been submitted to the department of ecology, the department shall file the plan with the code reviser along with an order adopting the plan as rules. The code reviser shall cause the order and the water resource plan to be published in the Washington state register in the manner provided for the adoption of final rules and shall incorporate the plan into the Washington Administrative Code. No other aspect of this chapter that establishes procedures for the adoption of rules applies to the adoption of the plan by the department. (2) For the purposes of this section, "WRIA" has the meaning established in section 104 of this act. PART IISTORAGE Sec. 201. RCW 90.54.020 and 1989 c 348 s 1 are each amended to read as follows: Utilization and management of the waters of the state shall be guided by the following general declaration of fundamentals: (1) Uses of water for domestic, stock watering, industrial, commercial, agricultural, irrigation, hydroelectric power production, mining, fish and wildlife maintenance and enhancement, recreational, and thermal power production purposes, and preservation of environmental and aesthetic values, and all other uses compatible with the enjoyment of the public waters of the state, are declared to be beneficial. (2) Allocation of waters among potential uses and users shall be based generally on the securing of the maximum net benefits for the people of the state. Maximum net benefits shall constitute total benefits less costs including opportunities lost. (3) The quality of the natural environment shall be protected and, where possible, enhanced as follows: (a) Perennial rivers and streams of the state shall be retained with base flows necessary to provide for preservation of wildlife, fish, scenic, aesthetic and other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served. (b) Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served. Technology-based effluent limitations or standards for discharges for municipal water treatment plants located on the Chehalis, Columbia, Cowlitz, Lewis, or Skagit river shall be adjusted to reflect credit for substances removed from the plant intake water if: (i) The municipality demonstrates that the intake water is drawn from the same body of water into which the discharge is made; and (ii) The municipality demonstrates that no violation of receiving water quality standards or appreciable environmental degradation will result. (4) The development of multipurpose water storage facilities shall be a high priority for programs of water allocation, planning, management, and efficiency. The department, other state agencies, local governments, and planning units formed under section 102 or 109 of this act shall evaluate the potential for the development of new storage projects and the benefits of storage in reducing damage to stream banks and property, increasing the use of land, providing water for municipal, industrial, agricultural, power generation, and other beneficial uses, and improving stream flow regimes for fisheries and other instream uses. (5) Adequate and safe supplies of water shall be preserved and protected in potable condition to satisfy human domestic needs. (((5))) (6) Multiple-purpose impoundment structures are to be preferred over single-purpose structures. Due regard shall be given to means and methods for protection of fishery resources in the planning for and construction of water impoundment structures and other artificial obstructions. (((6))) (7) Federal, state, and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out practices of conservation as they relate to the use of the waters of the state. In addition to traditional development approaches, improved water use efficiency and conservation shall be emphasized in the management of the state's water resources and in some cases will be a potential new source of water with which to meet future needs throughout the state. (((7))) (8) Development of water supply systems, whether publicly or privately owned, which provide water to the public generally in regional areas within the state shall be encouraged. Development of water supply systems for multiple domestic use which will not serve the public generally shall be discouraged where water supplies are available from water systems serving the public. (((8))) (9) Full recognition shall be given in the administration of water allocation and use programs to the natural interrelationships of surface and ground waters. (((9))) (10) Expressions of the public interest will be sought at all stages of water planning and allocation discussions. (((10))) (11) Water management programs, including but not limited to, water quality, flood control, drainage, erosion control and storm runoff are deemed to be in the public interest. Sec. 202. RCW 90.54.180 and 1989 c 348 s 5 are each amended to read as follows: Consistent with the fundamentals of water resource policy set forth in this chapter, state and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out water use efficiency and conservation programs and practices consistent with the following: (1) Water efficiency and conservation programs should utilize an appropriate mix of economic incentives, cost share programs, regulatory programs, and technical and public information efforts. Programs which encourage voluntary participation are preferred. (2) Increased water use efficiency should receive consideration as a potential source of water in state and local water resource planning processes. In determining the cost-effectiveness of alternative water sources, consideration should be given to the benefits of conservation, including waste water recycling, and ((impoundment)) storage of waters. (3) In determining the cost-effectiveness of alternative water sources, full consideration should be given to the benefits of storage which can reduce the damage to stream banks and property, increase the utilization of land, provide water for municipal, industrial, agricultural, and other beneficial uses, provide for the generation of electric power from renewable resources, and improve stream flow regimes for fishery and other instream uses. (4) Entities receiving state financial assistance for construction of water source expansion or acquisition of new sources shall develop, and implement if cost-effective, a water use efficiency and conservation element of a water supply plan pursuant to RCW 43.20.230(1). (5) State programs to improve water use efficiency should focus on those areas of the state in which water is overappropriated; areas that experience diminished streamflows or aquifer levels; and areas where projected water needs, including those for instream flows, exceed available supplies. (6) Existing and future generations of citizens of the state of Washington should be made aware of the importance of the state's water resources and the need for wise and efficient use and development of this vital resource. In order to increase this awareness, state agencies should integrate public education on increasing water use efficiency into existing public information efforts. This effort shall be coordinated with other levels of government, including local governments and Indian tribes.PART IIIGENERAL ADJUDICATIONSNEW SECTION. Sec. 301. A new section is added to chapter 90.03 RCW to read as follows: The legislature finds that the lack of certainty regarding water rights within a water resource basin may impede management and planning for water resources. The legislature further finds that planning units conducting water resource planning under chapter 90.-- RCW (sections 101 through 114 of this act) may find that the certainty provided by a general adjudication of water rights under this chapter is required for water planning or water management in a water resource inventory area or in a portion of the area. Therefore, such planning units may petition the department to conduct such a general adjudication and the department shall give high priority to such a request in initiating any such general adjudications under this chapter.PART IVMISCELLANEOUSNEW SECTION. Sec. 401. As used in this act, part headings constitute no part of the law. NEW SECTION. Sec. 402. Sections 101 through 114 of this act constitute a new chapter in Title 90 RCW. NEW SECTION. Sec. 403. This act takes effect July 1, 1998."

MOTION

Senator Morton moved that the following amendment be adopted:

