NOTICE: Formatting and page numbering in this document may be different

from that in the original published version.

SIXTIETH DAY

MORNING SESSION

House Chamber, Olympia, Thursday, March 9, 2000

The House was called to order at 10:00 a.m. by Speaker Ballard. The Clerk called the roll and a quorum was present.

The flag was escorted to the rostrum by a Sergeant at Arms Color Guard, Pages Nicole Linde and Lindsey Blankenship. Prayer was offered by Pastor Dan Secrist, Faith Assembly of Lacey.

Reading of the Journal of the previous day was dispensed with and it was ordered to stand approved.

MESSAGES FROM THE SENATE

March 9, 2000

Mr. Speaker:

The President has signed:

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2078,

SUBSTITUTE HOUSE BILL NO. 2343,

HOUSE BILL NO. 2344,

SUBSTITUTE HOUSE BILL NO. 2372,

SUBSTITUTE HOUSE BILL NO. 2377,

SUBSTITUTE HOUSE BILL NO. 2466,

SUBSTITUTE HOUSE BILL NO. 2604,

ENGROSSED HOUSE BILL NO. 2609,

SUBSTITUTE HOUSE BILL NO. 2628,

SUBSTITUTE HOUSE BILL NO. 2670,

HOUSE BILL NO. 2684,

HOUSE BILL NO. 2686,

SUBSTITUTE HOUSE BILL NO. 2766,

SUBSTITUTE HOUSE BILL NO. 2776,

SUBSTITUTE HOUSE BILL NO. 2799,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2867,

HOUSE BILL NO. 2993,

ENGROSSED HOUSE BILL NO. 2995,

SUBSTITUTE HOUSE BILL NO. 3076,

SUBSTITUTE HOUSE BILL NO. 3099,

HOUSE BILL NO. 3154,

and the same are herewith transmitted.

Tony M. Cook, Secretary

March 9, 2000

Mr. Speaker:

The President has signed:

HOUSE BILL NO. 1070,

SUBSTITUTE HOUSE BILL NO. 1218,

HOUSE BILL NO. 2330,

SUBSTITUTE HOUSE BILL NO. 2332,

SUBSTITUTE HOUSE BILL NO. 2338,

SUBSTITUTE HOUSE BILL NO. 2345,

SUBSTITUTE HOUSE BILL NO. 2348,

ENGROSSED HOUSE BILL NO. 2424,

HOUSE BILL NO. 2449,

HOUSE BILL NO. 2452,

SUBSTITUTE HOUSE BILL NO. 2454,

HOUSE BILL NO. 2495,

HOUSE BILL NO. 2505,

HOUSE BILL NO. 2520,

HOUSE BILL NO. 2522,

ENGROSSED HOUSE BILL NO. 2561,

HOUSE BILL NO. 2576,

HOUSE BILL NO. 2579,

SUBSTITUTE HOUSE BILL NO. 2599,

HOUSE BILL NO. 2600,

SUBSTITUTE HOUSE BILL NO. 2644,

SUBSTITUTE HOUSE BILL NO. 2649,

ENGROSSED HOUSE BILL NO. 2755,

HOUSE BILL NO. 2774,

HOUSE BILL NO. 2853,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2934,

SUBSTITUTE HOUSE BILL NO. 3032,

ENGROSSED HOUSE BILL NO. 3105,

and the same are herewith transmitted.

Tony M. Cook, Secretary

March 8, 2000

Mr. Speaker:

The Senate has concurred in the House amendment(s) and has passed SUBSTITUTE SENATE BILL NO. 6675 as amended by the House, and the same is herewith transmitted.

Tony M. Cook, Secretary

March 8, 2000

Mr. Speaker:

The Senate has passed:

SECOND SUBSTITUTE SENATE BILL NO. 5802,

SENATE BILL NO. 6216,

and the same are herewith transmitted.

Tony M. Cook, Secretary

March 8, 2000

Mr. Speaker:

The President has signed:

SUBSTITUTE SENATE BILL NO. 6336,

ENGROSSED SENATE BILL NO. 6555,

SUBSTITUTE SENATE BILL NO. 6675,

and the same are herewith transmitted.

Tony M. Cook, Secretary

March 8, 2000

Mr. Speaker:

The Senate has passed:

SUBSTITUTE HOUSE CONCURRENT RESOLUTION NO. 4428,

and the same is herewith transmitted.

Tony M. Cook, Secretary

March 8, 2000

Mr. Speaker:

The Senate receded from its striking amendment(s) to HOUSE BILL NO. 2353, and passed the bill without said amendment(s), and the same is herewith transmitted.

Tony M. Cook, Secretary

RESOLUTIONS

HOUSE RESOLUTION NO. 2000-4795, by Representatives Van Luven, Kenney, Wensman, Thomas, Barlean, Esser, Dunn and Talcott

WHEREAS, Various forms of Soccer have been around since Roman times, and the United States was the first British colony to start playing soccer-style games; and

WHEREAS, Soccer is now the most popular sport in the world and has become a mainstream spectator sport for all Americans to enjoy, young and old, boys and girls; and

WHEREAS, The Hispanic Soccer League of Washington was established in 1991 by Chon Garcia and other local Mexican restaurant owners to promote family fun and good sportsmanship as a way to keep Hispanic youth positively involved in community activities; and

WHEREAS, The Hispanic Soccer League of Washington consists of 40 teams with more than 800 players; and

WHEREAS, The Hispanic Soccer League of Washington is open to all persons as long as its players uphold the six pillars of character including trustworthiness, respect, responsibility, caring, fairness, and good citizenship; and

WHEREAS, President Esiquel Soltero, Vice President Victor Rangel, and Board Members Pepe Vega, Ted Rodriguez, Raul Perez Calleja, Chon Garcia, and Ernie Aguilar have provided the leadership, support, and guidance to make this important community activity successful; and

WHEREAS, Victor Rangel, professional soccer star for eleven years, a member of the 1976 Olympic Team for Mexico, a 1978 World Cup Soccer standout, and true soccer hero, has come to the state of Washington to lend his valuable skills as a coach for youth soccer and to help promote the Hispanic Soccer League of Washington;

NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives recognize and honor the Hispanic Soccer League of Washington, the players, coaches, families, and fans, Victor Rangel, and the entire board of directors for making the Hispanic Soccer League of Washington one of Washington's most successful family-oriented American sports leagues; and

BE IT FURTHER RESOLVED, That the Co-Chief Clerks of the House of Representatives immediately transmit copies of this resolution to the Board of Directors of the Hispanic Soccer League of Washington.

Representative Van Luven moved adoption of the resolution.

Representatives Van Luven and Kenney spoke in favor of the adoption of the resolution.

House Resolution No. 2000-4795 was adopted.

HOUSE RESOLUTION NO. 2000-4798, by Representatives Cox, Schoesler and Wensman

WHEREAS, It is the policy of the Washington State Legislature to recognize excellence in all fields of endeavor; and

WHEREAS, The Garfield-Palouse High School Vikings Basketball Team exhibited the highest level of excellence in winning the 1999 Washington State High School Basketball "B" Championship; and

WHEREAS, The Garfield-Palouse High School Vikings Basketball Team had an outstanding season record of 17 wins and only 2 losses and an incredible playoff record of 8 wins and no losses; and

WHEREAS, The Garfield-Palouse High School Vikings Basketball Team demonstrated amazing skill and admirable sportsmanship in achieving these outstanding accomplishments; and

WHEREAS, Head Coach Tim Coles and all the players share in the Garfield-Palouse High School Basketball Team's success by combining outstanding coaching with outstanding playing; and

WHEREAS, All these extraordinary accomplishments could not have been achieved without the support and encouragement of all the students, cheerleaders, band members, faculty, staff, alumni, families, friends, community members, and fans who backed them all the way; and

WHEREAS, The inspiring individual and team achievements of the 1999 Garfield-Palouse High School Vikings Basketball Team will always be remembered when commemorating their winning year; and

WHEREAS, The victorious Garfield-Palouse High School Vikings Basketball Team is a source of great pride to all the citizens of the state of Washington;

NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the state of Washington honor the 1999 Garfield-Palouse High School Vikings Basketball Team; and

BE IT FURTHER RESOLVED, That copies of this Resolution be immediately transmitted by the Co-Chief Clerks of the House of Representatives to the 1999 Garfield-Palouse High School Vikings Basketball Team Head Coach, Tim Coles, Garfield-Palouse High School Principal, Skip Wilson, and Garfield-Palouse School District Superintendent, Tami Hickle.

There being no objection, House Resolution No. 2000-4798 was adopted.