Strike everything after the enacting clause and insert the following:"PART IBASIN PLANSNEW SECTION. Sec. 101. The purpose of this chapter is to develop a more thorough and cooperative method of determining what the current water resource situation is in each water resource inventory area of the state and to provide local citizens with the maximum possible input concerning their goals and objectives for water resource management and development. It is necessary for the legislature to establish processes and policies that will result in providing state agencies with more specific guidance to manage the water resources of the state consistent with current law and direction provided by local entities and citizens through the process established in accordance with this chapter. NEW SECTION. Sec. 102. The legislature finds that the local development of watershed plans for managing water resources and for protecting existing water rights is vital to both state and local interests. The local development of these plans serves vital local interests by placing it in the hands of people: Who have the greatest knowledge of both the resources and the aspirations of those who live and work in the watershed; and who have the greatest stake in the proper, long-term management of the resources. The development of such plans serves the state's vital interests by ensuring that the state's water resources are used wisely, by protecting existing water rights, by protecting instream flows for fish, and by providing for the economic well-being of the state's citizenry and communities. Therefore, the legislature believes it necessary for units of local government throughout the state to engage in the orderly development of these watershed plans. NEW SECTION. Sec. 103. When considering applications to appropriate public waters or the perfection, transfer, change, or cancellation of water right permits, the department shall not have discretion to take any action except in a manner consistent with the standards set forth in chapters 90.03, 90.22, 90.44, and 90.54 RCW. NEW SECTION. Sec. 104. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter. (1) "Department" means the department of ecology. (2) "WRIA" means a water resource inventory area established in chapter 173-500 WAC as it existed on January 1, 1997. (3) "Water supply utility" means a water, combined water-sewer, irrigation, reclamation, or public utility district that provides water to persons or other water users within the district or a division or unit responsible for administering a publicly governed water supply system on behalf of a city, town, or county. (4) "WRIA plan" or "plan" means the product of the planning unit including any rules adopted in conjunction with the product of the planning unit. NEW SECTION. Sec. 105. In order to have the best possible program for appropriating and administering water use in the state, the legislature establishes the following principles and criteria to carry out the purpose and intent of chapter . . ., Laws of 1997 (this act). (1) All WRIA planning units established under this chapter shall develop a process to assure that water resource user interests and directly involved interest groups at the local level have the opportunity, in a fair and equitable manner, to give input and direction to the process. (2) State agencies with major water resource management responsibilities shall be available to share information on state-wide statutorily designated interests. (3) Plans developed under chapter . . ., Laws of 1997 (this act) shall be consistent with and not duplicative of efforts already under way in a WRIA, including but not limited to watershed analysis conducted under state forest practices statutes and rules. NEW SECTION. Sec. 106. (1) Once a WRIA planning unit has been organized and designated a lead agency, it shall notify the department and may apply to the department for funding assistance for conducting the planning. Funds shall be provided from and to the extent of appropriations made by the legislature to the department expressly for this purpose. (2) Each planning unit that has complied with subsection (1) of this section is eligible to receive fifty thousand dollars for each WRIA to initiate the planning process. The department shall allocate additional funds to WRIA planning units based on demonstrated need. Each WRIA planning unit may receive up to two hundred fifty thousand dollars for each WRIA during the first two-year period of planning, with a maximum allocation of five hundred thousand dollars for each WRIA. Funding provided under this section shall be considered a contractual obligation against the moneys appropriated for this purpose. (3) Preference shall be given to planning units requesting funding for conducting multi-WRIA planning under section 109 of this act. Preference shall also be given to planning projects that are clearly intended to respond to endangered species act listings or to attempt to resolve problems that may lead to such listings or to address water availability to meet projected growth based on office of financial management twenty-year population projections. (4) The department may retain up to one percent of funds allocated under this section to defray administrative costs. NEW SECTION. Sec. 107. (1) This chapter shall not be construed as creating a new cause of action against the state or any county, city, town, water supply utility, conservation district, or planning unit. (2) Notwithstanding RCW 4.92.090, 4.96.010, and 64.40.020, no claim for damages may be filed against the state or any county, city, town, water supply utility, Indian tribes, conservation district, or planning unit that or member of a planning unit who participates in a WRIA planning unit for performing responsibilities under this chapter. The exclusion from liability contained in this subsection does not apply to a county, city, town, or water supply utility that votes to adopt provisions in a WRIA plan that have been identified by the superior court as being in conflict with state statute or federal law with regard to those provisions if advice regarding the conflict was provided under section 113(2) of this act. NEW SECTION. Sec. 108. (1)(a) Except as provided in section 109 of this act for multi-WRIA planning, the county with the largest area within the boundaries of a WRIA or a municipal corporation obtaining its water supply from the WRIA may choose to initiate water resource planning for the WRIA under this chapter. If it does so choose, it shall make application to the department of ecology to declare its intent to conduct watershed planning. Upon making application to the department, the county with the largest area within the WRIA shall convene meetings of the members of the legislative authorities of the counties with territory within a WRIA for the appointment of a WRIA planning unit. The county or municipal corporation shall also notify the cities, water supply utilities, Indian tribes, and conservation districts with territory within the WRIA that these groups are to meet to appoint their members of the WRIA planning unit. For the purposes of this section and sections 109 and 113 of this act, a county is considered to have territory within a WRIA only if the territory of the county located in the WRIA constitutes at least fifteen percent of the area of the WRIA. For conducting planning under this chapter, the county with the largest area within the boundaries of the WRIA is the lead agency for the WRIA planning, except as provided in section 109 of this act for multi-WRIA planning. When the counties of a WRIA have convened jointly to make appointments to the planning unit, they may, by a majority vote, choose as the lead agency for WRIA planning any governmental entity in the WRIA. Such a governmental entity shall act as the lead agency for this purpose if it agrees in writing to accept the designation. (b) For a WRIA located within Pierce, King, or Snohomish county, the lead agency shall be the water supply utility that is using the largest amount of water from the WRIA. (2) In a WRIA where water resource planning efforts have commenced before the effective date of this section, such as but not limited to the Kettle river WRIA, the county legislative authorities with territory within the WRIA in accordance with subsection (1) of this section may, by majority vote, choose to adopt the existing planning unit membership for purposes of planning under chapter . . ., Laws of 1997 (this act). (3)(a) One WRIA planning unit shall be appointed for the WRIA as provided by this section or for a multi-WRIA area as provided by section 109 of this act for multi-WRIA planning. The planning unit shall be composed of: (i) One member from each county with territory in the WRIA representing the county and appointed by the county; (ii) one member for each county with territory in the WRIA, but not less than two members, representing cities with territory in the WRIA and appointed jointly by those cities and incorporated towns; (iii) two members representing water supply utilities other than those of a city or town with territory within the WRIA and appointed jointly by those districts; (iv) one member representing all conservation districts with territory within the WRIA and appointed jointly by those districts; (v) three members representing various special interest groups appointed jointly by the cities with territory within the WRIA; and six members representing various special interest groups appointed jointly by the counties with territory within the WRIA; (vi) one member representing the general citizenry appointed jointly by the cities with territory within the WRIA; (vii) three members representing the general citizenry appointed jointly by the counties with territory in the WRIA, of which at least one shall be a holder of a water right certificate and at least one shall be a holder of a water right for which a statement of claim was in the state's water rights claims registry before January 1, 1997; (viii) if one or more federal Indian reservations are located in whole or in part within the boundaries of the WRIA, the planning unit shall extend an invitation to the tribal government of each reservation to appoint one member representing the tribal government; and (ix) three members representing state agencies including the secretary of the department of transportation or the secretary's designee, the director of the department of fish and wildlife or the director's designee, and the director of the department of ecology or the director's designee. The three members representing state government shall have a single vote representing state agency interests. (b) In addition, for a WRIA located within Pierce, King, or Snohomish county, one representative of the water supply utility that is the water purveyor using the largest amount of water from the WRIA shall be a voting member of the planning unit whether the principal offices of the purveyor are or are not located within the WRIA. (4) Except for a person appointed under subsection (3)(a)(ix) or (b) of this section, each person appointed to a WRIA planning unit shall have been a resident and a property owner of the WRIA for at least three years. State employees or state officials other than members appointed under subsection (3)(a)(ix) or (b) of this section may be appointed to the planning unit unless they have state water resource-related duties. In appointing persons to the WRIA planning unit representing special interest groups, the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the WRIA. Counties shall attempt to provide for a balanced group of interests on the planning unit, with emphasis given to local interests and concerns. (5)(a) In voting to appoint the members of a WRIA planning unit, to select a lead agency for water resource planning under section 108 or 109 of this act, to approve a WRIA plan under section 113 of this act, or to request or concur with a request for multi-WRIA planning under section 109 of this act, each county with territory within the WRIA shall have three votes, divided equally among the members of the county's legislative authority and these actions shall be made by majority vote based on the votes allocated under this section. In voting to appoint members of a WRIA planning unit: Each city with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such cities; each water supply utility other than those of a city or town with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts; and each conservation district with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts. All appointments shall be made within sixty days of the date the appointing authorities other than the counties are notified to convene to make appointments or the appointments shall be made by the counties with territory in the WRIA in the same manner the counties make other appointments. (b) The local governments of the WRIA planning unit may, by majority vote, add up to two additional members representing interests that are not included in the planning unit. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership. NEW SECTION. Sec. 109. (1) The counties with territory in a WRIA may elect to conduct multi-WRIA planning with the counties with territory in one or more other WRIAs. If the counties with territory in these other WRIAs concur, all of the counties with territory in these WRIAs shall convene and shall appoint one planning unit to conduct the water resource planning for the multi-WRIA area. (a) The planning unit shall be composed of: (i) Up to one member, as that number is determined by the counties jointly, for each county with territory in the multi-WRIA area representing the counties and appointed by the counties jointly; (ii) up to one member, as that number is determined by the cities jointly, for each county with territory in the multi-WRIA area, representing cities with territory in the multi-WRIA area and appointed jointly by those cities; (iii) up to three members, as that number is determined by the districts, representing water supply utilities other than those of a city or town with territory within the multi-WRIA area and appointed jointly by those districts; (iv) up to two members, as that number is determined by the districts, representing all conservation districts with territory within the multi-WRIA area and appointed jointly by those districts; (v) three members representing various special interest groups appointed jointly by the cities with territory within the multi-WRIA area; and six members representing various special interest groups appointed jointly by the counties with territory within the multi-WRIA area; (vi) one member representing the general citizenry appointed jointly by the cities with territory within the multi-WRIA area; (vii) three members representing the general citizenry appointed jointly by the counties with territory in the multi-WRIA area, of which at least one shall be a holder of a water right certificate and at least one shall be a holder of a water right for which a statement of claim was in the state's water rights claims registry before January 1, 1997; (viii) if one or more federal Indian reservations are located in whole or in part within the boundaries of the multi-WRIA area, the planning unit shall extend an invitation to the tribal government of each reservation to appoint one member representing the tribal government; and (ix) three members representing state agencies including the secretary of the department of transportation or the secretary's designee, the director of the department of fish and wildlife or the director's designee, and the director of the department of ecology or the director's designee. The three members representing state government shall have a single vote representing state agency interests. (b) In addition, for a multi-WRIA planning unit located within Pierce, King, or Snohomish county, one representative of the water purveyor using the largest amount of water from the multi-WRIA area shall be a voting member of the planning unit whether the principal offices of the purveyor are or are not located within the multi-WRIA area. (c) Except for a person appointed under (a)(ix) or (b) of this subsection, each person appointed to a multi-WRIA planning unit shall have been a resident and property owner within the multi-WRIA area for at least three years. State employees or state officials other than members appointed under subsection (a)(ix) or (b) of this subsection may be appointed to the planning unit unless they have state water resource-related duties. In appointing persons to the multi-WRIA planning unit representing special interest groups the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the multi-WRIA area. Counties shall attempt to provide for a balanced group of interests on the planning unit, with emphasis given to local interests and concerns. (2) In a multi-WRIA area where water resource planning efforts have commenced before the effective date of this section, such as but not limited to the Kettle river WRIA, the county legislative authorities with territory within the WRIA in accordance with subsection (1) of this section may, by majority vote, choose to adopt the existing planning unit membership for purposes of planning under chapter . . ., Laws of 1997 (this act). (3)(a) The counties in the multi-WRIA area shall select, by a majority vote, a governmental entity in the multi-WRIA area to act as lead agency for water resource planning in the multi-WRIA area under this chapter. Such an entity shall serve as the lead agency if it agrees in writing to do so. All appointments shall be made within sixty days of the date the lead agency in the multi-WRIA area notifies the other appointing authorities to convene to make appointments or the appointments shall be made by the counties with territory in the multi-WRIA area in the same manner the counties make other appointments. (b) The local governments of the WRIA planning unit may, by majority vote, add up to two additional members representing interests that are not included in the planning unit. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership. (4) A planning unit for a multi-WRIA area shall perform all of the functions assigned by this chapter to a WRIA planning unit and is subject to all of the provisions of this chapter that apply to a WRIA planning unit. NEW SECTION. Sec. 110. The lead agency shall provide staff support from resources provided for planning under chapter . . ., Laws of 1997 (this act) for the work of the WRIA planning unit. Each WRIA planning unit may establish its own methods of operation that are consistent with this chapter and may establish methods for reviewing the operations of its lead agency. No planning unit appointed or selected under this chapter may possess or exercise the power of eminent domain. No planning unit appointed or selected under this chapter may take any action that affects in any manner a general adjudication proceeding for water rights, completed or ongoing. Each WRIA planning unit is encouraged to: Consider information and plans that may have been previously developed by other entities in establishing water resource management plans for the WRIA; consider existing data regarding water resources in the WRIA; and, for a WRIA that borders another state, cooperate with local government counterparts in the adjacent state regarding water resource planning. Water resource plans developed under this chapter for a WRIA may not interfere in any manner with a general adjudication of water rights, completed or ongoing. Such a WRIA plan may not in any manner impair, diminish, or interfere with a water right that exists before the adoption of the plan by the department under section 113 of this act. All meetings of a WRIA planning unit shall be conducted as public meetings as required for such meetings by the open public meetings act, chapter 42.30 RCW. Some time shall be set aside at the end of each meeting of a WRIA planning unit for public comments. Each planning unit shall establish procedures to be followed by the unit in making decisions. The objective to be sought by the planning unit in making decisions is to reach consensus among its members on the decisions. Decisions by a two-thirds majority vote may be used if the unit has found that attempts at achieving consensus have not been successful. No person who is a member of a WRIA planning unit may designate another to act on behalf of the person as a member or to attend as a member a meeting of the unit on behalf of the person. If a member of a WRIA planning unit is absent from more than five meetings of the WRIA planning unit that constitute twenty percent or more of the meetings that have been conducted by the planning unit while the person is a member of the unit and these absences have not been excused as provided by this section, the member's position on the WRIA planning unit is to be considered vacant. A person's absence from a meeting may be excused: By the chair of the planning unit if a written request to do so is received by the chair before the meeting from which the member is to be absent; or by a majority vote of the members of the planning unit at the meeting during which the member is absent. NEW SECTION. Sec. 111. (1) Each WRIA planning unit shall develop a water resource plan. The plan must address the elements listed in subsection (2) of this section and may include other elements added by the planning unit. Once organized, the first task of the planning unit is to prioritize these elements regarding their importance in the WRIA and in developing a water resource plan for the WRIA. A plan shall not be developed such that its provisions are in conflict with state statute or federal law or impair, diminish, or interfere in any manner with a water right existing prior to its adoption or with the construction, operation, or maintenance of a federal reclamation project or an instream flow requirement or condition established for hydroelectric power project licensed under the federal power act. No aspect of the plan may establish standards for water quality or regulate water quality in any manner whatsoever. (2) The plan must include the following: (a) An assessment of water supply and use in the WRIA, including: (i) A quantitative estimation of the amount of surface and ground water present in the planning unit, using United States geological survey information and other existing sources of information; (ii) A quantitative estimation using existing sources of information, of the amount of precipitation and surface and ground water available, using currently available or likely available technologies, collectively for both current and future water uses, including for instream purposes and for withdrawal or diversion; (iii) A quantitative estimation using existing sources of information, of the amount of surface and ground water actually being used, and the months of peak and minimum use, both in-stream and by withdrawal, for agricultural, industrial, fisheries, recreational, environmental, municipal, and residential purposes, and including amounts claimed, permitted, or certificated for future municipal needs; and (iv) A quantitative estimation of the amount of water, approximately, that is represented by amounts in claims in the water rights claims registry, in water use permits, in certificated rights, and in rules establishing instream flows; (b) A quantitative description of future water-based instream and out-of-stream needs in the planning unit, based on projected population and agricultural and other economic growth. That is, an identification of the water needed collectively for use for agricultural, fisheries, recreational, environmental, industrial, municipal, and residential purposes. If a federal reclamation project is providing water for reclamation purposes within the WRIA or multi-WRIA area, federal reclamation water use requirements shall be those for project lands within the WRIA or multi-WRIA area; (c) Instream flows. (i) Except for the main stem of the Columbia river or the main stem of the Snake river, a planning unit may propose instream flow levels as part of its plan for other rivers and streams in its WRIA or multi-WRIA area. (ii) The planning unit, by unanimous recorded vote of all voting members, may set specific instream flow levels, and such flow levels shall be adopted by rule of the department. (iii) If the planning unit is unable to approve specific instream flow levels unanimously, such levels may be submitted as a recommended instream flow in the WRIA plan for consideration by the department. Such recommendations must be approved by a two-thirds majority vote of the voting members of the planning unit. (iv) Instream flow levels proposed under this subsection may not conflict with flow requirements or conditions in effect under a license issued under the federal power act. (v) The planning unit may propose adjustments to instream flow levels that have been set by the state before the adoption of the planning unit's plan and will propose instream flow levels as part of the plan for the other rivers, streams, and lakes for which it determines the establishment of flows or levels to be appropriate in the WRIA, or in the multi-WRIA area for multi-WRIA planning under section 109 of this act. (vi) The planning unit, by unanimous recorded vote of all voting members, may adjust established instream flow levels, and such flow levels shall be adopted by rule of the department. (vii) If the planning unit is unable to approve such adjustments unanimously, such levels may be submitted as a recommended adjustment to established instream flows in the WRIA plan for consideration by the department. Such recommendations must be approved by a two-thirds majority vote of the voting members of the planning unit. (viii) An instream flow or base flow or level set for a body of water in a WRIA plan adopted by the department under section 113 of this act supersedes any other such flow or level previously established for the body of water; (d) A quantitative description of the ground water and of the surface water available for further appropriation including water that may be obtained through reuse. As used in this subsection (2)(d), "available" means available on the date the plan takes effect as a rule under section 113 of this act; (e) An identification of known areas that provide for the recharge of aquifers from the surface and areas where aquifers recharge surface bodies of water; (f) Strategies for increasing water supplies in the WRIA, including: (i) Water conservation and reuse measures; and (ii) Storage enhancements, including modifications to existing reservoirs, new reservoirs, and underground storage. Any quantity of water made available under these strategies is a quantity that is in addition to the water declared available for appropriation under (d) of this subsection; and (g) An identification of areas where voluntary water-related habitat improvement projects or voluntary transactions providing for the purchase of water-related habitat or water-related habitat easements would provide the greatest benefit to habitat in the WRIA, and a prioritization of the areas based on their potential for providing such benefits. The purpose of this element of the plan is to provide a means of coordinating nonregulatory, voluntary efforts for improving water-related habitat in the WRIA. (3) Upon request the department shall assist the planning unit in drafting proposed implementing rules for the elements of the plan over which the department has authority. The draft rules shall accompany the plan as it is reviewed under the provisions of this chapter. (4) A plan shall not be developed under this chapter to require directly or indirectly the implementation of laws, rules, or programs that are designed primarily to control water pollution or discharges of pollutants to water, to regulate effluent discharges or wastewater treatment systems or facilities, or to establish or require the achievement of water quality standards, including but not limited to chapter 90.48 RCW and rules adopted under chapter 90.48 RCW, the national pollutant discharge elimination system permit program, and the state waste discharge permit program. NEW SECTION. Sec. 112. (1) Water resource management plans developed pursuant to the process in this chapter and subsequently adopted by the department under section 113 of this act are presumed valid. This presumption shall apply in any petition or action filed against a plan. (2) Any action taken by a state agency regarding or affecting water resources within a WRIA for which a plan has been adopted under section 113 of this act and any planning conducted by a state agency regarding or affecting water resources within a WRIA for which a plan has been adopted under section 113 of this act shall be taken or conducted in a manner that is consistent with the plan. All actions and decisions of the department regarding water resources in the WRIA shall be consistent with and based upon such an adopted plan for the WRIA. Any other authority of the department exercised within the WRIA regarding or affecting water resources shall be exercised in a manner that is consistent with such an adopted plan. NEW SECTION. Sec. 113. (1) Upon completing a proposed water resource plan for the WRIA, the WRIA planning unit shall publish notice of and conduct at least one public hearing in the WRIA on the proposed plan. The planning unit shall take care to provide notice of the hearing throughout the WRIA or multi-WRIA area. As a minimum, it shall publish a notice of the hearing in one or more newspapers of general circulation in the WRIA or multi-WRIA area. After considering the public comments presented at the hearing or hearings, the planning unit shall submit a copy of its proposed plan to the department and to the tribal council of each reservation with territory within the WRIA. (2)(a) The department shall provide advice as to any specific subsections or sections of the plan that the department believes to be in conflict with state statute or federal law and may provide other recommendations regarding the plan. The department shall transmit its advice and recommendations regarding the plan to the WRIA planning unit within sixty days of receiving it for review. (b) The tribal council may review and provide comments and recommendations to the planning unit within sixty days of the receipt of the plan. (3) The WRIA planning unit shall consider each recommendation provided under subsection (2) of this section. The planning unit may adopt such a recommendation or provide changes to respond to the advice of the department and the tribal council by a two-thirds majority vote of the members of the planning unit. The WRIA planning unit shall approve a water resource plan for the WRIA by a two-thirds majority vote of the members of the planning unit. An approved plan shall be submitted to the counties with territory within the WRIA for adoption. If a WRIA planning unit receives funding for WRIA or multi-WRIA planning under section 106 of this act and does not approve a plan for submission to the counties within four years of the date the planning unit receives the first of that funding from the department for the planning, the department shall develop and adopt a water resource plan for the WRIA or multi-WRIA area. (4) The legislative authority of each of the counties with territory within the WRIA shall provide public notice for and conduct at least one public hearing on the WRIA plan submitted to the county under this section. The counties shall take care to provide notice of the hearings throughout the WRIA or multi-WRIA area. As a minimum, they shall publish a notice of the hearings in one or more newspapers of general circulation in the WRIA or multi-WRIA area. After the public hearings, the legislative authorities of these counties shall convene in joint session to consider the plan. The counties may approve or reject the plan, but may not amend the plan. Approval of a plan, or of recommendations for a plan that is not approved, shall be made by a majority vote of the members of the various legislative authorities of the counties with territory in the WRIA based on the votes allocated under section 108 of this act. If the plan is not approved, it shall be returned to the WRIA planning unit with recommendations for revisions. Any revised plan and implementing rules prepared by the planning unit shall be submitted to the department and to the counties as provided by this section for WRIA water resource plans generally. (5) If the plan is approved by the members of the legislative authorities, the plan shall be transmitted to the department for adoption. The department shall adopt such an approved WRIA water resource plan by rule. The department has no discretion to amend or reject the plan except as provided in section 111(2)(c) (iii) or (vii) of this act. A copy of the plan and notice of its adoption as rules shall be published in the state register under chapter 34.05 RCW. The public hearing required by chapter 34.05 RCW shall be deemed to have been satisfied by public hearings held by county legislative authorities. (6) If the department finds that an element of a WRIA plan is in conflict with state statute or federal law and the unit does not remove the conflict created by the element from its plan, the state is not liable for any judgment that may be awarded regarding the conflict. The department may file a petition for declaratory judgment in the superior court to determine whether the element is or is not in conflict with state statute or federal law. The petition shall be filed in the superior court in the county with the largest area in the WRIA or multi-WRIA area governed by the plan. The counties that approved the plan shall be named as parties to the proceeding. The superior court shall review the potential conflict under the error of law standard. If the superior court finds that an element of the plan is in conflict with state statute or federal law, that element of the plan shall be invalid. Decisions on such petitions are reviewable as in other civil cases. This subsection shall not be construed as establishing such state liability for any other element of the plan adopted as rules. NEW SECTION. Sec. 114. The WRIA planning units may accept grants, funds, and other financing, as well as enter into cooperative agreements with private and public entities for planning assistance and funding. NEW SECTION. Sec. 115. A new section is added to chapter 90.03 RCW to read as follows: (1) The department shall rule in a timely manner upon complete applications to appropriate public surface and ground water. For complete applications that seek to appropriate water from within a WRIA for which a WRIA plan has been adopted, the department shall grant or deny the application within one hundred eighty days of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. For applications filed after July 1, 1999, that seek to appropriate water from within a WRIA for which no WRIA plan has been adopted, the department shall grant or deny the application within one year of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. The times allowed in this section to rule upon an application shall not include the time it takes the applicant to respond to an explicit request for additional information reasonably required to make a determination on the application. The department shall be allowed only one such request for additional information. The cost of obtaining such information shall be reasonable in relation to the quantity and value of the water right applied for. Once the applicant responds to an information request, the stay of the time allowed for the permit decision shall end. (2) If a detailed statement, generally referred to as an environmental impact statement, must be prepared under chapter 43.21C RCW for or in regard to an application to appropriate water, the department shall grant or deny the application within ninety days of the date the final environmental impact statement is available from the official responsible for it under chapter 43.21C RCW. NEW SECTION. Sec. 116. A new section is added to chapter 34.05 RCW to read as follows: (1) Once the department of ecology receives a water resource plan submitted by a WRIA planning unit for advice and recommendations under section 113 of this act, the department shall conduct at least one public hearing on the plan and shall provide notice of the hearing and proposed plan as provided in RCW 34.05.320 for the proposal of a rule. The department shall maintain a file for the plan. Once the plan has been adopted by the counties in the WRIA under section 113 of this act and the plan has been submitted to the department of ecology, the department shall file the plan with the code reviser along with an order adopting the plan as rules. The code reviser shall cause the order and the water resource plan to be published in the Washington state register in the manner provided for the adoption of final rules and shall incorporate the plan into the Washington Administrative Code. No other aspect of this chapter that establishes procedures for the adoption of rules applies to the adoption of the plan by the department. (2) For the purposes of this section, "WRIA" has the meaning established in section 104 of this act. Sec. 117. RCW 90.54.040 and 1997 c ... s 2 (Senate Bill 5029) are each amended to read as follows: (1) Consistent with chapter . . ., Laws of 1997 (this act) the department, through the adoption of appropriate rules, is directed, as a matter of high priority to insure that the waters of the state are utilized for the best interests of the people, to develop and implement in accordance with the policies of this chapter a comprehensive state water resources program which will provide a process for making decisions on future water resource allocation and use. The department may develop the program in segments so that immediate attention may be given to waters of a given physioeconomic region of the state or to specific critical problems of water allocation and use. (2) In relation to the management and regulatory programs relating to water resources vested in it, the department is further directed to modify existing regulations and adopt new regulations, when needed and possible, to insure that existing regulatory programs are in accord with the water resource policy of this chapter and the program established in subsection (1) of this section. (3) The department is directed to review all statutes relating to water resources which it is responsible for implementing. When any of the same appear to the department to be ambiguous, unclear, unworkable, unnecessary, or otherwise deficient, it shall make recommendations to the legislature including appropriate proposals for statutory modifications or additions. Whenever it appears that the policies of any such statutes are in conflict with the policies of this chapter, and the department is unable to fully perform as provided in subsection (2) of this section, the department is directed to submit statutory modifications to the legislature which, if enacted, would allow the department to carry out such statutes in harmony with this chapter.

PART IISTORAGESec. 201. RCW 90.54.020 and 1989 c 348 s 1 are each amended to read as follows:Utilization and management of the waters of the state shall be guided by the following general declaration of fundamentals:(1) Uses of water for domestic, stock watering, industrial, commercial, agricultural, irrigation, hydroelectric power production, mining, fish and wildlife maintenance and enhancement, recreational, and thermal power production purposes, and preservation of environmental and aesthetic values, and all other uses compatible with the enjoyment of the public waters of the state, are declared to be beneficial.(2) Allocation of waters among potential uses and users shall be based generally on the securing of the maximum net benefits for the people of the state. Maximum net benefits shall constitute total benefits less costs including opportunities lost.(3) The quality of the natural environment shall be protected and, where possible, enhanced as follows:(a) Perennial rivers and streams of the state shall be retained with base flows necessary to provide for preservation of wildlife, fish, scenic, aesthetic and other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served.(b) Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served. Technology-based effluent limitations or standards for discharges for municipal water treatment plants located on the Chehalis, Columbia, Cowlitz, Lewis, or Skagit river shall be adjusted to reflect credit for substances removed from the plant intake water if:(i) The municipality demonstrates that the intake water is drawn from the same body of water into which the discharge is made; and(ii) The municipality demonstrates that no violation of receiving water quality standards or appreciable environmental degradation will result.(4) The development of multipurpose water storage facilities shall be a high priority for programs of water allocation, planning, management, and efficiency. The department, other state agencies, local governments, and planning units formed under section 108 or 109 of this act shall evaluate the potential for the development of new storage projects and the benefits and effects of storage in reducing damage to stream banks and property, increasing the use of land, providing water for municipal, industrial, agricultural, power generation, and other beneficial uses, and improving stream flow regimes for fisheries and other instream uses.(5) Adequate and safe supplies of water shall be preserved and protected in potable condition to satisfy human domestic needs.(((5))) (6) Multiple-purpose impoundment structures are to be preferred over single-purpose structures. Due regard shall be given to means and methods for protection of fishery resources in the planning for and construction of water impoundment structures and other artificial obstructions.(((6))) (7) Federal, state, and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out practices of conservation as they relate to the use of the waters of the state. In addition to traditional development approaches, improved water use efficiency and conservation shall be emphasized in the management of the state's water resources and in some cases will be a potential new source of water with which to meet future needs throughout the state.(((7))) (8) Development of water supply systems, whether publicly or privately owned, which provide water to the public generally in regional areas within the state shall be encouraged. Development of water supply systems for multiple domestic use which will not serve the public generally shall be discouraged where water supplies are available from water systems serving the public.(((8))) (9) Full recognition shall be given in the administration of water allocation and use programs to the natural interrelationships of surface and ground waters.(((9))) (10) Expressions of the public interest will be sought at all stages of water planning and allocation discussions.(((10))) (11) Water management programs, including but not limited to, water quality, flood control, drainage, erosion control and storm runoff are deemed to be in the public interest.Sec. 202. RCW 90.54.180 and 1989 c 348 s 5 are each amended to read as follows:Consistent with the fundamentals of water resource policy set forth in this chapter, state and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out water use efficiency and conservation programs and practices consistent with the following:(1) Water efficiency and conservation programs should utilize an appropriate mix of economic incentives, cost share programs, regulatory programs, and technical and public information efforts. Programs which encourage voluntary participation are preferred.(2) Increased water use efficiency should receive consideration as a potential source of water in state and local water resource planning processes. In determining the cost-effectiveness of alternative water sources, consideration should be given to the benefits of conservation, including waste water recycling, and ((impoundment)) storage of waters.(3) In determining the cost-effectiveness of alternative water sources, full consideration should be given to the benefits of storage which can reduce the damage to stream banks and property, increase the utilization of land, provide water for municipal, industrial, agricultural, and other beneficial uses, provide for the generation of electric power from renewable resources, and improve stream flow regimes for fishery and other instream uses.(4) Entities receiving state financial assistance for construction of water source expansion or acquisition of new sources shall develop, and implement if cost-effective, a water use efficiency and conservation element of a water supply plan pursuant to RCW 43.20.230(1).(5) State programs to improve water use efficiency should focus on those areas of the state in which water is overappropriated; areas that experience diminished streamflows or aquifer levels; and areas where projected water needs, including those for instream flows, exceed available supplies.(6) Existing and future generations of citizens of the state of Washington should be made aware of the importance of the state's water resources and the need for wise and efficient use and development of this vital resource. In order to increase this awareness, state agencies should integrate public education on increasing water use efficiency into existing public information efforts. This effort shall be coordinated with other levels of government, including local governments and Indian tribes.

PART IIIGENERAL ADJUDICATIONSNEW SECTION. Sec. 301. A new section is added to chapter 90.03 RCW to read as follows:The legislature finds that the lack of certainty regarding water rights within a water resource basin may impede management and planning for water resources. The legislature further finds that planning units conducting water resource planning under chapter 90.-- RCW (sections 101 through 114 of this act) may find that the certainty provided by a general adjudication of water rights under this chapter is required for water planning or water management in a water resource inventory area or in a portion of the area. Therefore, such planning units may petition the department to conduct such a general adjudication and the department shall give high priority to such a request in initiating any such general adjudications under this chapter.