SENATE AMENDMENTS TO HOUSE BILL

March 8, 2000

Mr. Speaker:

The Senate receded from the State and Local Government Committee striking amendment(s) to SUBSTITUTE HOUSE BILL NO. 2392, adopted on March 1, 2000. Under Suspension of Rules, the Senate returned the bill to Second Reading for purpose of amendment(s). The Senate adopted amendment #279, and passed the bill as amended,

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that while government services are provided to the citizens of the state of Washington through many mechanisms, the most prevalent delivery of services occurs through city, county, or state government actions. Increased demand for these services and limited revenue to meet those services have led to unproductive competition between cities, counties, and the state for the revenue that is collected and shared between cities, counties, and the state.

Therefore, the legislature finds that there is a need to evaluate the delivery of government services, the allotment of revenues, and the collection and distribution of various fines and forfeitures through the establishment of a joint task force on local governments.

The legislature further finds that rules adopted by state agencies cause local governments to allocate funds to meet those rules that are not fully funded at the state level.

The legislature further finds that the state must recognize the costs to local governments of rules adopted by state agencies and mitigate the financial impacts of those rules for a significant period to allow local governments to develop strategies to comply with the requirements of Initiative Measure No. 695.

NEW SECTION. Sec. 2. (1) The joint task force on local governments is created, to consist of seventeen members including:

(a) The following four members of the house of representatives or their designees: (i) The chair and ranking minority member or the cochairs of the committee on appropriations; and (ii) the chair and ranking minority member or the cochairs of the committee on local government;

(b) The following four members of the senate or their designees: (i) The chair and the ranking minority member of the committee on ways and means; and (ii) the chair and ranking minority member of the committee on state and local government;

(d) Four members from the association of Washington cities;

(e) Two members from the Washington state association of counties; and

(f) Two members from the Washington association of county officials.

(2) The nonlegislative members of the task force shall serve without compensation, but will be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060. Legislative members of the task force will be reimbursed for travel expenses as provided in RCW

44.04.120. The staff of senate committee services and the office of program research of the house of representatives shall provide support to the task force.

(3) The task force must be cochaired by one senator, chosen by the task force, and one state representative, chosen by the task force, from opposite political parties. The cochairs shall appoint experts and advisors as nonvoting members of the task force to provide information on various subjects, including but not limited to special purpose districts and public employee unions. The task force shall establish rules of procedure at its first meeting.

NEW SECTION. Sec. 3. The joint task force on local governments shall:

(1) Complete a thorough study of the delivery of government services, allotment of revenues, and collection and distribution of various fines and forfeitures; and

(2) Commence the study by July 1, 2000, present an interim report of its findings and any recommendations to the legislature by January 30, 2001, and present a final report, including proposed legislation, addressing its recommendations to the legislature by January 1, 2002.

NEW SECTION. Sec. 4. This act expires March 30, 2002."

On page 1, line 2 of the title, after "services;" strike the remainder of the title and insert "creating new sections; and providing an expiration date."

and the same are herewith transmitted.

Tony M. Cook, Secretary

There being no objection, the House concurred in the Senate amendment(s) to Substitute House Bill No. 2392 and advanced the bill as amended by the Senate to final passage.

Representative Doumit spoke in favor of final passage of the bill.

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

Speaker Ballard stated the question before the House to be final passage of Substitute House Bill No. 2392 as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Substitute House Bill No. 2392 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Anderson, Ballasiotes, Barlean, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carlson, Carrell, B. Chandler, G. Chandler, Clements, Cody, Constantine, Conway, Cooper, Cox, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Edmonds, Edwards, Eickmeyer, Ericksen, Esser, Fisher, Fortunato, Gombosky, Grant, Haigh, Hankins, Hatfield, Huff, Hurst, Kagi, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Lovick, Mastin, McDonald, McIntire, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Pflug, Poulsen, Quall, Radcliff, Reardon, Regala, Rockefeller, Romero, Ruderman, Santos, Schindler, Schmidt, Schoesler, Schual-Berke, Scott, Skinner, D. Sommers, H. Sommers, Stensen, Sullivan, Sump, Talcott, Thomas, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 98.

Substitute House Bill No. 2392, as amended by the Senate, having received the constitutional majority, was declared passed.

SENATE AMENDMENTS TO HOUSE BILL

March 8, 2000

Mr. Speaker:

The Senate receded from the Ways and Means Committee striking amendment(s) to SUBSTITUTE HOUSE BILL NO. 2491, adopted on March 2, 2000. Under Suspension of Rules, the Senate returned the bill to Second Reading for purpose of amendment(s). The Senate adopted amendment #281, and passed the bill as amended,

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. A new section is added to chapter 10.73 RCW to read as follows:

(1) On or before December 31, 2002, a person in this state who has been sentenced to death or life imprisonment without possibility of release or parole and who has been denied postconviction DNA testing may submit a request to the county prosecutor in the county where the conviction was obtained for postconviction DNA testing, if DNA evidence was not admitted because the court ruled DNA testing did not meet acceptable scientific standards or DNA testing technology was not sufficiently developed to test the DNA evidence in the case. On and after January 1, 2003, a person must raise the DNA issues at trial or on appeal.

(2) The prosecutor shall screen the request. The request shall be reviewed based upon the likelihood that the DNA evidence would demonstrate innocence on a more probable than not basis. Upon determining that testing should occur and the evidence still exists, the prosecutor shall request DNA testing by the Washington state patrol crime laboratory. Contact with victims shall be handled through victim/witness divisions.

(3) A person denied a request made pursuant to subsections (1) and (2) of this section has a right to appeal his or her request within thirty days of denial of the request by the prosecutor. The appeal shall be to the attorney general's office. If the attorney general's office determines that it is likely that the DNA testing would demonstrate innocence on a more probable than not basis, then the attorney general's office shall request DNA testing by the Washington state patrol crime laboratory.

NEW SECTION. Sec. 2. By December 1, 2001, the office of public defense shall prepare a report detailing the following: (1) The number of postconviction DNA test requests approved by the respective prosecutor; (2) the number of postconviction DNA test requests denied by the respective prosecutor and a summary of the basis for the denials; (3) the number of appeals for postconviction DNA testing approved by the attorney general's office; (4) the number of appeals for postconviction DNA testing denied by the attorney general's office and a summary of the basis for the denials; and (5) a summary of the results of the postconviction DNA tests conducted pursuant to section 1 (2) and (3) of this act. The report shall also provide an estimate of the number of persons convicted of crimes where DNA evidence was not admitted because the court ruled DNA testing did not meet acceptable scientific standards or where DNA testing technology was not sufficiently developed to test the DNA evidence in the case.

Sec. 3. RCW 10.37.050 and 1891 c 28 s 29 are each amended to read as follows:

The indictment or information is sufficient if it can be understood therefrom--

(1) That it is entitled in a court having authority to receive (([it.])) it;

(2) That it was found by a grand jury or prosecuting attorney of the county in which the court was held;

(3) That the defendant is named, or if his name cannot be discovered, that he is described by a fictitious name or by reference to a unique genetic sequence of deoxyribonucleic acid, with the statement that his real name is ((to the jury)) unknown;

(4) That the crime was committed within the jurisdiction of the court, except where, as provided by law, the act, though done without the county in which the court is held, is triable therein;

(5) That the crime was committed at some time previous to the finding of the indictment or filing of the information, and within the time limited by law for the commencement of an action therefor;

(6) That the act or omission charged as the crime is clearly and distinctly set forth in ordinary and concise language, without repetition, and in such a manner as to enable a person of common understanding to know what is intended;

(7) The act or omission charged as the crime is stated with such a degree of certainty as to enable the court to pronounce judgment upon a conviction according to the right of the case.

NEW SECTION. Sec. 4. Nothing in this act is intended to create a legal right or cause of action. Nothing in this act is intended to deny or alter any existing legal right or cause of action. Nothing in this act should be interpreted to deny postconviction DNA testing requests under existing law by convicted and incarcerated persons who were sentenced to confinement for a term less than life or the death penalty."

On page 1, line 1 of the title, after "evidence;" strike the remainder of the title and insert "amending RCW 10.37.050; adding a new section to chapter 10.73 RCW; and creating new sections."

and the same are herewith transmitted.

Tony M. Cook, Secretary

There being no objection, the House concurred in the Senate amendment(s) to Substitute House Bill No. 2491 and advanced the bill as amended by the Senate to final passage.

Representatives Schindler and O'Brien spoke in favor of final passage of the bill.

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

Speaker Ballard stated the question before the House to be final passage of Substitute House Bill No. 2491 as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Substitute House Bill No. 2491 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute House Bill No. 2491, as amended by the Senate, having received the constitutional majority, was declared passed.