PART IVWATER PURVEYORSSec. 401. RCW 90.03.383 and 1991 c 350 s 1 are each amended to read as follows:(1) The legislature recognizes the value of interties for improving the reliability of public water systems, enhancing their management, and more efficiently utilizing the increasingly limited resource. Given the continued growth in the most populous areas of the state, the increased complexity of public water supply management, and the trend toward regional planning and regional solutions to resource issues, interconnections of public water systems through interties provide a valuable tool to ensure reliable public water supplies for the citizens of the state. Public water systems have been encouraged in the past to utilize interties to achieve public health and resource management objectives. The legislature finds that it is in the public interest to recognize interties existing and in use as of January 1, 1991, and to have associated water rights modified by the department of ecology to reflect current use of water through those interties, pursuant to subsection (3) of this section. The legislature further finds it in the public interest to develop a coordinated process to review proposals for interties commencing use after January 1, 1991.(2) For the purposes of this section, the following definitions shall apply:(a) "Interties" are interconnections between public water systems permitting exchange, acquisition, or delivery of wholesale and/or retail water between those systems for other than emergency supply purposes, where such exchange, acquisition, or delivery is within established instantaneous and annual withdrawal rates specified in the systems' existing water right permits or certificates, or contained in claims filed pursuant to chapter 90.14 RCW, and which results in better management of public water supply consistent with existing rights and obligations. Interties include interconnections between public water systems permitting exchange, acquisition, or delivery of water to serve as primary or secondary sources of supply((, but do not include development of new sources of supply to meet future demand)) and the development of new sources of supply to meet future demands if the water system or systems receiving water through such an intertie make efficient use of existing sources of water supply and the provision of water through such an intertie is consistent with local land use plans. For this purpose, a system's full compliance with the state department of health's conservation guidelines for such systems is deemed efficient use.(b) "Service area" is the area designated as the wholesale and/or retail area in a water system plan or a coordinated water system plan pursuant to chapter 43.20 or 70.116 RCW respectively. When a public water system does not have a designated service area subject to the approval process of those chapters, the service area shall be the designated place of use contained in the water right permit or certificate, or contained in the claim filed pursuant to chapter 90.14 RCW.(3)(a) Public water systems with interties existing and in use as of January 1, 1991, or that have received written approval from the department of health prior to that date, shall file written notice of those interties with the department of health and the department of ecology. The notice may be incorporated into the public water system's five-year update of its water system plan, but shall be filed no later than June 30, 1996. The notice shall identify the location of the intertie; the dates of its first use; the purpose, capacity, and current use; the intertie agreement of the parties and the service areas assigned; and other information reasonably necessary to modify the public water system's water right ((permit)). Notwithstanding the provisions of RCW 90.03.380 and 90.44.100, for public water systems with interties existing and in use or with written approval as of January 1, 1991, the department of ecology, upon receipt of notice meeting the requirements of this subsection, shall, as soon as practicable, modify the place of use descriptions in the water right permits, certificates, or claims to reflect the actual use through such interties, provided that the place of use is within service area designations established in a water system plan approved pursuant to chapter 43.20 RCW, or a coordinated water system plan approved pursuant to chapter 70.116 RCW, and further provided that the water used is within the instantaneous and annual withdrawal rates specified in the water rights ((permit)) and that no outstanding complaints of impairment to existing water rights have been filed with the department of ecology prior to September 1, 1991. Where such complaints of impairment have been received, the department of ecology shall make all reasonable efforts to resolve them in a timely manner through agreement of the parties or through available administrative remedies.(b) An intertie meeting the requirements of this subsection (3) for modifying the place of use description in a water right permit, certificate, or claim may be used to its full design or built capacity within the most recently approved retail or wholesale or retail and wholesale service area, without further approval under this section and without regard to the capacity actually used before January 1, 1991.(4) Notwithstanding the provisions of RCW 90.03.380 and 90.44.100, exchange, acquisition, or delivery of water through interties approved by the department of health commencing use after January 1, 1991, shall be permitted when the intertie improves overall system reliability, enhances the manageability of the systems, provides opportunities for conjunctive use, or delays or avoids the need to develop new water sources, and otherwise meets the requirements of this section, provided that each public water system's water use shall not exceed the instantaneous or annual withdrawal rate specified in its water right authorization, shall not adversely affect existing water rights, and shall not be inconsistent with state-approved plans such as water system plans or other plans which include specific proposals for construction of interties. Interties approved and commencing use after January 1, 1991, shall not be inconsistent with regional water resource plans developed pursuant to chapter 90.54 RCW or chapter 90.-- RCW (sections 101 through 114 of this act).(5) For public water systems subject to the approval process of chapter 43.20 RCW or chapter 70.116 RCW, proposals for interties commencing use after January 1, 1991, shall be incorporated into water system plans pursuant to chapter 43.20 RCW or coordinated water system plans pursuant to chapter 70.116 RCW and submitted to the department of health and the department of ecology for review and approval as provided for in subsections (5) through (9) of this section. The plan shall state how the proposed intertie will improve overall system reliability, enhance the manageability of the systems, provide opportunities for conjunctive use, or delay or avoid the need to develop new water sources.(6) The department of health shall be responsible for review and approval of proposals for new interties. In its review the department of health shall determine whether the intertie satisfies the criteria of subsection (4) of this section, with the exception of water rights considerations, which are the responsibility of the department of ecology, and shall determine whether the intertie is necessary to address emergent public health or safety concerns associated with public water supply.(7) If the intertie is determined by the department of health to be necessary to address emergent public health or safety concerns associated with public water supply, the public water system shall amend its water system plan as required and shall file an application with the department of ecology to change its existing water right to reflect the proposed use of the water as described in the approved water system plan. The department of ecology shall process the application for change pursuant to RCW 90.03.380 or 90.44.100 as appropriate, except that, notwithstanding the requirements of those sections regarding notice and protest periods, applicants shall be required to publish notice one time, and the comment period shall be fifteen days from the date of publication of the notice. Within sixty days of receiving the application, the department of ecology shall issue findings and advise the department of health if existing water rights are determined to be adversely affected. If no determination is provided by the department of ecology within the sixty-day period, the department of health shall proceed as if existing rights are not adversely affected by the proposed intertie. The department of ecology may obtain an extension of the sixty-day period by submitting written notice to the department of health and to the applicant indicating a definite date by which its determination will be made. No additional extensions shall be granted, and in no event shall the total review period for the department of ecology exceed one hundred eighty days.(8) If the department of health determines the proposed intertie appears to meet the requirements of subsection (4) of this section but is not necessary to address emergent public health or safety concerns associated with public water supply, the department of health shall instruct the applicant to submit to the department of ecology an application for change to the underlying water right or claim as necessary to reflect the new place of use. The department of ecology shall consider the applications pursuant to the provisions of RCW 90.03.380 and 90.44.100 as appropriate. The department of ecology shall not deny or limit a change of place of use for an intertie on the grounds that the holder of a permit has not yet put all of the water authorized in the permit to beneficial use. If in its review of proposed interties and associated water rights the department of ecology determines that additional information is required to act on the application, the department may request applicants to provide information necessary for its decision, consistent with agency rules and written guidelines. Parties disagreeing with the decision of the department of ecology ((on)) to approve or deny the application for change in place of use may appeal the decision to the pollution control hearings board.(9) The department of health may approve plans containing intertie proposals prior to the department of ecology's decision on the water right application for change in place of use. However, notwithstanding such approval, construction work on the intertie shall not begin until the department of ecology issues the appropriate water right document to the applicant consistent with the approved plan.(10) The 1997 amendments to this section in this act are null and void if any one of sections 101 through 116 of this act is vetoed by June 30, 1997.Sec. 402. RCW 90.03.330 and 1987 c 109 s 89 are each amended to read as follows:(1) Upon a showing satisfactory to the department that any appropriation has been perfected in accordance with the provisions of this chapter, it shall be the duty of the department to issue to the applicant a certificate stating such facts in a form to be prescribed by him, and such certificate shall thereupon be recorded with the department. Any original water right certificate issued, as provided by this chapter, shall be recorded with the department and thereafter, at the expense of the party receiving the same, be by the department transmitted to the county auditor of the county or counties where the distributing system or any part thereof is located, and be recorded in the office of such county auditor, and thereafter be transmitted to the owner thereof.(2) If a public water system is providing water for municipal supply purposes under a certificated water right, the instantaneous and annual withdrawal rates specified in the certificate are deemed valid and perfected.(3) If a federal reclamation project is providing water for reclamation purposes under a certificated water right, the instantaneous and annual withdrawal rates specified in the certificate are deemed valid and perfected.(4) If an irrigation district is providing water for the purposes authorized by chapter 87.03 RCW under a certificated water right, the instantaneous and annual withdrawal rates specified in the certificate are deemed valid and perfected.(5) The 1997 amendments to this section in this act are null and void if any one of sections 101 through 116 of this act is vetoed by June 30, 1997.