SENATE AMENDMENTS TO HOUSE BILL

March 8, 2000

Mr. Speaker:

The Senate has passed Substitute House Bill No. 2850 with the following amendment(s)

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that linen and uniform supply services have been incorrectly sited for tax purposes and as a result, some companies that perform laundry activities outside the state of Washington have not been required to collect retail sales taxes upon linen and uniform supply services provided to Washington customers. This error in tax treatment provides an incentive for businesses to locate their laundry functions out-of-state. In-state businesses cannot compete if out-of-state competitors are not required to collect sales tax.

The purpose of this act is to clarify the taxable situs of linen and uniform supply services.

Sec. 2. RCW 82.14.020 and 1997 c 201 s 1 are each amended to read as follows:

For purposes of this chapter and chapter 82.08 RCW:

(1) A retail sale consisting solely of the sale of tangible personal property shall be deemed to have occurred at the retail outlet at or from which delivery is made to the consumer((;)).

(2) A retail sale consisting essentially of the performance of personal business or professional services shall be deemed to have occurred at the place at which such services were primarily performed, except that for the performance of a tow truck service, as defined in RCW 46.55.010, the retail sale shall be deemed to have occurred at the place of business of the operator of the tow truck service((;)).

(3) A retail sale consisting of the rental of tangible personal property shall be deemed to have occurred (a) in the case of a rental involving periodic rental payments, at the primary place of use by the lessee during the period covered by each payment, or (b) in all other cases, at the place of first use by the lessee((;)).

(4) A retail sale within the scope of ((the second paragraph of)) RCW 82.04.050(2), and a retail sale of taxable personal property to be installed by the seller shall be deemed to have occurred at the place where the labor and services involved were primarily performed((;)).

(5) A retail sale consisting of the providing to a consumer of telephone service, as defined in RCW 82.04.065, other than a sale of tangible personal property under subsection (1) of this section or a rental of tangible personal property under subsection (3) of this section, shall be deemed to have occurred at the situs of the telephone or other instrument through which the telephone service is rendered((;)).

(6) A retail sale of linen and uniform supply services shall be deemed to have occurred at the place of delivery to the customer. "Linen and uniform supply service" means the activity of providing customers with a supply of clean linen, towels, uniforms, gowns, protective apparel, clean room apparel, mats, rugs, and similar items, whether ownership of the item is in the person operating the linen and uniform supply service or in the customer. The term includes supply services operating their own cleaning establishments as well as those contracting with other laundry or dry cleaning businesses.

(7) "City" means a city or town((;)).

(((7))) (8) The meaning ascribed to words and phrases in chapters 82.04, 82.08 and 82.12 RCW, as now or hereafter amended, insofar as applicable, shall have full force and effect with respect to taxes imposed under authority of this chapter((;)).

(((8))) (9) "Taxable event" shall mean any retail sale, or any use of an article of tangible personal property, upon which a state tax is imposed pursuant to chapter 82.08 or 82.12 RCW, as they now exist or may hereafter be amended: PROVIDED, HOWEVER, That the term shall not include a retail sale taxable pursuant to RCW 82.08.150, as now or hereafter amended((;)).

(((9))) (10) "Treasurer or other legal depository" shall mean the treasurer or legal depository of a county or city.

NEW SECTION. Sec. 3. This act takes effect July 1, 2000."

On page 1, line 2 of the title, after "services;" strike the remainder of the title and insert "amending RCW 82.14.020; creating a new section; and providing an effective date."

and the same is herewith transmitted.

Tony M. Cook, Secretary

There being no objection, the House concurred in the Senate amendment(s) to Substitute House Bill No. 2850 and advanced the bill as amended by the Senate to final passage.

Representatives Reardon and Pennington spoke in favor of final passage of the bill.

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

Speaker Ballard stated the question before the House to be final passage of Substitute House Bill No. 2850 as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Substitute House Bill No. 2850 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute House Bill No. 2850, as amended by the Senate, having received the constitutional majority, was declared passed.

Speaker Ballard called upon Representative Pennington to preside.

MESSAGES FROM THE SENATE

March 9, 2000

Mr. Speaker:

The Senate has concurred in the House amendment(s) and has passed the following bills as amended by the House:

SUBSTITUTE SENATE BILL NO. 6194,

SECOND SUBSTITUTE SENATE BILL NO. 6255,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6277,

SUBSTITUTE SENATE BILL NO. 6621,

SUBSTITUTE SENATE BILL NO. 6781,

ENGROSSED SUBSTITUTE SENATE CONCURRENT RESOLUTION NO. 8425,

and the same are herewith transmitted.

Tony M. Cook, Secretary

March 9, 2000

Mr. Speaker:

The President has signed:

SENATE BILL NO. 6775,

and the same is herewith transmitted.

Tony M. Cook, Secretary

RESOLUTION

HOUSE RESOLUTION NO. 2000-4791, by Representatives Reardon, Clements, Lovick, DeBolt, Gombosky, Bush, Tokuda, Crouse, Sullivan, Cairnes, Lantz, Rockefeller, Veloria, Haigh, Kagi and Wood

WHEREAS, The Boys and Girls Club has been an integral part of building the character of youth and changing young lives since 1860; and

WHEREAS, There are two thousand five hundred Boys and Girls Clubs and three million youth members nationally; and

WHEREAS, There are fifteen Boys and Girls Club Organizations, and seventy-seven individual Boys and Girls Club locations; and fifty-two thousand youth members in Washington State; and

WHEREAS, Involvement with the Boys and Girls Club gives children advantages that last a lifetime; and

WHEREAS, In every community, boys and girls are left to find their own recreation and companionship in the streets and many do not have any adult care or supervision; and

WHEREAS, The Boys and Girls Club aims to let young people know that someone cares about them; and

WHEREAS, The Boys and Girls Clubs of America's national programs have taken members from the Clubhouse to the White House, from the games room to the corporate boardroom, and from the high school orchestra to Carnegie Hall; and

WHEREAS, The Boys and Girls Clubs of America have a lineup of nationally recognized programs that address today's most pressing youth issues, teaching young people the skills they need to succeed in life;

NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives applaud the effort and work of the fifteen Boys and Girls Club Organizations in Washington State and the positive programs they provide for our youth; and

BE IT FURTHER RESOLVED, That the House of Representatives recognize April 9th through 15th as Boys and Girls Club Week, celebrating the theme "Come on Home"; and

BE IT FURTHER RESOLVED, That the House of Representatives encourage all alumni to "Come on Home" to their club and help the future generations of kids in our state and nation; and

BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Co-Chief Clerks of the House of Representatives to the Honorable Gary Locke, Governor of Washington; the Governor's cabinet officers; all state-wide elected officials; the Boys and Girls Club of America Office; and to the Boys and Girls Clubs serving Washington State.

There being no objection, House Resolution No. 2000-4791 was adopted.

SENATE AMENDMENTS TO HOUSE BILL

There being no objection, the House did not concur in the Senate Amendment(s) to Engrossed House Bill No. 2985 and asked the Senate to recede therefrom.

SENATE AMENDMENTS TO HOUSE BILL

March 8, 2000

Mr. Speaker:

The Senate receded from the striking amendment(s) to ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2420, adopted as amended on March 2, 2000. Under Suspense of Rules, the bill was returned to Second Reading for purpose of amendment(s). The Senate adopted amendment(s) #284, and passed the bill as amended,

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. (1) The intent of this act is to protect the health and safety of the citizens of the state of Washington and the quality of the state's environment by developing and implementing environmental and public safety measures applicable to persons transporting hazardous liquids and gas by pipeline within the state of Washington. The legislature finds that public safety and the environment may best be protected by adopting standards that are equal to, or more stringent than, those adopted by the federal government, so long as they do not impermissibly interfere with interstate commerce.

(2) The legislature recognizes that additional federal authority is needed to implement a comprehensive pipeline safety program and by this act and other measures directs the state to seek that authority.

(3) It is also the intent of the legislature that the governor work with the state congressional delegation in seeking:

(a) To amend the federal pipeline safety act to delegate authority to qualified states to adopt and enforce standards equal to or more stringent than federal standards;

(b) State authority to administer and enforce federal requirements related to pipeline safety; and

(c) Higher levels of funding for state and federal pipeline safety activities and for states to respond to pipeline accident emergencies.

(4) While the legislature acknowledges that serious accidents have occurred for hazardous liquid and gas pipelines in this nation and elsewhere, it recognizes that there are fundamental differences between hazardous liquid pipelines and gas pipelines and that a different system of safety regulations must be applied for each kind of pipeline.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Commission" means the utilities and transportation commission.

(2) "Department" means the department of ecology.