PART VRELINQUISHMENT Sec. 501. RCW 90.14.140 and 1987 c 125 s 1 are each amended to read as follows: (1) For the purposes of RCW 90.14.130 through 90.14.180, "sufficient cause" shall be defined as the nonuse of all or a portion of the water by the owner of a water right for a period of five or more consecutive years where such nonuse occurs as a result of: (a) Drought, or other unavailability of water; (b) Active service in the armed forces of the United States during military crisis; (c) Nonvoluntary service in the armed forces of the United States; (d) The operation of legal proceedings; (e) Federal laws imposing land or water use restrictions either directly or through the voluntary enrollment of a landowner in a federal program implementing those laws, or acreage limitations, or production quotas; (f) An elapse of time occurring while a request or application is processed for transferring or changing a water right to use by a public water supplier for municipal purposes; (g) The implementation of practices or technologies or the installation or repair of facilities, including but not limited to water conveyance practices, technologies, or facilities, that are more efficient or more water use efficient than practices, technologies, or facilities previously used under the water right. (2) Notwithstanding any other provisions of RCW 90.14.130 through 90.14.180, there shall be no relinquishment of any water right: (a) If such right is claimed for power development purposes under chapter 90.16 RCW and annual license fees are paid in accordance with chapter 90.16 RCW, or (b) If such right is used for a standby or reserve water supply to be used in time of drought or other low flow period so long as withdrawal or diversion facilities are maintained in good operating condition for the use of such reserve or standby water supply, or (c) If such right is claimed for a determined future development to take place ((either)) at any time within fifteen years of either July 1, 1967, or the most recent beneficial use of the water right, whichever date is later, or (d) If such right is claimed for municipal water supply purposes under chapter 90.03 RCW, or (e) If such waters are not subject to appropriation under the applicable provisions of RCW 90.40.030 as now or hereafter amended.PART VIGENERAL PERMITSNEW SECTION. Sec. 601. The legislature finds that the present delay in the processing of water right applications is not beneficial to the citizens of the state nor is it in keeping with the goal of managing the resource to the highest possible standard and maximum net benefit. The legislature further finds that water conservation efforts would be greatly enhanced by a permit system that encourages water right applicants to use only the amount of water actually necessary to meet their needs. NEW SECTION. Sec. 602. A new section is added to chapter 90.03 RCW to read as follows: (1) The department shall develop a general permit system for appropriating water for nonconsumptive, nonbypass uses. This system must be designed and used to accurately identify and register any water right application that qualifies for the streamlined process of appropriation of water by meeting the requirements in this section and registering the use. The general permit system must be applicable state-wide, and all waters of the state shall be eligible for coverage under the system. The evaluation and report required for an application under RCW 90.03.290 are not required for applications processed under the general permit system. For the purposes of this section: (a) "Nonconsumptive, nonbypass use" means a use of water in which water is diverted from a stream or drawn from an aquifer and following its use is discharged back into or near the point of diversion or withdrawal without diminishment in quality and less than five thousand gallons of net consumption per day; and (b) "Without diminishment of quality" means that, before being discharged back to its source, the water being discharged meets state water quality standards adopted under chapter 90.48 RCW. (2) The department shall, by January 1, 1998, establish the general permit system by adopting rules in accordance with chapter 34.05 RCW. Before the adoption of rules for a system, the department shall consult with representatives of the following interest groups: Agriculture; aquaculture; home construction and development; county government; city government; surface mining; and the environmental community. At least four public hearings must be held at various locations around the state, not less than two of which shall be east of the crest of the Cascade mountains. The rules must identify criteria for proposed uses of water for which applications might be processed under the system and must establish procedures for filing and processing applications and issuing water rights certificates under the general permit system. NEW SECTION. Sec. 603. A new section is added to chapter 90.03 RCW to read as follows: An application for registration as a nonconsumptive, nonbypass water user under the general permit system established under section 602 of this act must be made on a form adopted and provided by the department. Within sixty days of receipt of a properly completed application, the department shall determine whether the proposed use is eligible to be processed under the general permit system. If the department determines that the proposed use is eligible to be processed under the system, the application must be processed under the system within the next sixty days. The priority date of the water right established pursuant to this section shall be the date that the properly completed application is submitted. If the department determines that the proposed use is not eligible for the processing, the department shall explain to the applicant in writing the reasons for its determination. For a proposed use determined ineligible for the processing, if the department finds that the information contained on the application form substantially satisfies the information requirements for an application for a use that would normally be filed for processing the application outside of the general permit system, the department shall notify the applicant of its finding and shall process the application as if it were filed for processing outside of the system. If the department finds that the information does not substantially satisfy the requirements, the application must be considered to be incomplete for the processing and the applicant must be notified of this consideration. NEW SECTION. Sec. 604. A new section is added to chapter 90.03 RCW to read as follows: Nothing in sections 602 and 603 of this act authorizes the impairment or operates to impair any existing water rights. A water right holder under sections 602 and 603 of this act shall not make withdrawals that impair a senior water right. A holder of a senior water right who believes his or her water right is impaired may file a complaint with the department of ecology. Where such complaints of impairment have been received, the department of ecology shall make all reasonable efforts to resolve them in a timely manner through agreement of the parties. Nothing in section 602 or 603 of this act may be construed as waiving any requirement established under chapter 90.48 RCW or federal law that a permittee secure a discharge permit regarding water quality. NEW SECTION. Sec. 605. If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 1997, in the omnibus appropriations act, this act is null and void. PART VIIAPPEALS NEW SECTION. Sec. 701. The legislature recognizes that in many cases the value of real property directly depends upon the amount of water that is available for use on that property. The legislature also recognizes that water rights are a type of property right in which many different parties may assert an interest. Current statutes require many property rights actions in which different parties assert interests, such as actions for partition or eminent domain, to be filed in superior court. The legislature further finds that informal procedures such as mediation and fact finding have been employed successfully in other areas of the law, and may produce positive results in certain types of water disputes. The legislature therefore finds that property owners should have a choice to select informal or formal hearings before the pollution control hearings board, and that relinquishment proceedings should be appealed to the local superior courts. Sec. 702. RCW 34.05.514 and 1995 c 347 s 113 and 1995 c 292 s 9 are each reenacted and amended to read as follows: (1) Except as provided in subsections (2) and (3) of this section, proceedings for review under this chapter shall be instituted by paying the fee required under RCW 36.18.020 and filing a petition in the superior court, at the petitioner's option, for (a) Thurston county, (b) the county of the petitioner's residence or principal place of business, or (c) in any county where the property owned by the petitioner and affected by the contested decision is located. (2) For proceedings involving institutions of higher education, the petition shall be filed either in the county in which the principal office of the institution involved is located or in the county of a branch campus if the action involves such branch. (3) For proceedings involving the relinquishment of a water right and appeals of informal hearings of the pollution control hearings board, the petition shall be filed in the superior court for the county in which is located the land upon which the water was used. Sec. 703. RCW 43.21B.110 and 1993 c 387 s 22 are each amended to read as follows: (1) The pollution control hearings board shall only have jurisdiction to hear and decide appeals from the following decisions of the department, the director, the administrator of the office of marine safety, and the air pollution control boards or authorities as established pursuant to chapter 70.94 RCW, or local health departments: (a) Civil penalties imposed pursuant to RCW 18.104.155, 70.94.431, 70.105.080, 70.107.050, 88.46.090, 90.03.600, 90.48.144, 90.56.310, and 90.56.330. (b) Orders issued pursuant to RCW 18.104.043, 18.104.060, 43.27A.190, 70.94.211, 70.94.332, 70.105.095, 86.16.020, 88.46.070, ((90.14.130,)) and 90.48.120. (c) The issuance, modification, or termination of any permit, certificate, or license by the department or any air authority in the exercise of its jurisdiction, including the issuance or termination of a waste disposal permit, the denial of an application for a waste disposal permit, or the modification of the conditions or the terms of a waste disposal permit. (d) Decisions of local health departments regarding the grant or denial of solid waste permits pursuant to chapter 70.95 RCW. (e) Decisions of local health departments regarding the issuance and enforcement of permits to use or dispose of biosolids under RCW 70.95J.080. (f) Any other decision by the department, the administrator of the office of marine safety, or an air authority which pursuant to law must be decided as an adjudicative proceeding under chapter 34.05 RCW. (2) The jurisdiction of the pollution control hearings board is further limited as follows: (a) The hearings board has no jurisdiction to review orders pertaining to the relinquishment of a water right under RCW 90.14.130, or to review proceedings regarding general adjudications of water rights conducted pursuant to chapter 90.03 or 90.44 RCW. (b) The following hearings shall not be conducted by the hearings board: (((a))) (i) Hearings required by law to be conducted by the shorelines hearings board pursuant to chapter 90.58 RCW. (((b))) (ii) Hearings conducted by the department pursuant to RCW 70.94.332, 70.94.390, 70.94.395, 70.94.400, 70.94.405, 70.94.410, and 90.44.180. (((c) Proceedings by the department relating to general adjudications of water rights pursuant to chapter 90.03 or 90.44 RCW. (d))) (iii) Hearings conducted by the department to adopt, modify, or repeal rules. (3) ((Review of)) Rules and regulations adopted by the hearings board shall be subject to review in accordance with the provisions of the Administrative Procedure Act, chapter 34.05 RCW. Sec. 704. RCW 43.21B.130 and 1990 c 65 s 3 are each amended to read as follows: The administrative procedure act, chapter 34.05 RCW, shall apply to the appeal of rules and regulations adopted by the board to the same extent as it applied to the review of rules and regulations adopted by the directors and/or boards or commissions of the various departments whose powers, duties and functions were transferred by section 6, chapter 62, Laws of 1970 ex. sess. to the department. ((All other decisions and orders of the director and all decisions of air pollution control boards or authorities established pursuant to chapter 70.94 RCW shall be subject to review by the hearings board as provided in this chapter.)) Sec. 705. RCW 43.21B.240 and 1989 c 175 s 105 are each amended to read as follows: The department and air authorities shall not have authority to hold adjudicative proceedings pursuant to the Administrative Procedure Act, chapter 34.05 RCW. Such hearings, except those involving water quantity decisions, as defined in section 713 of this act, that are appealed directly to a superior court, and appeals of orders pertaining to the relinquishment of a water right issued pursuant to RCW 90.14.130, shall be held by the pollution control hearings board. Sec. 706. RCW 43.21B.305 and 1994 c 253 s 5 are each amended to read as follows: In an appeal that involves a penalty of five thousand dollars or less, and in an informal hearing appeal relating to a water quantity decision as defined in section 713 of this act, the appeal may be heard by one member of the board, whose decision shall be the final decision of the board. The board shall define by rule alternative procedures to expedite small appeals. These alternatives may include: Mediation, upon agreement of all parties unless initiated as provided in section 713 of this act; submission of testimony by affidavit; conducting hearing by telephone; or other forms that may lead to less formal and faster resolution of appeals. Sec. 707. RCW 43.21B.310 and 1992 c 73 s 3 are each amended to read as follows: (1) Except as provided in subsection (2) of this section, any order issued by the department((, the administrator of the office of marine safety,)) or authority pursuant to RCW 70.94.211, 70.94.332, 70.105.095, 43.27A.190, 86.16.020, 88.46.070, or 90.48.120(2) or any provision enacted after July 26, 1987, or any permit, certificate, or license issued by the department may be appealed to the pollution control hearings board if the appeal is filed with the board and served on the department or authority within thirty days after receipt of the order. Except as provided under chapter 70.105D RCW, ((this is)) these are the exclusive means of appeal of such an order. (((2))) (a) The department, the administrator, or the authority in its discretion may stay the effectiveness of an order during the pendency of such an appeal. (((3))) (b) At any time during the pendency of an appeal of such an order to the board, the appellant may apply pursuant to RCW 43.21B.320 to the hearings board for a stay of the order or for the removal thereof. (((4))) (c) Any appeal before the hearings board must contain the following in accordance with the rules of the hearings board: (((a))) (i) The appellant's name and address; (((b))) (ii) The date and docket number of the order, permit, or license appealed; (((c))) (iii) A description of the substance of the order, permit, or license that is the subject of the appeal; (((d))) (iv) A clear, separate, and concise statement of every error alleged to have been committed; (((e))) (v) A clear and concise statement of facts upon which the requester relies to sustain his or her statements of error; and (((f))) (vi) A statement setting forth the relief sought. (((5))) (d) Upon failure to comply with any final order of the department or the administrator, the attorney general, on request of the department or the administrator, may bring an action in the superior court of the county where the violation occurred or the potential violation is about to occur to obtain such relief as necessary, including injunctive relief, to insure compliance with the order. The air authorities may bring similar actions to enforce their orders. (((6))) (e) An appealable decision or order shall be identified as such and shall contain a conspicuous notice to the recipient that it may be appealed only by filing an appeal with the hearings board and serving it on the department within thirty days of receipt. (2) Water quantity decisions of the department, as defined in section 713 of this act, may be appealed either to the pollution control hearings board or directly to a superior court as provided in section 713 of this act. Appeals of orders pertaining to the relinquishment of a water right are filed in superior court as provided by RCW 90.14.130. Sec. 708. RCW 43.27A.190 and 1987 c 109 s 11 are each amended to read as follows: Notwithstanding and in addition to any other powers granted to the department of ecology, whenever it appears to the department that a person is violating or is about to violate any of the provisions of the following: (1) Chapter 90.03 RCW; or (2) Chapter 90.44 RCW; or (3) Chapter 86.16 RCW; or (4) Chapter 43.37 RCW; or (5) Chapter 43.27A RCW; or (6) Any other law relating to water resources administered by the department; or (7) A rule or regulation adopted, or a directive or order issued by the department relating to subsections (1) through (6) of this section; the department may cause a written regulatory order to be served upon ((said)) the person either personally, or by registered or certified mail delivered to addressee only with return receipt requested and acknowledged by him or her. The order shall specify the provision of the statute, rule, regulation, directive or order alleged to be or about to be violated, and the facts upon which the conclusion of violating or potential violation is based, and shall order the act constituting the violation or the potential violation to cease and desist or, in appropriate cases, shall order necessary corrective action to be taken with regard to such acts within a specific and reasonable time. The regulation of a headgate or controlling works as provided in RCW 90.03.070, by a watermaster, stream patrolman, or other person so authorized by the department shall constitute a regulatory order within the meaning of this section. A regulatory order issued hereunder shall become effective immediately upon receipt by the person to whom the order is directed, except for regulations under RCW 90.03.070 which shall become effective when a written notice is attached as provided therein. Any person aggrieved by such order may appeal the order pursuant to RCW 43.21B.310, except that appeals of orders pertaining to the relinquishment of a water right shall be filed in superior court pursuant to RCW 90.14.130. Sec. 709. RCW 90.14.130 and 1987 c 109 s 13 are each amended to read as follows: When it appears to the department of ecology that a person entitled to the use of water has not beneficially used his or her water right or some portion thereof, and it appears that ((said)) the person's right has or may have reverted to the state because of such nonuse, as provided by RCW 90.14.160, 90.14.170, or 90.14.180, the department of ecology shall notify such person by order: PROVIDED, That where a company, association, district, or the United States has filed a blanket claim under the provisions of RCW 90.14.060 for the total benefits of those served by it, the notice shall be served on such company, association, district or the United States and not upon any of its individual water users who may not have used the water or some portion thereof which they were entitled to use. The order shall contain: (1) A description of the water right, including the approximate location of the point of diversion, the general description of the lands or places where such waters were used, the water source, the amount involved, the purpose of use, and the apparent authority upon which the right is based; (2) a statement that unless sufficient cause be shown on appeal the water right will be declared relinquished; and (3) a statement that such order may be appealed to the ((pollution control hearings board)) superior court. Any person aggrieved by such an order may appeal it to the ((pollution control hearings board pursuant to RCW 43.21B.310)) superior court for the county in which is located the land upon which the water was used. Any such appeal to superior court shall be heard de novo. The order shall be served by registered or certified mail to the last known address of the person and be posted at the point of division or withdrawal. The order by itself shall not alter the recipient's right to use water, if any. Sec. 710. RCW 90.14.190 and 1987 c 109 s 14 are each amended to read as follows: Any person feeling aggrieved by any decision of the department of ecology may have the same reviewed pursuant to RCW 43.21B.310. However, any order pertaining to the relinquishment of a water right shall be filed in superior court pursuant to RCW 90.14.130. In any such review, the findings of fact as set forth in the report of the department of ecology shall be prima facie evidence of the fact of any waiver or relinquishment of a water right or portion thereof. If the hearings board affirms the decision of the department, a party seeks review in superior court of that hearings board decision pursuant to chapter 34.05 RCW, and the court determines that the party was injured by an arbitrary, capricious, or erroneous order of the department, the court may award reasonable attorneys' fees. Sec. 711. RCW 90.14.200 and 1989 c 175 s 180 are each amended to read as follows: (1) All matters relating to the implementation and enforcement of this chapter by the department of ecology shall be carried out in accordance with chapter 34.05 RCW, the Administrative Procedure Act, except where the provisions of this chapter expressly conflict with chapter 34.05 RCW. Proceedings held pursuant to RCW 90.14.130 are ((adjudicative proceedings within the meaning of chapter 34.05 RCW. Final decisions of the department of ecology in these proceedings)) appealable to superior court as provided in that section. Other final decisions of the department of ecology under this chapter are subject to review by the pollution control hearings board in accordance with chapter 43.21B RCW. (2) RCW 90.14.130 provides nonexclusive procedures for determining a relinquishment of water rights under RCW 90.14.160, 90.14.170, and 90.14.180. RCW 90.14.160, 90.14.170, and 90.14.180 may be applied in, among other proceedings, general adjudication proceedings initiated under RCW 90.03.110 or 90.44.220: PROVIDED, That nothing herein shall apply to litigation involving determinations of the department of ecology under RCW 90.03.290 relating to the impairment of existing rights. Sec. 712. RCW 90.66.080 and 1979 c 3 s 8 are each amended to read as follows: The department is hereby empowered to promulgate such rules as may be necessary to carry out the provisions of this chapter. Decisions of the department, other than rule making, shall be subject to review by the pollution control hearings board or a superior court in accordance with chapter 43.21B RCW. NEW SECTION. Sec. 713. A new section is added to chapter 43.21B RCW to read as follows: (1) A water right claimant, or permit or certificate holder or applicant who is aggrieved or adversely affected by a water quantity decision may appeal the decision either to the pollution control hearings board pursuant to RCW 43.21B.310 or to the superior court for a county in which is located land on which the water is or was put to a beneficial use. (2) At the request of any party, the board shall conduct an informal hearing, consisting of mediation and, if a settlement cannot be agreed upon, fact finding with recommendations. The hearings board shall adopt rules governing the election, practice, and procedures of informal hearings consistent with this section and section 714 of this act. (3) For purposes of this chapter, a "water quantity decision" includes the following: (a) A decision to grant or deny a permit or certificate for a right to the beneficial use of water or to amend, change, or transfer such a right; and (b) A decision to enforce the conditions of a permit for, or right to, the beneficial use of water or to require any person to discontinue the use of water. NEW SECTION. Sec. 714. A new section is added to chapter 43.21B RCW to read as follows: (1) When one of the parties elects an informal hearing pursuant to section 713 of this act, a board member or an administrative law judge from the environmental hearings office shall be assigned as the mediator for the appeal. (2) The parties involved in the informal hearing must provide the mediator and the other parties in advance with a clear, concise statement of the disputed issues and the parties' position in relation to the issues and supporting documentation. The mediator shall meet with the parties either jointly or separately, in the general area of the project under review or by telephone, at the discretion of the mediator, and shall take such steps as the mediator deems appropriate to resolve their differences and reach a settlement agreement. If a settlement agreement is reached, the mediator shall prepare and submit to the hearings board a written order of dismissal to which the settlement agreement is attached. The hearings board shall enter the order and dismiss the case unless the hearings board finds that the settlement agreement is contrary to law. If the hearings board finds that the settlement agreement is contrary to law, it shall notify the parties and refer the dispute back to mediation. (3) If the parties are unable to achieve a settlement agreement within ninety days after being appointed, the mediator shall issue a statement that a settlement agreement has not been reached. After issuance of the statement, the party filing the appeal may request the hearings board to submit the dispute to fact finding with recommendations. Notice of the request for fact finding must be sent to the other parties. (4) Within five days of the receipt of the request for fact finding, the hearings board shall assign a board member or an administrative appeals judge from the environmental hearings office to serve as fact finder. The person who served as the mediator to the dispute may serve as the fact finder with the consent of both parties. (5) Within five days of being appointed, the fact finder shall establish a date, time, and place for the fact-finding hearing. The date of the hearing must be within thirty days of the appointment of the fact finder. The hearing shall be conducted in the general area where the project under review is located. At least seven days before the date of the hearing, each party must submit to the fact finder and to the other parties written proposals on all of the issues it intends to submit to fact finding. The fact finder has the power to issue subpoenas requiring the attendance and production of witnesses and the production of evidence. The order of presentation at the hearing shall be as agreed by the parties or as determined by the fact finder. Each documentary exhibit shall be filed with the fact finder and copies shall be provided to the other parties. The fact finder shall declare the hearing closed after the parties have completed presenting their testimony within agreed time limits. (6) The fact finder shall, within thirty days following the conclusion of the hearing, make written findings of fact and written recommendations to the parties as to how the dispute should be resolved. The fact finder may not apply any presumption as part of the findings of fact or recommendations. A copy of the findings and recommendations shall be filed with the hearings board. The findings of fact and recommendations of the fact finder are advisory only, and are not subject to review by the hearings board. (7) The time limits established in this section may be extended by mutual agreement of all the parties. NEW SECTION. Sec. 715. A new section is added to chapter 43.21B RCW to read as follows: (1) Within thirty days after the fact finder has filed the findings of fact and recommendations pursuant to section 714 of this act, a party may request a formal hearing by the hearings board or appeal the water quantity decision directly to superior court. All parties must agree to a formal hearing before a formal hearing is granted. (2) If a party elects to file an action in superior court following an informal hearing, it must be filed in the county in which is located the land upon which the water is or would be used. NEW SECTION. Sec. 716. A new section is added to chapter 43.21B RCW to read as follows: In all appeals involving a water quantity decision by the department, as defined in section 713 of this act, the appeal to superior court shall be heard de novo. If an informal hearing on the decision or order had been completed by the pollution control hearings board, no issue may be raised in superior court that was not raised and discussed as part of the fact-finding hearing. No bond may be required on appeals to the superior court or on review by the supreme court unless specifically required by the judge of the superior court.PART VIIIPILOT PROJECTSNEW SECTION. Sec. 801. A new section is added to chapter 90.03 RCW to read as follows: (1) The legislature finds that increased demand for water supplies in the state requires the state to manage its water resources wisely and that such wise management includes examining innovative policies for maximizing use while minimizing the impact of that use. The legislature declares that one such innovative policy is allowing the withdrawal of freshwater from streams or lakes just before the water would otherwise mix with marine water. To permit the state to evaluate adequately such a policy, the legislature authorizes as an exemption from the normal permitting process such uses for two pilot projects as provided by this section. (2)(a) A diversion of water for municipal purposes made as authorized by this section from a river with an instantaneous minimum flow of at least fifty cubic feet per second, measured at the point of diversion is exempt from the application and permit requirements of RCW 90.03.250 through 90.03.320 if the diversion is made within one mile upstream from the point at which the freshwater of the river begins to mix with saltwater. Such a diversion is subject to all other applicable state law. (b) A diversion of water for municipal purposes made as authorized by this section from the navigation locks at the outlet control facility for the outflow of water to saltwater from Lake Washington and Lake Union is exempt from the application and permit requirements of RCW 90.03.250 through 90.03.320 but is subject to all other applicable state law. (c) A diversion is authorized under this subsection if prior notification is provided to the department and confirmation is provided by the department as required under subsection (5) of this section and the water diverted is not in excess of the applicable limitations established in subsections (3) and (4) of this section. The right for the diversion established under this section is equal to that established by a permit issued under the provisions of this chapter, and is subject to minimum water flows or levels established by rule. (3) For diversions made under subsection (2)(a) of this section, no single diverter may divert more than ten percent of the instantaneous flow of the river in the specific area of the diversion, as such a flow would exist in the absence of diversions made under this section. (4) The total amount of water diverted under subsection (2)(b) of this section shall be not more than ninety percent of the amount released by the operation of the navigation locks. (5) Before a diversion of water is made under this section, the person shall notify the department in writing of the intent to divert water, the location of the point of diversion, and the annual and instantaneous amount of water to be diverted. The first two project notifications received shall be provided the exemption from water right permit processing under subsection (2) of this section. Upon receipt of the two notifications, the department shall provide a letter to the person proposing the diversion confirming that the project is one of the two pilot projects. No proposed diversion may begin until the project applicant has received such a confirmation letter from the department. (6) No diversion under this section may impair any existing water right downstream from the point of diversion unless compensation or mitigation for such impairment is agreed to by the holder of the affected water right. It is the duty of the potential diverter to ensure that the conditions of this subsection are met.

(7) The department shall compile the information provided under this section for diversions and shall make information available upon request. The department shall evaluate the effects and effectiveness of diversions made under this section and shall report its findings to the appropriate committees of the legislature by January 1, 2002.PART IXMISCELLANEOUSNEW SECTION. Sec. 901. As used in this act, part headings constitute no part of the law. NEW SECTION. Sec. 902. Sections 101 through 114 of this act constitute a new chapter in Title 90 RCW. NEW SECTION. Sec. 903. 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."

POINT OF ORDER

Senator Kline: “Thank you, Mr. President. I raise an objection to the scope and object of the amendment to Second Substitute House Bill No. 2054 and I am prepared to argue the relevant part in section 7. The first six parts of Second Substitute House Bill No. 2054 have to do with water resource management, WRIAs, and the allocation of resources among them. The new section 7 entitled 'Appeals' amends the Administrative Procedures Act, a different RCW--RCW 34.05--and creates a new cause of action in superior court for proceedings involving relinquishments of a water right and amends RCW 43.21B, limiting jurisdiction of the Pollution Control Hearings Board. It is clearly outside the scope and object of the original bill, dealing with water management.”

Further debate ensued.

MOTION

At 5:09 p.m., on motion of Senator Johnson, the Senate was declared to be at ease.

The Senate was called to order at 6:33 p.m. by President Owen.

There being no objection, the Senate resumed consideration of Second Substitute House Bill No. 2054 and the pending striking amendment by Senator Morton, which was being considered before the Senate went at ease.

RULING BY THE PRESIDENT

President Owen: “In ruling upon the point of order raised by Senator Kline, the President finds that Second Substitute House Bill No. 2054 is a measure which makes various changes in water resource planning, water rights and permit processes, including standards for relinquishment.

“The striking amendment by Senator Morton would also make various changes in water resource planning, water rights and permit processes, including procedures for appeals of relinquishments. In addition, the striking amendment would (EDITOR'S NOTE:) in Part VIII - authorize specific diversions of certain waters for municipal purposes.

“The President, therefore, finds that the proposed amendment does change the scope and object of the bill and the point of order is well taken.”

The striking amendment by Senator Morton to Second Substitute House Bill No. 2054 was ruled out of order.

PARLIAMENTARY INQUIRY

Senator Newhouse: “A point of parliamentary inquiry, Mr. President. With your ruling, where do we stand? Do we have a bill?

The bill that came over from the House?”

REPLY BY THE PRESIDENT

President Owen: “The President ruled on the striking amendment by Senator Morton as being beyond the scope and object of the bill.”

Senator Newhouse: “Of the original bill?”

President Owen: “Of the original bill. The original bill is still before us, Senator.”

Senator Newhouse: “With no amendments?”

President Owen: “The amendments at the desk were to the striking amendment and, therefore, those amendments would be out of order, unless another striking amendment is offered.”

Senator Morton: “In lieu of the President's decision, we are in the process of drafting a striker. It should be here very shortly to allow us to continue on beyond this point, excluding the portion that the President has just acted upon. I have no idea about the length of time, but I would assume within a few moments.”

PARLIAMENTARY INQUIRY

Senator Johnson: “A parliamentary inquiry, under the special order, which we are in at this time, is there any way that we can, in terms of efficiency, move to the other bill without abandoning or losing Second Substitute House Bill No. 2054?”

RULING BY THE PRESIDENT

President Owen: “Senator Johnson, the President believes for the expeditious operation of the Senate, that that would be appropriate.”

Debate ensued.

There being no objection, the Senate resumed consideration of Engrossed Second Substitute House Bill No. 1866 and the pending striking amendment by Senator Morton, deferred on second reading when the time came for the Special Order of Business on Second Substitute House Bill No. 2054.

MOTIONS

On motion of Senator Goings, Senator Haugen was excused.

On motion of Senator Franklin, Senators Bauer, Brown and Patterson were excused.

MOTION

Senator McAuliffe moved that the following amendment to the striking amendment by Senator Morton be adopted:

On page 3, after line 14, insert the following: "NEW SECTION. Sec. 4. The environmental excellence pilot program is hereby established under the procedures and limitations of this chapter. The department is authorized to enter up to three environmental excellence program agreements using the procedures of this chapter. The department shall solicit proposals for agreements that will provide important information to form recommendations for an expanded program by the advisory committee pursuant to section 18 of this act." Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator McAuliffe on page 3, after line 14, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator McAuliffe failed and the amendment to the striking amendment was not adopted.

MOTION

Senator McAuliffe moved that the following amendments to the striking amendment by Senator Morton be considered simultaneously and be adopted:

On page 13, line 32, after "committee" insert "at a minimum" On page 14, line 2, delete "October 31, 2001" and insert "December 31, 1998" Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senator McAuliffe on page 13, line 32, and page 14, line 2, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator McAuliffe failed and the amendments to the striking amendment were not adopted.

MOTION

Senator McAuliffe moved that the following amendments to the striking amendment by Senator Morton be considered simultaneously and be adopted:

On page 14, line 2, delete "2001" and insert "1999" On page 14, line 29, delete "2002" and insert "1999" Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senator McAuliffe on page 14, line 2, and page 14, line 29, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator McAuliffe failed and the amendments to the striking amendment were not adopted.

MOTION

Senator Fraser moved that the following amendment to the striking amendment by Senator Morton be adopted:

On page 3, line 14, after "modification." insert the following: "Where the director of the department of ecology proposes to enter an agreement providing for more efficient environmental results and the agreement includes provisions that supersede otherwise inconsistent legal requirements that will remain applicable to other businesses similarly situated to that of the project agreement sponsor, the director shall take such steps as are available administratively, or recommend legislative action if necessary, to make the alternatives in the agreement generally available to other businesses. In doing so the director shall ensure the overall environmental results achieved by any facility pursuing more efficient environmental results are not decreased below the level achieved through existing legal requirements. The purpose of this requirement is ensure that state approval of agreements with a single sponsor to reduce costs do not adversely affect the relative competitiveness of businesses in the same industrial or commercial activity." Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Fraser on page 3, line 14, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Fraser failed and the amendment to the striking amendment was not adopted.

MOTION

Senator Fraser moved that the following amendment to the striking amendment by Senator Morton be adopted:

On page 5, line 10, after "environmental" delete all material through "proposal;" on line 14, and insert the following: "analysis of: (i) the environmental impact of the proposed agreement; (ii) any adverse environmental effects which cannot be avoided should the agreement be implemented; (iii) alternatives to the proposed agreement; (iv) the relationship between short-term uses of the environment and the maintenance and enhancement of long-term productivity; and (v) any irreversible and irretrievable commitments of resources which would be involved in the proposed agreement should it be implemented;" Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Fraser on page 5, beginning on line 10, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Fraser failed and the amendment to the striking amendment was not adopted.

MOTION

Senator Thibaudeau moved that the following amendments by Senators Thibaudeau, Fraser and Fairley to the striking amendment by Senator Morton be considered simultaneously and be adopted:

On page 5, line 25, after "approved." insert "Both the process and the product in the development of an agreement will be improved by ensuring the participation of stakeholders who are informed regarding the technical elements of an agreement, and therefore it is in the public's interest to assist stakeholders in obtaining expert assistance in the relevant scientific disciplines for this purpose." On page 14 after line 30, insert the following: "NEW SECTION. Sec. 20. The department may provide grants to stakeholders to facilitate participation in the review and development of proposed environmental excellence program agreements, including assistance in the technical analysis of proposed agreements. Grants may be extended from funds appropriated to the department from the environmental excellence account created in section 32 of this act. No grant may exceed fifty thousand dollars." Renumber sections consecutively and correct internal references accordingly. Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senators Thibaudeau, Fraser and Fairley on page 5, line 25, and page 14, after line 30, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Thibaudeau failed and the amendments to the striking amendment were not adopted.

MOTION

Senator Thibaudeau moved that the following amendment by Senators Thibaudeau, Fraser and Fairley to the striking amendment by Senator Morton be adopted:

On page 6, after line 8 insert the following: "(4) In order to develop the proposed agreement, the coordinating agency shall create a committee composed of, at a minimum, representatives of an environmental group, the affected community, the sponsor, and any agencies involved in the project. Committee members must agree on the terms of any agreement before the agreement is approved by the coordinating agency.” Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senators Thibaudeau, Fraser and Fairley on page 6, after line 8, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Thibaudeau failed and the amendment to the striking amendment was not adopted.

MOTION

Senator Fraser moved that the following amendment by Senators Fraser and Morton to the striking amendment by Senator Morton be adopted:

On page 9, line 3, after "(1)" delete all material through "agreement." on line 6, and insert "Notwithstanding any other provision of law, any legal requirement identified under section 7(1) of this act shall be superseded or replaced in accordance with the requirements of this act and with the terms of the environmental excellence program agreement. Before entering an agreement that will supersede or replace a statute enacted by the Washington state legislature, the director shall consult with the standing committees of the house of representatives and the senate having jurisdiction over environmental quality issues." Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senators Fraser and Morton on page 9, beginning on line 3, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Fraser failed and the amendment to the striking amendment was not adopted.

MOTION

Senator Kline moved that the following amendment to the striking amendment by Senator Morton be adopted:

On page 9, beginning on line 36, delete all material through "this act." on page 11, line 8, and insert the following: "NEW SECTION. Sec. 10. (1) A by the directors of state, regional, or local agencies to approve, modify, or terminate a proposed environmental excellence program agreement or determine that a particular facility is eligible to operate under an approved programmatic environmental excellence agreement is subject to review by the pollution control hearings board pursuant to chapter 43.21B RCW. In any such review the burden of proof to show that all elements of this act have been satisfied shall be on the sponsor. (2) A decision by the directors of state, regional, or local agencies not to enter into an environmental excellence program agreement is within the sole discretion of such directors and is not subject to review." Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Kline on page 9, beginning on line 36, to the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Kline failed and the amendment to the striking amendment was not adopted.

The President declared the question before the Senate to be the adoption of the striking amendment by Senator Morton to Engrossed Second Substitute House Bill No. 1866.

The motion by Senator Morton carried and the striking amendment was adopted.

MOTIONS

On motion of Senator Morton, the following title amendment was adopted:

On page 1, line 2 of the title, after "agreements;" strike the remainder of the title and insert "amending RCW 90.54.020; adding a new section to chapter 43.21A RCW; adding a new section to chapter 70.94 RCW; adding a new section to chapter 70.95 RCW; adding a new section to chapter 70.105 RCW; adding a new section to chapter 70.119A RCW; adding a new section to chapter 75.20 RCW; adding a new section to chapter 90.48 RCW; adding a new section to chapter 90.52 RCW; adding a new section to chapter 90.58 RCW; adding a new section to chapter 90.64 RCW; adding a new section to chapter 90.71 RCW; adding a new chapter to Title 43 RCW; and creating new sections." On motion of Senator Morton, the rules were suspended, Engrossed Second Substitute House Bill No. 1866, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

POINT OF INQUIRY

Senator Swecker: “Senator Morton, because section 4(1) of the bill states that the director of a state, regional or local agency may enter into an environmental excellence program agreement with any sponsor, does this mean that a director of a state, regional or local agency may decline to enter into an Environmental Excellence Program Agreement?”

Senator Morton: “Yes, a director of a state, regional or local agency may decline to enter into an EEPA, as we abbreviated it. The EEPA has no affect on legal requirements administered and enforced by a state, regional, or local agency whose director does not enter into that EEPA. The authority of a director of a state, regional or local agency to opt not to sign the EEPA is an independent authority not restricted by the decisions of a coordinating agency or other state, regional, or local agency.”

Senator Swecker: “What effect, if any, does an EEPA have on legal requirements of environmental laws not identified in section 7(1) of the bill?”

Senator Morton: “Other than as superseded or replaced as provided in an approved environmental excellence program according to section 7(1) of this act, all legal requirements of environmental laws remain in effect and are enforceable.”

Senator Swecker: “Thank you.”

Further debate ensued.

CALL FOR THE PREVIOUS QUESTION

Senators Johnson, McDonald and Strannigan called for the previous question and the demand was sustained.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Second Substitute House Bill No. 1866, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Second Substitute House Bill No. 1866, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 30; Nays, 15; Absent, 0; Excused, 4.

Voting yea: Senators Anderson, Benton, Deccio, Finkbeiner, Goings, Hale, Hargrove, Hochstatter, Horn, Johnson, Long, Loveland, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 30. Voting nay: Senators Fairley, Franklin, Fraser, Heavey, Jacobsen, Kline, Kohl, McAuliffe, Prentice, Sheldon, Snyder, Spanel, Swanson, Thibaudeau and Wojahn - 15. Excused: Senators Bauer, Brown, Haugen and Patterson - 4. ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1866, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

There being no objection, the Senate resumed consideration of Second Substitute House Bill No. 2054, deferred earlier today after the striking amendment by Senator Morton was ruled out of order.

PARLIAMENTARY INQUIRY

Senator Kline: “Mr. President, just a point of clarification. I seem to recall that along with ruling on part eight, that is the part that no longer appears here, that there is also a ruling from the President regarding part seven on appeals, which I see is still here.”

REPLY BY THE PRESIDENT

President Owen: “The President ruled that that section, which I believe is part seven, was within the scope and object of the original bill.”

Senator Kline: “Okay. Thank you.”

EDITOR'S NOTE: In his ruling on page 1603, the President reasoned that Part VIII of the striking amendment was beyond the scope and object of the bill.

MOTION

Senator Morton moved that the following amendment be adopted:

Strike everything after the enacting clause and insert the following:"PART IBASIN PLANSNEW SECTION. Sec. 101. The purpose of this chapter is to develop a more thorough and cooperative method of determining what the current water resource situation is in each water resource inventory area of the state and to provide local citizens with the maximum possible input concerning their goals and objectives for water resource management and development. It is necessary for the legislature to establish processes and policies that will result in providing state agencies with more specific guidance to manage the water resources of the state consistent with current law and direction provided by local entities and citizens through the process established in accordance with this chapter. NEW SECTION. Sec. 102. The legislature finds that the local development of watershed plans for managing water resources and for protecting existing water rights is vital to both state and local interests. The local development of these plans serves vital local interests by placing it in the hands of people: Who have the greatest knowledge of both the resources and the aspirations of those who live and work in the watershed; and who have the greatest stake in the proper, long-term management of the resources. The development of such plans serves the state's vital interests by ensuring that the state's water resources are used wisely, by protecting existing water rights, by protecting instream flows for fish, and by providing for the economic well-being of the state's citizenry and communities. Therefore, the legislature believes it necessary for units of local government throughout the state to engage in the orderly development of these watershed plans. NEW SECTION. Sec. 103. When considering applications to appropriate public waters or the perfection, transfer, change, or cancellation of water right permits, the department shall not have discretion to take any action except in a manner consistent with the standards set forth in chapters 90.03, 90.22, 90.44, and 90.54 RCW. NEW SECTION. Sec. 104. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter. (1) "Department" means the department of ecology. (2) "WRIA" means a water resource inventory area established in chapter 173-500 WAC as it existed on January 1, 1997. (3) "Water supply utility" means a water, combined water-sewer, irrigation, reclamation, or public utility district that provides water to persons or other water users within the district or a division or unit responsible for administering a publicly governed water supply system on behalf of a city, town, or county. (4) "WRIA plan" or "plan" means the product of the planning unit including any rules adopted in conjunction with the product of the planning unit. NEW SECTION. Sec. 105. In order to have the best possible program for appropriating and administering water use in the state, the legislature establishes the following principles and criteria to carry out the purpose and intent of chapter . . ., Laws of 1997 (this act). (1) All WRIA planning units established under this chapter shall develop a process to assure that water resource user interests and directly involved interest groups at the local level have the opportunity, in a fair and equitable manner, to give input and direction to the process. (2) State agencies with major water resource management responsibilities shall be available to share information on state-wide statutorily designated interests. (3) Plans developed under chapter . . ., Laws of 1997 (this act) shall be consistent with and not duplicative of efforts already under way in a WRIA, including but not limited to watershed analysis conducted under state forest practices statutes and rules. NEW SECTION. Sec. 106. (1) Once a WRIA planning unit has been organized and designated a lead agency, it shall notify the department and may apply to the department for funding assistance for conducting the planning. Funds shall be provided from and to the extent of appropriations made by the legislature to the department expressly for this purpose. (2) Each planning unit that has complied with subsection (1) of this section is eligible to receive fifty thousand dollars for each WRIA to initiate the planning process. The department shall allocate additional funds to WRIA planning units based on demonstrated need. Each WRIA planning unit may receive up to two hundred fifty thousand dollars for each WRIA during the first two-year period of planning, with a maximum allocation of five hundred thousand dollars for each WRIA. Funding provided under this section shall be considered a contractual obligation against the moneys appropriated for this purpose. (3) Preference shall be given to planning units requesting funding for conducting multi-WRIA planning under section 109 of this act. Preference shall also be given to planning projects that are clearly intended to respond to endangered species act listings or to attempt to resolve problems that may lead to such listings or to address water availability to meet projected growth based on office of financial management twenty-year population projections. (4) The department may retain up to one percent of funds allocated under this section to defray administrative costs. NEW SECTION. Sec. 107. (1) This chapter shall not be construed as creating a new cause of action against the state or any county, city, town, water supply utility, conservation district, or planning unit. (2) Notwithstanding RCW 4.92.090, 4.96.010, and 64.40.020, no claim for damages may be filed against the state or any county, city, town, water supply utility, Indian tribes, conservation district, or planning unit that or member of a planning unit who participates in a WRIA planning unit for performing responsibilities under this chapter. The exclusion from liability contained in this subsection does not apply to a county, city, town, or water supply utility that votes to adopt provisions in a WRIA plan that have been identified by the superior court as being in conflict with state statute or federal law with regard to those provisions if advice regarding the conflict was provided under section 113(2) of this act. NEW SECTION. Sec. 108. (1)(a) Except as provided in section 109 of this act for multi-WRIA planning, the county with the largest area within the boundaries of a WRIA or a municipal corporation obtaining its water supply from the WRIA may choose to initiate water resource planning for the WRIA under this chapter. If it does so choose, it shall make application to the department of ecology to declare its intent to conduct watershed planning. Upon making application to the department, the county with the largest area within the WRIA shall convene meetings of the members of the legislative authorities of the counties with territory within a WRIA for the appointment of a WRIA planning unit. The county or municipal corporation shall also notify the cities, water supply utilities, Indian tribes, and conservation districts with territory within the WRIA that these groups are to meet to appoint their members of the WRIA planning unit. For the purposes of this section and sections 109 and 113 of this act, a county is considered to have territory within a WRIA only if the territory of the county located in the WRIA constitutes at least fifteen percent of the area of the WRIA. For conducting planning under this chapter, the county with the largest area within the boundaries of the WRIA is the lead agency for the WRIA planning, except as provided in section 109 of this act for multi-WRIA planning. When the counties of a WRIA have convened jointly to make appointments to the planning unit, they may, by a majority vote, choose as the lead agency for WRIA planning any governmental entity in the WRIA. Such a governmental entity shall act as the lead agency for this purpose if it agrees in writing to accept the designation. (b) For a WRIA located within Pierce, King, or Snohomish county, the lead agency shall be the water supply utility that is using the largest amount of water from the WRIA. (2) In a WRIA where water resource planning efforts have commenced before the effective date of this section, such as but not limited to the Kettle river WRIA, the county legislative authorities with territory within the WRIA in accordance with subsection (1) of this section may, by majority vote, choose to adopt the existing planning unit membership for purposes of planning under chapter . . ., Laws of 1997 (this act). (3)(a) One WRIA planning unit shall be appointed for the WRIA as provided by this section or for a multi-WRIA area as provided by section 109 of this act for multi-WRIA planning. The planning unit shall be composed of: (i) One member from each county with territory in the WRIA representing the county and appointed by the county; (ii) one member for each county with territory in the WRIA, but not less than two members, representing cities with territory in the WRIA and appointed jointly by those cities and incorporated towns; (iii) two members representing water supply utilities other than those of a city or town with territory within the WRIA and appointed jointly by those districts; (iv) one member representing all conservation districts with territory within the WRIA and appointed jointly by those districts; (v) three members representing various special interest groups appointed jointly by the cities with territory within the WRIA; and six members representing various special interest groups appointed jointly by the counties with territory within the WRIA; (vi) one member representing the general citizenry appointed jointly by the cities with territory within the WRIA; (vii) three members representing the general citizenry appointed jointly by the counties with territory in the WRIA, of which at least one shall be a holder of a water right certificate and at least one shall be a holder of a water right for which a statement of claim was in the state's water rights claims registry before January 1, 1997; (viii) if one or more federal Indian reservations are located in whole or in part within the boundaries of the WRIA, the planning unit shall extend an invitation to the tribal government of each reservation to appoint one member representing the tribal government; and (ix) three members representing state agencies including the secretary of the department of transportation or the secretary's designee, the director of the department of fish and wildlife or the director's designee, and the director of the department of ecology or the director's designee. The three members representing state government shall have a single vote representing state agency interests. (b) In addition, for a WRIA located within Pierce, King, or Snohomish county, one representative of the water supply utility that is the water purveyor using the largest amount of water from the WRIA shall be a voting member of the planning unit whether the principal offices of the purveyor are or are not located within the WRIA. (4) Except for a person appointed under subsection (3)(a)(ix) or (b) of this section, each person appointed to a WRIA planning unit shall have been a resident and a property owner of the WRIA for at least three years. State employees or state officials other than members appointed under subsection (3)(a)(ix) or (b) of this section may be appointed to the planning unit unless they have state water resource-related duties. In appointing persons to the WRIA planning unit representing special interest groups, the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the WRIA. Counties shall attempt to provide for a balanced group of interests on the planning unit, with emphasis given to local interests and concerns. (5)(a) In voting to appoint the members of a WRIA planning unit, to select a lead agency for water resource planning under section 108 or 109 of this act, to approve a WRIA plan under section 113 of this act, or to request or concur with a request for multi-WRIA planning under section 109 of this act, each county with territory within the WRIA shall have three votes, divided equally among the members of the county's legislative authority and these actions shall be made by majority vote based on the votes allocated under this section. In voting to appoint members of a WRIA planning unit: Each city with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such cities; each water supply utility other than those of a city or town with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts; and each conservation district with territory within the WRIA shall have one vote and appointments shall be made by majority vote of such districts. All appointments shall be made within sixty days of the date the appointing authorities other than the counties are notified to convene to make appointments or the appointments shall be made by the counties with territory in the WRIA in the same manner the counties make other appointments. (b) The local governments of the WRIA planning unit may, by majority vote, add up to two additional members representing interests that are not included in the planning unit. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership. NEW SECTION. Sec. 109. (1) The counties with territory in a WIA may elect to conduct multi-WIA planning with the counties with territory in one or more other WRIAs. If the counties with territory in these other WRIAs concur, all of the counties with territory in these WRIAs shall convene and shall appoint one planning unit to conduct the water resource planning for the multi-WIA area. (a) The planning unit shall be composed of: (i) Up to one member, as that number is determined by the counties jointly, for each county with territory in the multi-WIA area representing the counties and appointed by the counties jointly; (ii) up to one member, as that number is determined by the cities jointly, for each county with territory in the multi-WIA area, representing cities with territory in the multi-WIA area and appointed jointly by those cities; (iii) up to three members, as that number is determined by the districts, representing water supply utilities other than those of a city or town with territory within the multi-WIA area and appointed jointly by those districts; (iv) up to two members, as that number is determined by the districts, representing all conservation districts with territory within the multi-WIA area and appointed jointly by those districts; (v) three members representing various special interest groups appointed jointly by the cities with territory within the multi-WIA area; and six members representing various special interest groups appointed jointly by the counties with territory within the multi-WIA area; (vi) one member representing the general citizenry appointed jointly by the cities with territory within the multi-WIA area; (vii) three members representing the general citizenry appointed jointly by the counties with territory in the multi-WIA area, of which at least one shall be a holder of a water right certificate and at least one shall be a holder of a water right for which a statement of claim was in the state's water rights claims registry before January 1, 1997; (viii) if one or more federal Indian reservations are located in whole or in part within the boundaries of the multi-WIA area, the planning unit shall extend an invitation to the tribal government of each reservation to appoint one member representing the tribal government; and (ix) three members representing state agencies including the secretary of the department of transportation or the secretary's designee, the director of the department of fish and wildlife or the director's designee, and the director of the department of ecology or the director's designee. The three members representing state government shall have a single vote representing state agency interests. (b) In addition, for a multi-WIA planning unit located within Pierce, King, or Snohomish county, one representative of the water purveyor using the largest amount of water from the multi-WIA area shall be a voting member of the planning unit whether the principal offices of the purveyor are or are not located within the multi-WIA area. (c) Except for a person appointed under (a)(ix) or (b) of this subsection, each person appointed to a multi-WIA planning unit shall have been a resident and property owner within the multi-WIA area for at least three years. State employees or state officials other than members appointed under subsection (a)(ix) or (b) of this subsection may be appointed to the planning unit unless they have state water resource-related duties. In appointing persons to the multi-WIA planning unit representing special interest groups the counties shall consider industrial water users, general businesses, hydroelectric and thermal power producers, and irrigated agriculture, nonirrigated agriculture, forestry, recreation, environmental, and fisheries interest groups and other groups with interests in the multi-WIA area. Counties shall attempt to provide for a balanced group of interests on the planning unit, with emphasis given to local interests and concerns. (2) In a multi-WIA area where water resource planning efforts have commenced before the effective date of this section, such as but not limited to the Kettle river WIA, the county legislative authorities with territory within the WIA in accordance with subsection (1) of this section may, by majority vote, choose to adopt the existing planning unit membership for purposes of planning under chapter . . ., Laws of 1997 (this act). (3)(a) The counties in the multi-WIA area shall select, by a majority vote, a governmental entity in the multi-WIA area to act as lead agency for water resource planning in the multi-WIA area under this chapter. Such an entity shall serve as the lead agency if it agrees in writing to do so. All appointments shall be made within sixty days of the date the lead agency in the multi-WIA area notifies the other appointing authorities to convene to make appointments or the appointments shall be made by the counties with territory in the multi-WIA area in the same manner the counties make other appointments. (b) The local governments of the WIA planning unit may, by majority vote, add up to two additional members representing interests that are not included in the planning unit. (c) A vacancy on the planning unit shall be filled by appointment in the same manner prescribed for appointing the position that has become vacant. The planning unit shall convene and begin work as soon as two-thirds of the number of persons eligible to be members of the planning unit have been appointed. All positions must be filled within thirty days of the convening of the planning unit. The unit shall not interrupt its work to await additional original appointments or appointments to fill any vacancies that may occur in its membership. (4) A planning unit for a multi-WIA area shall perform all of the functions assigned by this chapter to a WIA planning unit and is subject to all of the provisions of this chapter that apply to a WIA planning unit. NEW SECTION. Sec. 110. The lead agency shall provide staff support from resources provided for planning under chapter . . ., Laws of 1997 (this act) for the work of the WIA planning unit. Each WIA planning unit may establish its own methods of operation that are consistent with this chapter and may establish methods for reviewing the operations of its lead agency. No planning unit appointed or selected under this chapter may possess or exercise the power of eminent domain. No planning unit appointed or selected under this chapter may take any action that affects in any manner a general adjudication proceeding for water rights, completed or ongoing. Each WIA planning unit is encouraged to: Consider information and plans that may have been previously developed by other entities in establishing water resource management plans for the WIA; consider existing data regarding water resources in the WIA; and, for a WIA that borders another state, cooperate with local government counterparts in the adjacent state regarding water resource planning. Water resource plans developed under this chapter for a WIA may not interfere in any manner with a general adjudication of water rights, completed or ongoing. Such a WIA plan may not in any manner impair, diminish, or interfere with a water right that exists before the adoption of the plan by the department under section 113 of this act. All meetings of a WIA planning unit shall be conducted as public meetings as required for such meetings by the open public meetings act, chapter 42.30 RCW. Some time shall be set aside at the end of each meeting of a WIA planning unit for public comments. Each planning unit shall establish procedures to be followed by the unit in making decisions. The objective to be sought by the planning unit in making decisions is to reach consensus among its members on the decisions. Decisions by a two-thirds majority vote may be used if the unit has found that attempts at achieving consensus have not been successful. No person who is a member of a WIA planning unit may designate another to act on behalf of the person as a member or to attend as a member a meeting of the unit on behalf of the person. If a member of a WIA planning unit is absent from more than five meetings of the WIA planning unit that constitute twenty percent or more of the meetings that have been conducted by the planning unit while the person is a member of the unit and these absences have not been excused as provided by this section, the member's position on the WIA planning unit is to be considered vacant. A person's absence from a meeting may be excused: By the chair of the planning unit if a written request to do so is received by the chair before the meeting from which the member is to be absent; or by a majority vote of the members of the planning unit at the meeting during which the member is absent. NEW SECTION. Sec. 111. (1) Each WIA planning unit shall develop a water resource plan. The plan must address the elements listed in subsection (2) of this section and may include other elements added by the planning unit. Once organized, the first task of the planning unit is to prioritize these elements regarding their importance in the WIA and in developing a water resource plan for the WIA. A plan shall not be developed such that its provisions are in conflict with state statute or federal law or impair, diminish, or interfere in any manner with a water right existing prior to its adoption or with the construction, operation, or maintenance of a federal reclamation project or an instream flow requirement or condition established for hydroelectric power project licensed under the federal power act. No aspect of the plan may establish standards for water quality or regulate water quality in any manner whatsoever. (2) The plan must include the following: (a) An assessment of water supply and use in the WIA, including: (i) A quantitative estimation of the amount of surface and ground water present in the planning unit, using United States geological survey information and other existing sources of information; (ii) A quantitative estimation using existing sources of information, of the amount of precipitation and surface and ground water available, using currently available or likely available technologies, collectively for both current and future water uses, including for instream purposes and for withdrawal or diversion; (iii) A quantitative estimation using existing sources of information, of the amount of surface and ground water actually being used, and the months of peak and minimum use, both in-stream and by withdrawal, for agricultural, industrial, fisheries, recreational, environmental, municipal, and residential purposes, and including amounts claimed, permitted, or certificated for future municipal needs; and (iv) A quantitative estimation of the amount of water, approximately, that is represented by amounts in claims in the water rights claims registry, in water use permits, in certificated rights, and in rules establishing instream flows; (b) A quantitative description of future water-based instream and out-of-stream needs in the planning unit, based on projected population and agricultural and other economic growth. That is, an identification of the water needed collectively for use for agricultural, fisheries, recreational, environmental, industrial, municipal, and residential purposes. If a federal reclamation project is providing water for reclamation purposes within the WIA or multi-WIA area, federal reclamation water use requirements shall be those for project lands within the WIA or multi-WIA area; (c) Instream flows. (i) Except for the main stem of the Columbia river or the main stem of the Snake river, a planning unit may propose instream flow levels as part of its plan for other rivers and streams in its WIA or multi-WIA area. (ii) The planning unit, by unanimous recorded vote of all voting members, may set specific instream flow levels, and such flow levels shall be adopted by rule of the department. (iii) If the planning unit is unable to approve specific instream flow levels unanimously, such levels may be submitted as a recommended instream flow in the WIA plan for consideration by the department. Such recommendations must be approved by a two-thirds majority vote of the voting members of the planning unit. (iv) Instream flow levels proposed under this subsection may not conflict with flow requirements or conditions in effect under a license issued under the federal power act. (v) The planning unit may propose adjustments to instream flow levels that have been set by the state before the adoption of the planning unit's plan and will propose instream flow levels as part of the plan for the other rivers, streams, and lakes for which it determines the establishment of flows or levels to be appropriate in the WIA, or in the multi-WIA area for multi-WIA planning under section 109 of this act. (vi) The planning unit, by unanimous recorded vote of all voting members, may adjust established instream flow levels, and such flow levels shall be adopted by rule of the department. (vii) If the planning unit is unable to approve such adjustments unanimously, such levels may be submitted as a recommended adjustment to established instream flows in the WIA plan for consideration by the department. Such recommendations must be approved by a two-thirds majority vote of the voting members of the planning unit. (viii) An instream flow or base flow or level set for a body of water in a WIA plan adopted by the department under section 113 of this act supersedes any other such flow or level previously established for the body of water; (d) A quantitative description of the ground water and of the surface water available for further appropriation including water that may be obtained through reuse. As used in this subsection (2)(d), "available" means available on the date the plan takes effect as a rule under section 113 of this act; (e) An identification of known areas that provide for the recharge of aquifers from the surface and areas where aquifers recharge surface bodies of water; (f) Strategies for increasing water supplies in the WIA, including: (i) Water conservation and reuse measures; and (ii) Storage enhancements, including modifications to existing reservoirs, new reservoirs, and underground storage. Any quantity of water made available under these strategies is a quantity that is in addition to the water declared available for appropriation under (d) of this subsection; and (g) An identification of areas where voluntary water-related habitat improvement projects or voluntary transactions providing for the purchase of water-related habitat or water-related habitat easements would provide the greatest benefit to habitat in the WIA, and a prioritization of the areas based on their potential for providing such benefits. The purpose of this element of the plan is to provide a means of coordinating nonregulatory, voluntary efforts for improving water-related habitat in the WIA. (3) Upon request the department shall assist the planning unit in drafting proposed implementing rules for the elements of the plan over which the department has authority. The draft rules shall accompany the plan as it is reviewed under the provisions of this chapter. (4) A plan shall not be developed under this chapter to require directly or indirectly the implementation of laws, rules, or programs that are designed primarily to control water pollution or discharges of pollutants to water, to regulate effluent discharges or wastewater treatment systems or facilities, or to establish or require the achievement of water quality standards, including but not limited to chapter 90.48 RCW and rules adopted under chapter 90.48 RCW, the national pollutant discharge elimination system permit program, and the state waste discharge permit program. NEW SECTION. Sec. 112. (1) Water resource management plans developed pursuant to the process in this chapter and subsequently adopted by the department under section 113 of this act are presumed valid. This presumption shall apply in any petition or action filed against a plan. (2) Any action taken by a state agency regarding or affecting water resources within a WIA for which a plan has been adopted under section 113 of this act and any planning conducted by a state agency regarding or affecting water resources within a WIA for which a plan has been adopted under section 113 of this act shall be taken or conducted in a manner that is consistent with the plan. All actions and decisions of the department regarding water resources in the WIA shall be consistent with and based upon such an adopted plan for the WIA. Any other authority of the department exercised within the WIA regarding or affecting water resources shall be exercised in a manner that is consistent with such an adopted plan. NEW SECTION. Sec. 113. (1) Upon completing a proposed water resource plan for the WIA, the WIA planning unit shall publish notice of and conduct at least one public hearing in the WIA on the proposed plan. The planning unit shall take care to provide notice of the hearing throughout the WIA or multi-WIA area. As a minimum, it shall publish a notice of the hearing in one or more newspapers of general circulation in the WIA or multi-WIA area. After considering the public comments presented at the hearing or hearings, the planning unit shall submit a copy of its proposed plan to the department and to the tribal council of each reservation with territory within the WIA. (2)(a) The department shall provide advice as to any specific subsections or sections of the plan that the department believes to be in conflict with state statute or federal law and may provide other recommendations regarding the plan. The department shall transmit its advice and recommendations regarding the plan to the WIA planning unit within sixty days of receiving it for review. (b) The tribal council may review and provide comments and recommendations to the planning unit within sixty days of the receipt of the plan. (3) The WIA planning unit shall consider each recommendation provided under subsection (2) of this section. The planning unit may adopt such a recommendation or provide changes to respond to the advice of the department and the tribal council by a two-thirds majority vote of the members of the planning unit. The WIA planning unit shall approve a water resource plan for the WIA by a two-thirds majority vote of the members of the planning unit. An approved plan shall be submitted to the counties with territory within the WIA for adoption. If a WIA planning unit receives funding for WIA or multi-WIA planning under section 106 of this act and does not approve a plan for submission to the counties within four years of the date the planning unit receives the first of that funding from the department for the planning, the department shall develop and adopt a water resource plan for the WIA or multi-WIA area. (4) The legislative authority of each of the counties with territory within the WIA shall provide public notice for and conduct at least one public hearing on the WIA plan submitted to the county under this section. The counties shall take care to provide notice of the hearings throughout the WIA or multi-WIA area. As a minimum, they shall publish a notice of the hearings in one or more newspapers of general circulation in the WIA or multi-WIA area. After the public hearings, the legislative authorities of these counties shall convene in joint session to consider the plan. The counties may approve or reject the plan, but may not amend the plan. Approval of a plan, or of recommendations for a plan that is not approved, shall be made by a majority vote of the members of the various legislative authorities of the counties with territory in the WIA based on the votes allocated under section 108 of this act. If the plan is not approved, it shall be returned to the WIA planning unit with recommendations for revisions. Any revised plan and implementing rules prepared by the planning unit shall be submitted to the department and to the counties as provided by this section for WIA water resource plans generally. (5) If the plan is approved by the members of the legislative authorities, the plan shall be transmitted to the department for adoption. The department shall adopt such an approved WIA water resource plan by rule. The department has no discretion to amend or reject the plan except as provided in section 111(2)(c) (iii) or (vii) of this act. A copy of the plan and notice of its adoption as rules shall be published in the state register under chapter 34.05 RCW. The public hearing required by chapter 34.05 RCW shall be deemed to have been satisfied by public hearings held by county legislative authorities. (6) If the department finds that an element of a WIA plan is in conflict with state statute or federal law and the unit does not remove the conflict created by the element from its plan, the state is not liable for any judgment that may be awarded regarding the conflict. The department may file a petition for declaratory judgment in the superior court to determine whether the element is or is not in conflict with state statute or federal law. The petition shall be filed in the superior court in the county with the largest area in the WIA or multi-WIA area governed by the plan. The counties that approved the plan shall be named as parties to the proceeding. The superior court shall review the potential conflict under the error of law standard. If the superior court finds that an element of the plan is in conflict with state statute or federal law, that element of the plan shall be invalid. Decisions on such petitions are reviewable as in other civil cases. This subsection shall not be construed as establishing such state liability for any other element of the plan adopted as rules. NEW SECTION. Sec. 114. The WIA planning units may accept grants, funds, and other financing, as well as enter into cooperative agreements with private and public entities for planning assistance and funding. NEW SECTION. Sec. 115. A new section is added to chapter 90.03 RCW to read as follows: (1) The department shall rule in a timely manner upon complete applications to appropriate public surface and ground water. For complete applications that seek to appropriate water from within a WIA for which a WIA plan has been adopted, the department shall grant or deny the application within one hundred eighty days of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. For applications filed after July 1, 1999, that seek to appropriate water from within a WIA for which no WIA plan has been adopted, the department shall grant or deny the application within one year of the date the properly completed application is filed with the department, except as provided in subsection (2) of this section. The times allowed in this section to rule upon an application shall not include the time it takes the applicant to respond to an explicit request for additional information reasonably required to make a determination on the application. The department shall be allowed only one such request for additional information. The cost of obtaining such information shall be reasonable in relation to the quantity and value of the water right applied for. Once the applicant responds to an information request, the stay of the time allowed for the permit decision shall end. (2) If a detailed statement, generally referred to as an environmental impact statement, must be prepared under chapter 43.21C RCW for or in regard to an application to appropriate water, the department shall grant or deny the application within ninety days of the date the final environmental impact statement is available from the official responsible for it under chapter 43.21C RCW. NEW SECTION. Sec. 116. A new section is added to chapter 34.05 RCW to read as follows: (1) Once the department of ecology receives a water resource plan submitted by a WIA planning unit for advice and recommendations under section 113 of this act, the department shall conduct at least one public hearing on the plan and shall provide notice of the hearing and proposed plan as provided in RCW 34.05.320 for the proposal of a rule. The department shall maintain a file for the plan. Once the plan has been adopted by the counties in the WIA under section 113 of this act and the plan has been submitted to the department of ecology, the department shall file the plan with the code reviser along with an order adopting the plan as rules. The code reviser shall cause the order and the water resource plan to be published in the Washington state register in the manner provided for the adoption of final rules and shall incorporate the plan into the Washington Administrative Code. No other aspect of this chapter that establishes procedures for the adoption of rules applies to the adoption of the plan by the department. (2) For the purposes of this section, "WIA" has the meaning established in section 104 of this act. Sec. 117. RCW 90.54.040 and 1997 c ... s 2 (Senate Bill 5029) are each amended to read as follows: (1) Consistent with chapter . . ., Laws of 1997 (this act) the department, through the adoption of appropriate rules, is directed, as a matter of high priority to insure that the waters of the state are utilized for the best interests of the people, to develop and implement in accordance with the policies of this chapter a comprehensive state water resources program which will provide a process for making decisions on future water resource allocation and use. The department may develop the program in segments so that immediate attention may be given to waters of a given physioeconomic region of the state or to specific critical problems of water allocation and use. (2) In relation to the management and regulatory programs relating to water resources vested in it, the department is further directed to modify existing regulations and adopt new regulations, when needed and possible, to insure that existing regulatory programs are in accord with the water resource policy of this chapter and the program established in subsection (1) of this section. (3) The department is directed to review all statutes relating to water resources which it is responsible for implementing. When any of the same appear to the department to be ambiguous, unclear, unworkable, unnecessary, or otherwise deficient, it shall make recommendations to the legislature including appropriate proposals for statutory modifications or additions. Whenever it appears that the policies of any such statutes are in conflict with the policies of this chapter, and the department is unable to fully perform as provided in subsection (2) of this section, the department is directed to submit statutory modifications to the legislature which, if enacted, would allow the department to carry out such statutes in harmony with this chapter.

PART IISTORAGE Sec. 201. RCW 90.54.020 and 1989 c 348 s 1 are each amended to read as follows: Utilization and management of the waters of the state shall be guided by the following general declaration of fundamentals: (1) Uses of water for domestic, stock watering, industrial, commercial, agricultural, irrigation, hydroelectric power production, mining, fish and wildlife maintenance and enhancement, recreational, and thermal power production purposes, and preservation of environmental and aesthetic values, and all other uses compatible with the enjoyment of the public waters of the state, are declared to be beneficial. (2) Allocation of waters among potential uses and users shall be based generally on the securing of the maximum net benefits for the people of the state. Maximum net benefits shall constitute total benefits less costs including opportunities lost. (3) The quality of the natural environment shall be protected and, where possible, enhanced as follows: (a) Perennial rivers and streams of the state shall be retained with base flows necessary to provide for preservation of wildlife, fish, scenic, aesthetic and other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served. (b) Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served. Technology-based effluent limitations or standards for discharges for municipal water treatment plants located on the Chehalis, Columbia, Cowlitz, Lewis, or Skagit river shall be adjusted to reflect credit for substances removed from the plant intake water if: (i) The municipality demonstrates that the intake water is drawn from the same body of water into which the discharge is made; and (ii) The municipality demonstrates that no violation of receiving water quality standards or appreciable environmental degradation will result. (4) The development of multipurpose water storage facilities shall be a high priority for programs of water allocation, planning, management, and efficiency. The department, other state agencies, local governments, and planning units formed under section 108 or 109 of this act shall evaluate the potential for the development of new storage projects and the benefits and effects of storage in reducing damage to stream banks and property, increasing the use of land, providing water for municipal, industrial, agricultural, power generation, and other beneficial uses, and improving stream flow regimes for fisheries and other instream uses. (5) Adequate and safe supplies of water shall be preserved and protected in potable condition to satisfy human domestic needs. (((5))) (6) Multiple-purpose impoundment structures are to be preferred over single-purpose structures. Due regard shall be given to means and methods for protection of fishery resources in the planning for and construction of water impoundment structures and other artificial obstructions. (((6))) (7) Federal, state, and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out practices of conservation as they relate to the use of the waters of the state. In addition to traditional development approaches, improved water use efficiency and conservation shall be emphasized in the management of the state's water resources and in some cases will be a potential new source of water with which to meet future needs throughout the state. (((7))) (8) Development of water supply systems, whether publicly or privately owned, which provide water to the public generally in regional areas within the state shall be encouraged. Development of water supply systems for multiple domestic use which will not serve the public generally shall be discouraged where water supplies are available from water systems serving the public. (((8))) (9) Full recognition shall be given in the administration of water allocation and use programs to the natural interrelationships of surface and ground waters. (((9))) (10) Expressions of the public interest will be sought at all stages of water planning and allocation discussions. (((10))) (11) Water management programs, including but not limited to, water quality, flood control, drainage, erosion control and storm runoff are deemed to be in the public interest. Sec. 202. RCW 90.54.180 and 1989 c 348 s 5 are each amended to read as follows: Consistent with the fundamentals of water resource policy set forth in this chapter, state and local governments, individuals, corporations, groups and other entities shall be encouraged to carry out water use efficiency and conservation programs and practices consistent with the following: (1) Water efficiency and conservation programs should utilize an appropriate mix of economic incentives, cost share programs, regulatory programs, and technical and public information efforts. Programs which encourage voluntary participation are preferred. (2) Increased water use efficiency should receive consideration as a potential source of water in state and local water resource planning processes. In determining the cost-effectiveness of alternative water sources, consideration should be given to the benefits of conservation, including waste water recycling, and ((impoundment)) storage of waters. (3) In determining the cost-effectiveness of alternative water sources, full consideration should be given to the benefits of storage which can reduce the damage to stream banks and property, increase the utilization of land, provide water for municipal, industrial, agricultural, and other beneficial uses, provide for the generation of electric power from renewable resources, and improve stream flow regimes for fishery and other instream uses. (4) Entities receiving state financial assistance for construction of water source expansion or acquisition of new sources shall develop, and implement if cost-effective, a water use efficiency and conservation element of a water supply plan pursuant to RCW 43.20.230(1). (5) State programs to improve water use efficiency should focus on those areas of the state in which water is overappropriated; areas that experience diminished streamflows or aquifer levels; and areas where projected water needs, including those for instream flows, exceed available supplies. (6) Existing and future generations of citizens of the state of Washington should be made aware of the importance of the state's water resources and the need for wise and efficient use and development of this vital resource. In order to increase this awareness, state agencies should integrate public education on increasing water use efficiency into existing public information efforts. This effort shall be coordinated with other levels of government, including local governments and Indian tribes.PART IIIGENERAL ADJUDICATIONS

NEW SECTION. Sec. 301. A new section is added to chapter 90.03 RCW to read as follows: The legislature finds that the lack of certainty regarding water rights within a water resource basin may impede management and planning for water resources. The legislature further finds that planning units conducting water resource planning under chapter 90.-- RCW (sections 101 through 114 of this act) may find that the certainty provided by a general adjudication of water rights under this chapter is required for water planning or water management in a water resource inventory area or in a portion of the area. Therefore, such planning units may petition the department to conduct such a general adjudication and the department shall give high priority to such a request in initiating any such general adjudications under this chapter.

PART IVWATER PURVEYORS

Sec. 401. RCW 90.03.383 and 1991 c 350 s 1 are each amended to read as follows: (1) The legislature recognizes the value of interties for improving the reliability of public water systems, enhancing their management, and more efficiently utilizing the increasingly limited resource. Given the continued growth in the most populous areas of the state, the increased complexity of public water supply management, and the trend toward regional planning and regional solutions to resource issues, interconnections of public water systems through interties provide a valuable tool to ensure reliable public water supplies for the citizens of the state. Public water systems have been encouraged in the past to utilize interties to achieve public health and resource management objectives. The legislature finds that it is in the public interest to recognize interties existing and in use as of January 1, 1991, and to have associated water rights modified by the department of ecology to reflect current use of water through those interties, pursuant to subsection (3) of this section. The legislature further finds it in the public interest to develop a coordinated process to review proposals for interties commencing use after January 1, 1991. (2) For the purposes of this section, the following definitions shall apply: (a) "Interties" are interconnections between public water systems permitting exchange, acquisition, or delivery of wholesale and/or retail water between those systems for other than emergency supply purposes, where such exchange, acquisition, or delivery is within established instantaneous and annual withdrawal rates specified in the systems' existing water right permits or certificates, or contained in claims filed pursuant to chapter 90.14 RCW, and which results in better management of public water supply consistent with existing rights and obligations. Interties include interconnections between public water systems permitting exchange, acquisition, or delivery of water to serve as primary or secondary sources of supply((, but do not include development of new sources of supply to meet future demand)) and the development of new sources of supply to meet future demands if the water system or systems receiving water through such an intertie make efficient use of existing sources of water supply and the provision of water through such an intertie is consistent with local land use plans. For this purpose, a system's full compliance with the state department of health's conservation guidelines for such systems is deemed efficient use. (b) "Service area" is the area designated as the wholesale and/or retail area in a water system plan or a coordinated water system plan pursuant to chapter 43.20 or 70.116 RCW respectively. When a public water system does not have a designated service area subject to the approval process of those chapters, the service area shall be the designated place of use contained in the water right permit or certificate, or contained in the claim filed pursuant to chapter 90.14 RCW. (3)(a) Public water systems with interties existing and in use as of January 1, 1991, or that have received written approval from the department of health prior to that date, shall file written notice of those interties with the department of health and the department of ecology. The notice may be incorporated into the public water system's five-year update of its water system plan, but shall be filed no later than June 30, 1996. The notice shall identify the location of the intertie; the dates of its first use; the purpose, capacity, and current use; the intertie agreement of the parties and the service areas assigned; and other information reasonably necessary to modify the public water system's water right ((permit)). Notwithstanding the provisions of RCW 90.03.380 and 90.44.100, for public water systems with interties existing and in use or with written approval as of January 1, 1991, the department of ecology, upon receipt of notice meeting the requirements of this subsection, shall, as soon as practicable, modify the place of use descriptions in the water right permits, certificates, or claims to reflect the actual use through such interties, provided that the place of use is within service area designations established in a water system plan approved pursuant to chapter 43.20 RCW, or a coordinated water system plan approved pursuant to chapter 70.116 RCW, and further provided that the water used is within the instantaneous and annual withdrawal rates specified in the water rights ((permit)) and that no outstanding complaints of impairment to existing water rights have been filed with the department of ecology prior to September 1, 1991. Where such complaints of impairment have been received, the department of ecology shall make all reasonable efforts to resolve them in a timely manner through agreement of the parties or through available administrative remedies. (b) An intertie meeting the requirements of this subsection (3) for modifying the place of use description in a water right permit, certificate, or claim may be used to its full design or built capacity within the most recently approved retail or wholesale or retail and wholesale service area, without further approval under this section and without regard to the capacity actually used before January 1, 1991. (4) Notwithstanding the provisions of RCW 90.03.380 and 90.44.100, exchange, acquisition, or delivery of water through interties approved by the department of health commencing use after January 1, 1991, shall be permitted when the intertie improves overall system reliability, enhances the manageability of the systems, provides opportunities for conjunctive use, or delays or avoids the need to develop new water sources, and otherwise meets the requirements of this section, provided that each public water system's water use shall not exceed the instantaneous or annual withdrawal rate specified in its water right authorization, shall not adversely affect existing water rights, and shall not be inconsistent with state-approved plans such as water system plans or other plans which include specific proposals for construction of interfiles. Interfiles approved and commencing use after January 1, 1991, shall not be inconsistent with regional water resource plans developed pursuant to chapter 90.54 RCW or chapter 90.-- RCW (sections 101 through 114 of this act). (5) For public water systems subject to the approval process of chapter 43.20 RCW or chapter 70.116 RCW, proposals for interfiles commencing use after January 1, 1991, shall be incorporated into water system plans pursuant to chapter 43.20 RCW or coordinated water system plans pursuant to chapter 70.116 RCW and submitted to the department of health and the department of ecology for review and approval as provided for in subsections (5) through (9) of this section. The plan shall state how the proposed inertia will improve overall system reliability, enhance the manageability of the systems, provide opportunities for conjunctive use, or delay or avoid the need to develop new water sources. (6) The department of health shall be responsible for review and approval of proposals for new interfiles. In its review the department of health shall determine whether the inertia satisfies the criteria of subsection (4) of this section, with the exception of water rights considerations, which are the responsibility of the department of ecology, and shall determine whether the inertia is necessary to address emergent public health or safety concerns associated with public water supply. (7) If the inertia is determined by the department of health to be necessary to address emergent public health or safety concerns associated with public water supply, the public water system shall amend its water system plan as required and shall file an application with the department of ecology to change its existing water right to reflect the proposed use of the water as described in the approved water system plan. The department of ecology shall process the application for change pursuant to RCW 90.03.380 or 90.44.100 as appropriate, except that, notwithstanding the requirements of those sections regarding notice and protest periods, applicants shall be required to publish notice one time, and the comment period shall be fifteen days from the date of publication of the notice. Within sixty days of receiving the application, the department of ecology shall issue findings and advise the department of health if existing water rights are determined to be adversely affected. If no determination is provided by the department of ecology within the sixty-day period, the department of health shall proceed as if existing rights are not adversely affected by the proposed inertia. The department of ecology may obtain an extension of the sixty-day period by submitting written notice to the department of health and to the applicant indicating a definite date by which its determination will be made. No additional extensions shall be granted, and in no event shall the total review period for the department of ecology exceed one hundred eighty days. (8) If the department of health determines the proposed intertie appears to meet the requirements of subsection (4) of this section but is not necessary to address emergent public health or safety concerns associated with public water supply, the department of health shall instruct the applicant to submit to the department of ecology an application for change to the underlying water right or claim as necessary to reflect the new place of use. The department of ecology shall consider the applications pursuant to the provisions of RCW 90.03.380 and 90.44.100 as appropriate. The department of ecology shall not deny or limit a change of place of use for an intertie on the grounds that the holder of a permit has not yet put all of the water authorized in the permit to beneficial use. If in its review of proposed interties and associated water rights the department of ecology determines that additional information is required to act on the application, the department may request applicants to provide information necessary for its decision, consistent with agency rules and written guidelines. Parties disagreeing with the decision of the department of ecology ((on)) to approve or deny the application for change in place of use may appeal the decision to the pollution control hearings board. (9) The department of health may approve plans containing intertie proposals prior to the department of ecology's decision on the water right application for change in place of use. However, notwithstanding such approval, construction work on the intertie shall not begin until the department of ecology issues the appropriate water right document to the applicant consistent with the approved plan. (10) The 1997 amendments to this section in this act are null and void if any one of sections 101 through 116 of this act is vetoed by June 30, 1997. Sec. 402. RCW 90.03.330 and 1987 c 109 s 89 are each amended to read as follows: (1) Upon a showing satisfactory to the department that any appropriation has been perfected in accordance with the provisions of this chapter, it shall be the duty of the department to issue to the applicant a certificate stating such facts in a form to be prescribed by him, and such certificate shall thereupon be recorded with the department. Any original water right certificate issued, as provided by this chapter, shall be recorded with the department and thereafter, at the expense of the party receiving the same, be by the department transmitted to the county auditor of the county or counties where the distributing system or any part thereof is located, and be recorded in the office of such county auditor, and thereafter be transmitted to the owner thereof. (2) If a public water system is providing water for municipal supply purposes under a certificated water right, the instantaneous and annual withdrawal rates specified in the certificate are deemed valid and perfected. (3) If a federal reclamation project is providing water for reclamation purposes under a certificated water right, the instantaneous and annual withdrawal rates specified in the certificate are deemed valid and perfected. (4) If an irrigation district is providing water for the purposes authorized by chapter 87.03 RCW under a certificated water right, the instantaneous and annual withdrawal rates specified in the certificate are deemed valid and perfected. (5) The 1997 amendments to this section in this act are null and void if any one of sections 101 through 116 of this act is vetoed by June 30, 1997.

PART VRELINQUISHMENT Sec. 501. RCW 90.14.140 and 1987 c 125 s 1 are each amended to read as follows: (1) For the purposes of RCW 90.14.130 through 90.14.180, "sufficient cause" shall be defined as the nonuse of all or a portion of the water by the owner of a water right for a period of five or more consecutive years where such nonuse occurs as a result of: (a) Drought, or other unavailability of water; (b) Active service in the armed forces of the United States during military crisis; (c) Nonvoluntary service in the armed forces of the United States; (d) The operation of legal proceedings; (e) Federal laws imposing land or water use restrictions either directly or through the voluntary enrollment of a landowner in a federal program implementing those laws, or acreage limitations, or production quotas; (f) An elapse of time occurring while a request or application is processed for transferring or changing a water right to use by a public water supplier for municipal purposes; (g) The implementation of practices or technologies or the installation or repair of facilities, including but not limited to water conveyance practices, technologies, or facilities, that are more efficient or more water use efficient than practices, technologies, or facilities previously used under the water right. (2) Notwithstanding any other provisions of RCW 90.14.130 through 90.14.180, there shall be no relinquishment of any water right: (a) If such right is claimed for power development purposes under chapter 90.16 RCW and annual license fees are paid in accordance with chapter 90.16 RCW, or (b) If such right is used for a standby or reserve water supply to be used in time of drought or other low flow period so long as withdrawal or diversion facilities are maintained in good operating condition for the use of such reserve or standby water supply, or (c) If such right is claimed for a determined future development to take place ((either)) at any time within fifteen years of either July 1, 1967, or the most recent beneficial use of the water right, whichever date is later, or (d) If such right is claimed for municipal water supply purposes under chapter 90.03 RCW, or (e) If such waters are not subject to appropriation under the applicable provisions of RCW 90.40.030 as now or hereafter amended.PART VIGENERAL PERMITSNEW SECTION. Sec. 601. The legislature finds that the present delay in the processing of water right applications is not beneficial to the citizens of the state nor is it in keeping with the goal of managing the resource to the highest possible standard and maximum net benefit. The legislature further finds that water conservation efforts would be greatly enhanced by a permit system that encourages water right applicants to use only the amount of water actually necessary to meet their needs. NEW SECTION. Sec. 602. A new section is added to chapter 90.03 RCW to read as follows: (1) The department shall develop a general permit system for appropriating water for nonconsumptive, nonbypass uses. This system must be designed and used to accurately identify and register any water right application that qualifies for the streamlined process of appropriation of water by meeting the requirements in this section and registering the use. The general permit system must be applicable state-wide, and all waters of the state shall be eligible for coverage under the system. The evaluation and report required for an application under RCW 90.03.290 are not required for applications processed under the general permit system. For the purposes of this section: (a) "Nonconsumptive, nonbypass use" means a use of water in which water is diverted from a stream or drawn from an aquifer and following its use is discharged back into or near the point of diversion or withdrawal without diminishment in quality and less than five thousand gallons of net consumption per day; and (b) "Without diminishment of quality" means that, before being discharged back to its source, the water being discharged meets state water quality standards adopted under chapter 90.48 RCW. (2) The department shall, by January 1, 1998, establish the general permit system by adopting rules in accordance with chapter 34.05 RCW. Before the adoption of rules for a system, the department shall consult with representatives of the following interest groups: Agriculture; aquaculture; home construction and development; county government; city government; surface mining; and the environmental community. At least four public hearings must be held at various locations around the state, not less than two of which shall be east of the crest of the Cascade mountains. The rules must identify criteria for proposed uses of water for which applications might be processed under the system and must establish procedures for filing and processing applications and issuing water rights certificates under the general permit system. NEW SECTION. Sec. 603. A new section is added to chapter 90.03 RCW to read as follows: An application for registration as a nonconsumptive, nonbypass water user under the general permit system established under section 602 of this act must be made on a form adopted and provided by the department. Within sixty days of receipt of a properly completed application, the department shall determine whether the proposed use is eligible to be processed under the general permit system. If the department determines that the proposed use is eligible to be processed under the system, the application must be processed under the system within the next sixty days. The priority date of the water right established pursuant to this section shall be the date that the properly completed application is submitted. If the department determines that the proposed use is not eligible for the processing, the department shall explain to the applicant in writing the reasons for its determination. For a proposed use determined ineligible for the processing, if the department finds that the information contained on the application form substantially satisfies the information requirements for an application for a use that would normally be filed for processing the application outside of the general permit system, the department shall notify the applicant of its finding and shall process the application as if it were filed for processing outside of the system. If the department finds that the information does not substantially satisfy the requirements, the application must be considered to be incomplete for the processing and the applicant must be notified of this consideration. NEW SECTION. Sec. 604. A new section is added to chapter 90.03 RCW to read as follows: Nothing in sections 602 and 603 of this act authorizes the impairment or operates to impair any existing water rights. A water right holder under sections 602 and 603 of this act shall not make withdrawals that impair a senior water right. A holder of a senior water right who believes his or her water right is impaired may file a complaint with the department of ecology. Where such complaints of impairment have been received, the department of ecology shall make all reasonable efforts to resolve them in a timely manner through agreement of the parties. Nothing in section 602 or 603 of this act may be construed as waiving any requirement established under chapter 90.48 RCW or federal law that a permittee secure a discharge permit regarding water quality. NEW SECTION. Sec. 605. If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 1997, in the omnibus appropriations act, this act is null and void. PART VIIAPPEALS NEW SECTION. Sec. 701. The legislature recognizes that in many cases the value of real property directly depends upon the amount of water that is available for use on that property. The legislature also recognizes that water rights are a type of property right in which many different parties may assert an interest. Current statutes require many property rights actions in which different parties assert interests, such as actions for partition or eminent domain, to be filed in superior court. The legislature further finds that informal procedures such as mediation and fact finding have been employed successfully in other areas of the law, and may produce positive results in certain types of water disputes. The legislature therefore finds that property owners should have a choice to select informal or formal hearings before the pollution control hearings board, and that relinquishment proceedings should be appealed to the local superior courts. Sec. 702. RCW 34.05.514 and 1995 c 347 s 113 and 1995 c 292 s 9 are each reenacted and amended to read as follows: (1) Except as provided in subsections (2) and (3) of this section, proceedings for review under this chapter shall be instituted by paying the fee required under RCW 36.18.020 and filing a petition in the superior court, at the petitioner's option, for (a) Thurston county, (b) the county of the petitioner's residence or principal place of business, or (c) in any county where the property owned by the petitioner and affected by the contested decision is located. (2) For proceedings involving institutions of higher education, the petition shall be filed either in the county in which the principal office of the institution involved is located or in the county of a branch campus if the action involves such branch. (3) For proceedings involving the relinquishment of a water right and appeals of informal hearings of the pollution control hearings board, the petition shall be filed in the superior court for the county in which is located the land upon which the water was used. Sec. 703. RCW 43.21B.110 and 1993 c 387 s 22 are each amended to read as follows: (1) The pollution control hearings board shall only have jurisdiction to hear and decide appeals from the following decisions of the department, the director, the administrator of the office of marine safety, and the air pollution control boards or authorities as established pursuant to chapter 70.94 RCW, or local health departments: (a) Civil penalties imposed pursuant to RCW 18.104.155, 70.94.431, 70.105.080, 70.107.050, 88.46.090, 90.03.600, 90.48.144, 90.56.310, and 90.56.330. (b) Orders issued pursuant to RCW 18.104.043, 18.104.060, 43.27A.190, 70.94.211, 70.94.332, 70.105.095, 86.16.020, 88.46.070, ((90.14.130,)) and 90.48.120. (c) The issuance, modification, or termination of any permit, certificate, or license by the department or any air authority in the exercise of its jurisdiction, including the issuance or termination of a waste disposal permit, the denial of an application for a waste disposal permit, or the modification of the conditions or the terms of a waste disposal permit. (d) Decisions of local health departments regarding the grant or denial of solid waste permits pursuant to chapter 70.95 RCW. (e) Decisions of local health departments regarding the issuance and enforcement of permits to use or dispose of biosolids under RCW 70.95J.080. (f) Any other decision by the department, the administrator of the office of marine safety, or an air authority which pursuant to law must be decided as an adjudicative proceeding under chapter 34.05 RCW. (2) The jurisdiction of the pollution control hearings board is further limited as follows: (a) The hearings board has no jurisdiction to review orders pertaining to the relinquishment of a water right under RCW 90.14.130, or to review proceedings regarding general adjudications of water rights conducted pursuant to chapter 90.03 or 90.44 RCW. (b) The following hearings shall not be conducted by the hearings board: (((a))) (i) Hearings required by law to be conducted by the shorelines hearings board pursuant to chapter 90.58 RCW. (((b))) (ii) Hearings conducted by the department pursuant to RCW 70.94.332, 70.94.390, 70.94.395, 70.94.400, 70.94.405, 70.94.410, and 90.44.180. (((c) Proceedings by the department relating to general adjudications of water rights pursuant to chapter 90.03 or 90.44 RCW. (d))) (iii) Hearings conducted by the department to adopt, modify, or repeal rules. (3) ((Review of)) Rules and regulations adopted by the hearings board shall be subject to review in accordance with the provisions of the Administrative Procedure Act, chapter 34.05 RCW. Sec. 704. RCW 43.21B.130 and 1990 c 65 s 3 are each amended to read as follows: The administrative procedure act, chapter 34.05 RCW, shall apply to the appeal of rules and regulations adopted by the board to the same extent as it applied to the review of rules and regulations adopted by the directors and/or boards or commissions of the various departments whose powers, duties and functions were transferred by section 6, chapter 62, Laws of 1970 ex. sess. to the department. ((All other decisions and orders of the director and all decisions of air pollution control boards or authorities established pursuant to chapter 70.94 RCW shall be subject to review by the hearings board as provided in this chapter.)) Sec. 705. RCW 43.21B.240 and 1989 c 175 s 105 are each amended to read as follows: The department and air authorities shall not have authority to hold adjudicative proceedings pursuant to the Administrative Procedure Act, chapter 34.05 RCW. Such hearings, except those involving water quantity decisions, as defined in section 713 of this act, that are appealed directly to a superior court, and appeals of orders pertaining to the relinquishment of a water right issued pursuant to RCW 90.14.130, shall be held by the pollution control hearings board. Sec. 706. RCW 43.21B.305 and 1994 c 253 s 5 are each amended to read as follows: In an appeal that involves a penalty of five thousand dollars or less, and in an informal hearing appeal relating to a water quantity decision as defined in section 713 of this act, the appeal may be heard by one member of the board, whose decision shall be the final decision of the board. The board shall define by rule alternative procedures to expedite small appeals. These alternatives may include: Mediation, upon agreement of all parties unless initiated as provided in section 713 of this act; submission of testimony by affidavit; conducting hearing by telephone; or other forms that may lead to less formal and faster resolution of appeals. Sec. 707. RCW 43.21B.310 and 1992 c 73 s 3 are each amended to read as follows: (1) Except as provided in subsection (2) of this section, any order issued by the department((, the administrator of the office of marine safety,)) or authority pursuant to RCW 70.94.211, 70.94.332, 70.105.095, 43.27A.190, 86.16.020, 88.46.070, or 90.48.120(2) or any provision enacted after July 26, 1987, or any permit, certificate, or license issued by the department may be appealed to the pollution control hearings board if the appeal is filed with the board and served on the department or authority within thirty days after receipt of the order. Except as provided under chapter 70.105D RCW, ((this is)) these are the exclusive means of appeal of such an order. (((2))) (a) The department, the administrator, or the authority in its discretion may stay the effectiveness of an order during the pendency of such an appeal. (((3))) (b) At any time during the pendency of an appeal of such an order to the board, the appellant may apply pursuant to RCW 43.21B.320 to the hearings board for a stay of the order or for the removal thereof. (((4))) (c) Any appeal before the hearings board must contain the following in accordance with the rules of the hearings board: (((a))) (i) The appellant's name and address; (((b))) (ii) The date and docket number of the order, permit, or license appealed; (((c))) (iii) A description of the substance of the order, permit, or license that is the subject of the appeal; (((d))) (iv) A clear, separate, and concise statement of every error alleged to have been committed; (((e))) (v) A clear and concise statement of facts upon which the requester relies to sustain his or her statements of error; and (((f))) (vi) A statement setting forth the relief sought. (((5))) (d) Upon failure to comply with any final order of the department or the administrator, the attorney general, on request of the department or the administrator, may bring an action in the superior court of the county where the violation occurred or the potential violation is about to occur to obtain such relief as necessary, including injunctive relief, to insure compliance with the order. The air authorities may bring similar actions to enforce their orders. (((6))) (e) An appealable decision or order shall be identified as such and shall contain a conspicuous notice to the recipient that it may be appealed only by filing an appeal with the hearings board and serving it on the department within thirty days of receipt. (2) Water quantity decisions of the department, as defined in section 713 of this act, may be appealed either to the pollution control hearings board or directly to a superior court as provided in section 713 of this act. Appeals of orders pertaining to the relinquishment of a water right are filed in superior court as provided by RCW 90.14.130. Sec. 708. RCW 43.27A.190 and 1987 c 109 s 11 are each amended to read as follows: Notwithstanding and in addition to any other powers granted to the department of ecology, whenever it appears to the department that a person is violating or is about to violate any of the provisions of the following: (1) Chapter 90.03 RCW; or (2) Chapter 90.44 RCW; or (3) Chapter 86.16 RCW; or (4) Chapter 43.37 RCW; or (5) Chapter 43.27A RCW; or (6) Any other law relating to water resources administered by the department; or (7) A rule or regulation adopted, or a directive or order issued by the department relating to subsections (1) through (6) of this section; the department may cause a written regulatory order to be served upon ((said)) the person either personally, or by registered or certified mail delivered to addressee only with return receipt requested and acknowledged by him or her. The order shall specify the provision of the statute, rule, regulation, directive or order alleged to be or about to be violated, and the facts upon which the conclusion of violating or potential violation is based, and shall order the act constituting the violation or the potential violation to cease and desist or, in appropriate cases, shall order necessary corrective action to be taken with regard to such acts within a specific and reasonable time. The regulation of a headgate or controlling works as provided in RCW 90.03.070, by a watermaster, stream patrolman, or other person so authorized by the department shall constitute a regulatory order within the meaning of this section. A regulatory order issued hereunder shall become effective immediately upon receipt by the person to whom the order is directed, except for regulations under RCW 90.03.070 which shall become effective when a written notice is attached as provided therein. Any person aggrieved by such order may appeal the order pursuant to RCW 43.21B.310, except that appeals of orders pertaining to the relinquishment of a water right shall be filed in superior court pursuant to RCW 90.14.130. Sec. 709. RCW 90.14.130 and 1987 c 109 s 13 are each amended to read as follows: When it appears to the department of ecology that a person entitled to the use of water has not beneficially used his or her water right or some portion thereof, and it appears that ((said)) the person's right has or may have reverted to the state because of such nonuse, as provided by RCW 90.14.160, 90.14.170, or 90.14.180, the department of ecology shall notify such person by order: PROVIDED, That where a company, association, district, or the United States has filed a blanket claim under the provisions of RCW 90.14.060 for the total benefits of those served by it, the notice shall be served on such company, association, district or the United States and not upon any of its individual water users who may not have used the water or some portion thereof which they were entitled to use. The order shall contain: (1) A description of the water right, including the approximate location of the point of diversion, the general description of the lands or places where such waters were used, the water source, the amount involved, the purpose of use, and the apparent authority upon which the right is based; (2) a statement that unless sufficient cause be shown on appeal the water right will be declared relinquished; and (3) a statement that such order may be appealed to the ((pollution control hearings board)) superior court. Any person aggrieved by such an order may appeal it to the ((pollution control hearings board pursuant to RCW 43.21B.310)) superior court for the county in which is located the land upon which the water was used. Any such appeal to superior court shall be heard de novo. The order shall be served by registered or certified mail to the last known address of the person and be posted at the point of division or withdrawal. The order by itself shall not alter the recipient's right to use water, if any. Sec. 710. RCW 90.14.190 and 1987 c 109 s 14 are each amended to read as follows: Any person feeling aggrieved by any decision of the department of ecology may have the same reviewed pursuant to RCW 43.21B.310. However, any order pertaining to the relinquishment of a water right shall be filed in superior court pursuant to RCW 90.14.130. In any such review, the findings of fact as set forth in the report of the department of ecology shall be prima facie evidence of the fact of any waiver or relinquishment of a water right or portion thereof. If the hearings board affirms the decision of the department, a party seeks review in superior court of that hearings board decision pursuant to chapter 34.05 RCW, and the court determines that the party was injured by an arbitrary, capricious, or erroneous order of the department, the court may award reasonable attorneys' fees. Sec. 711. RCW 90.14.200 and 1989 c 175 s 180 are each amended to read as follows: (1) All matters relating to the implementation and enforcement of this chapter by the department of ecology shall be carried out in accordance with chapter 34.05 RCW, the Administrative Procedure Act, except where the provisions of this chapter expressly conflict with chapter 34.05 RCW. Proceedings held pursuant to RCW 90.14.130 are ((adjudicative proceedings within the meaning of chapter 34.05 RCW. Final decisions of the department of ecology in these proceedings)) appealable to superior court as provided in that section. Other final decisions of the department of ecology under this chapter are subject to review by the pollution control hearings board in accordance with chapter 43.21B RCW. (2) RCW 90.14.130 provides nonexclusive procedures for determining a relinquishment of water rights under RCW 90.14.160, 90.14.170, and 90.14.180. RCW 90.14.160, 90.14.170, and 90.14.180 may be applied in, among other proceedings, general adjudication proceedings initiated under RCW 90.03.110 or 90.44.220: PROVIDED, That nothing herein shall apply to litigation involving determinations of the department of ecology under RCW 90.03.290 relating to the impairment of existing rights. Sec. 712. RCW 90.66.080 and 1979 c 3 s 8 are each amended to read as follows: The department is hereby empowered to promulgate such rules as may be necessary to carry out the provisions of this chapter. Decisions of the department, other than rule making, shall be subject to review by the pollution control hearings board or a superior court in accordance with chapter 43.21B RCW. NEW SECTION. Sec. 713. A new section is added to chapter 43.21B RCW to read as follows: (1) A water right claimant, or permit or certificate holder or applicant who is aggrieved or adversely affected by a water quantity decision may appeal the decision either to the pollution control hearings board pursuant to RCW 43.21B.310 or to the superior court for a county in which is located land on which the water is or was put to a beneficial use. (2) At the request of any party, the board shall conduct an informal hearing, consisting of mediation and, if a settlement cannot be agreed upon, fact finding with recommendations. The hearings board shall adopt rules governing the election, practice, and procedures of informal hearings consistent with this section and section 714 of this act. (3) For purposes of this chapter, a "water quantity decision" includes the following: (a) A decision to grant or deny a permit or certificate for a right to the beneficial use of water or to amend, change, or transfer such a right; and (b) A decision to enforce the conditions of a permit for, or right to, the beneficial use of water or to require any person to discontinue the use of water. NEW SECTION. Sec. 714. A new section is added to chapter 43.21B RCW to read as follows: (1) When one of the parties elects an informal hearing pursuant to section 713 of this act, a board member or an administrative law judge from the environmental hearings office shall be assigned as the mediator for the appeal. (2) The parties involved in the informal hearing must provide the mediator and the other parties in advance with a clear, concise statement of the disputed issues and the parties' position in relation to the issues and supporting documentation. The mediator shall meet with the parties either jointly or separately, in the general area of the project under review or by telephone, at the discretion of the mediator, and shall take such steps as the mediator deems appropriate to resolve their differences and reach a settlement agreement. If a settlement agreement is reached, the mediator shall prepare and submit to the hearings board a written order of dismissal to which the settlement agreement is attached. The hearings board shall enter the order and dismiss the case unless the hearings board finds that the settlement agreement is contrary to law. If the hearings board finds that the settlement agreement is contrary to law, it shall notify the parties and refer the dispute back to mediation. (3) If the parties are unable to achieve a settlement agreement within ninety days after being appointed, the mediator shall issue a statement that a settlement agreement has not been reached. After issuance of the statement, the party filing the appeal may request the hearings board to submit the dispute to fact finding with recommendations. Notice of the request for fact finding must be sent to the other parties. (4) Within five days of the receipt of the request for fact finding, the hearings board shall assign a board member or an administrative appeals judge from the environmental hearings office to serve as fact finder. The person who served as the mediator to the dispute may serve as the fact finder with the consent of both parties. (5) Within five days of being appointed, the fact finder shall establish a date, time, and place for the fact-finding hearing. The date of the hearing must be within thirty days of the appointment of the fact finder. The hearing shall be conducted in the general area where the project under review is located. At least seven days before the date of the hearing, each party must submit to the fact finder and to the other parties written proposals on all of the issues it intends to submit to fact finding. The fact finder has the power to issue subpoenas requiring the attendance and production of witnesses and the production of evidence. The order of presentation at the hearing shall be as agreed by the parties or as determined by the fact finder. Each documentary exhibit shall be filed with the fact finder and copies shall be provided to the other parties. The fact finder shall declare the hearing closed after the parties have completed presenting their testimony within agreed time limits. (6) The fact finder shall, within thirty days following the conclusion of the hearing, make written findings of fact and written recommendations to the parties as to how the dispute should be resolved. The fact finder may not apply any presumption as part of the findings of fact or recommendations. A copy of the findings and recommendations shall be filed with the hearings board. The findings of fact and recommendations of the fact finder are advisory only, and are not subject to review by the hearings board. (7) The time limits established in this section may be extended by mutual agreement of all the parties. NEW SECTION. Sec. 715. A new section is added to chapter 43.21B RCW to read as follows: (1) Within thirty days after the fact finder has filed the findings of fact and recommendations pursuant to section 714 of this act, a party may request a formal hearing by the hearings board or appeal the water quantity decision directly to superior court. All parties must agree to a formal hearing before a formal hearing is granted. (2) If a party elects to file an action in superior court following an informal hearing, it must be filed in the county in which is located the land upon which the water is or would be used. NEW SECTION. Sec. 716. A new section is added to chapter 43.21B RCW to read as follows: In all appeals involving a water quantity decision by the department, as defined in section 713 of this act, the appeal to superior court shall be heard de novo. If an informal hearing on the decision or order had been completed by the pollution control hearings board, no issue may be raised in superior court that was not raised and discussed as part of the fact-finding hearing. No bond may be required on appeals to the superior court or on review by the supreme court unless specifically required by the judge of the superior court.PART VIIIMISCELLANEOUSNEW SECTION. Sec. 801. As used in this act, part headings constitute no part of the law. NEW SECTION. Sec. 802. Sections 101 through 114 of this act constitute a new chapter in Title 90 RCW. NEW SECTION. Sec. 803. 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."

MOTION

Senator Heavey moved that the following amendments to the striking amendment by Senator Morton be considered simultaneously and be adopted:

On page 4, after line 38, insert “Nothing in this act shall affect ongoing efforts to develop new resources and the sharing of existing resources. No moratorium may be imposed on water resource decision making by the department solely because of ongoing planning efforts or the absence of a plan or planning effort. Any new planning units formed under this act shall recognize efforts already in progress." On page 8, after line 34, insert "Nothing in this act shall affect ongoing efforts to develop new resources and the sharing of existing resources. No moratorium may be imposed on water resource decision making by the department solely because of ongoing planning efforts or the absence of a plan or planning effort. Any new planning units formed under this act shall recognize efforts already in progress." Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senator Heavey on page 4, after line 38, and page 8, after line 34, to the striking amendment by Senator Morton to Second Substitute House Bill No. 2054.

The motion by Senator Heavey carried and the amendments to the striking amendment were adopted.

MOTION

Senator Kline moved that the following amendment to the striking amendment by Senator Morton be adopted:

On page 11, after line 30, delete everything through "water;" on page 12, line 27 Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Kline on page 11, after line 30, to the striking amendment by Senator Morton to Second Substitute House Bill No. 2054.

The motion by Senator Kline failed and amendment to the striking amendment was not adopted.

MOTION

Senator Morton moved that the following amendment to the striking amendment by Senator Morton be adopted:

On page 17, after line 22, insert “(3) Sections 101 through 116 of this act are null and void if any of sections 401, 402, or 501 of this act is vetoed by June 30, 1997." Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Morton on page 17, after line 22, to the striking amendment by Senator Morton to Second Substitute House Bill No. 2054.

The motion by Senator Morton carried and amendment to the striking amendment was adopted on a rising vote.

MOTION

Senator Spanel moved that the following amendment to the striking amendment by Senator Morton be adopted:

On page 22, after line 5, insert the following:"PART IVCRITICAL WATERSHED FUNCTIONSNEW SECTION. Sec. 401. A new section is added to chapter 90.71 RCW to read as follows: (1) The legislature finds that: (a) Environmental laws, rules, and policies to improve water quality have generally been developed in response to specific problems; (b) This case-by-case approach to water quality management has resulted in numerous planning, permit, and funding requirements that are often confusing, contradictory, and inefficient; (c) Lack of integrated water quality policies has resulted in less effective environmental protection, increased taxpayer costs, and considerable public frustration; (d) There is broad consensus that integration of water quality policies is best achieved by adopting a broader geographic approach that is based on how that geographic system works; (e) Scientific knowledge, technology, and data is currently available to identify the critical biological and physical functions of geographic systems, such as watersheds. However, this knowledge, technology, and data is scattered among many federal, state, local, and private entities; and (f) The Puget Sound action team was organized to coordinate federal, state, local, and private efforts across a broad geographic area. (2) The legislature therefore declares that the action team shall undertake the actions identified in section 2 of this act to enhance the ability of state and local governments to develop environmental regulations that are better integrated and make better use of existing science. NEW SECTION. Sec. 402. A new section is added to chapter 90.71 RCW to read as follows: (1) The action team shall develop, and thereafter shall periodically update a methodology, using geographic information system maps, to identify critical watershed functions within a water resource inventory area. The methodology must identify, at a minimum: (a) Critical watershed functions; (b) Areas where critical functions are impaired; (c) The causes of function impairment; (d) Areas where functions are working properly; and (e) Current land uses. (2) The action team shall initiate a case study of at least one Puget Sound water resource inventory area, using the information under subsection (1) of this section, to develop policy recommendations to expedite: (a) Agency decision making on mitigation proposals other than traditional on-site, in-kind exchanges; and (b) Preparation of plans required under chapters 36.70A, 86.12, and 90.58 RCW. Recommendations under this subsection shall include specific changes to state laws and rules. (3) In developing policy recommendations under this section, the action team shall involve all interested units of local government and may involve any other interested group or person. (4) As used in this section, the following definitions apply. (a) "Water resource inventory area" has the same meaning as in WAC 173-500-040. (b) "Critical watershed function" means any geological, hydrological, or biological function that preserves, protects, or enhances water quality, water quantity, fish and wildlife, or flood protection. (5) The policy recommendations under subsection (2) of this section shall be submitted to the appropriate standing committees of the legislature by December 1, 1999." Renumber the sections consecutively and correct any internal references accordingly. Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Spanel on page 22, after line 5, to the striking amendment by Senator Morton to Second Substitute House Bill No. 2054.

The motion by Senator Spanel failed and amendment to the striking amendment was not adopted.

The President declared the question before the Senate to be the adoption of the striking amendment by Senator Morton, as amended, to Second Substitute House Bill No. 2054.

The motion by Senator Morton carried and the striking amendment, as amended, was adopted.

MOTIONS

On motion of Senator Morton, the following title amendment was adopted:

On page 1, line 1 of the title, after "management;" strike the remainder of the title and insert "amending RCW 90.54.040, 90.54.020, 90.54.180, 90.03.383, 90.03.330, 90.14.140, 43.21B.110, 43.21B.130, 43.21B.240, 43.21B.305, 43.21B.310, 43.27A.190, 90.14.130, 90.14.190, 90.14.200, and 90.66.080; reenacting and amending RCW 34.05.514; adding new sections to chapter 90.03 RCW; adding a new section to chapter 34.05 RCW; adding new sections to chapter 43.21B RCW; adding a new chapter to Title 90 RCW; and creating new sections." On motion of Senator Morton, the rules were suspended, Second Substitute House Bill No. 2054, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Second Substitute House Bill No. 2054, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Second Substitute House Bill No. 2054, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 27; Nays, 18; Absent, 0; Excused, 4.

Voting yea: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Heavey, Hochstatter, Horn, Johnson, Long, Loveland, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Rasmussen, Rossi, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 27. Voting nay: Senators Fairley, Franklin, Fraser, Goings, Hargrove, Jacobsen, Kline, Kohl, McAuliffe, Prentice, Roach, Schow, Sheldon, Snyder, Spanel, Swanson, Thibaudeau and Wojahn - 18. Excused: Senators Bauer, Brown, Haugen and Patterson - 4. SECOND SUBSTITUTE HOUSE BILL NO. 2054, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Johnson, the Senate returned to the third order of business.

MESSAGE FROM THE GOVERNOR

April 18, 1997

TO THE HONORABLE, THE SENATE OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

I have the honor to advise you that on April 18, 1997, Governor Locke approved the following Senate Bill entitled:

Senate Bill No. 5155

Relating to vehicle width.

Sincerely,

EVERETT H. BILLINGSLEA, General Counsel

NOTICE OF SENATE RESOLUTION 1997-8669

Copies of the following resolution were placed on the members desks before adjournment:

SENATE RESOLUTION 1997-8669

By Senator McDonald

BE IT RESOLVED, That Senate Resolution No. 1997-8601, adopting the Rules of the Senate for the 55^th legislature, be amended as follows:

On page 13, add the following to Rule 37:

"3. A majority of those members elected or appointed may order that a vote on final passage of a budget bill be reconsidered more than one time. A motion for reconsideration of a budget bill may be made without notice any time during a legislative session. This rule, 37.3, shall apply retroactively to April 16, 1997, and shall expire at the conclusion (Sine Die) of the regular session of the 1997 Legislature."

MOTION

At 7:49 p.m., on motion of Senator Johnson, the Senate adjourned until 10:00 a.m., Saturday, April 19, 1997.

BRAD OWEN, President of the Senate

MIKE O'CONNELL, Secretary of the Senate