(3) "Failsafe" means a design feature that will maintain or result in a safe condition in the event of malfunction or failure of a power supply, component, or control device.

(4) "Gas" means natural gas, flammable gas, or toxic or corrosive gas.

(5) "Gas pipeline" means all parts of a pipeline facility through which gas moves in transportation, including, but not limited to, line pipe, valves, and other appurtenances connected to line pipe, pumping units, fabricated assemblies associated with pumping units, metering and delivery stations and fabricated assemblies therein, and breakout tanks. "Gas pipeline" does not include process or transfer pipelines.

(6) "Gas pipeline company" means a person or entity constructing, owning, or operating a gas pipeline for transporting gas. A "gas pipeline company" does not include: (a) Distribution systems owned and operated under franchise for the sale, delivery, or distribution of natural gas at retail; or (b) excavation contractors or other contractors that contract with a gas pipeline company.

(7) "Hazardous liquid" means: (a) Petroleum, petroleum products, or anhydrous ammonia as those terms are defined in 49 C.F.R. Part 195 in effect March 1, 1998; and (b) carbon dioxide.

(8) "Local government" means a political subdivision of the state or a city or town.

(9) "Person" means an individual, partnership, franchise holder, association, corporation, a state, a city, a county, or any political subdivision or instrumentality of a state, and its employees, agents, or legal representatives.

(10) "Pipeline," "pipeline system," or "hazardous liquid pipeline" means all parts of a pipeline facility through which a hazardous liquid moves in transportation, including, but not limited to, line pipe, valves, and other appurtenances connected to line pipe, pumping units, fabricated assemblies associated with pumping units, metering and delivery stations and fabricated assemblies therein, and breakout tanks. "Pipeline" or "pipeline system" does not include process or transfer pipelines.

(11) "Pipeline company" or "hazardous liquid pipeline company" means a person or entity constructing, owning, or operating a pipeline for transporting hazardous liquid. A "pipeline company" does not include: (a) Distribution systems owned and operated under franchise for the sale, delivery, or distribution of natural gas at retail; or (b) excavation contractors or other contractors that contract with a pipeline company.

(12) "Reportable release" means a spilling, leaking, pouring, emitting, discharging, or any other uncontrolled escape of a hazardous liquid in excess of one barrel, or forty-two gallons.

(13) "Safety management systems" means management systems that include coordinated and interdisciplinary evaluations of the effect of significant changes to a pipeline system before such changes are implemented.

(14) "Transfer pipeline" means a buried or aboveground pipeline used to carry oil between a tank vessel or transmission pipeline and the first valve inside secondary containment at the facility provided that any discharge on the facility side of that first valve will not directly impact waters of the state. A transfer pipeline includes valves, and other appurtenances connected to the pipeline, pumping units, and fabricated assemblies associated with pumping units. A transfer pipeline does not include process pipelines, pipelines carrying ballast or bilge water, transmission pipelines, or tank vessel or storage tanks.

(15) "Transmission pipeline" means a gas pipeline that transports gas within a storage field, or transports gas from an interstate pipeline or storage facility to a distribution main or a large volume gas user, or operates at a hoop stress of twenty percent or more of the specified minimum yield strength.

Sec. 3. RCW 81.88.040 and 1998 c 123 s 1 are each amended to read as follows:

(1) ((The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Pipeline company" means a person or entity constructing, owning, or operating an intrastate pipeline for transporting hazardous liquid, whether or not such a person or entity is a public service company otherwise regulated by the commission. For the purposes of this section, a pipeline company does not include: (i) Distribution systems owned and operated under franchise for the sale, delivery, or distribution of natural gas at retail; or (ii) excavation contractors or other contractors that contract with a pipeline company.

(b) "Hazardous liquid" means: (i) Petroleum, petroleum products, or anhydrous ammonia as those terms are defined in 49 C.F.R. Part 195 in effect March 1, 1998; and (ii) carbon dioxide. The commission by rule may incorporate by reference other substances designated as hazardous by the secretary of transportation under 49 U.S.C. Sec. 60101(a)(4).

(2) The commission shall adopt by rule intrastate pipeline safety standards for pipeline transportation and pipeline facilities that: (a) Apply to pipeline companies transporting hazardous liquids; (b) cover the design, construction, and operation of pipelines transporting hazardous liquids; and (c) require pipeline companies to design, construct, and maintain their pipeline facilities so they are safe and efficient.

(3))) A person, officer, agent, or employee of a pipeline company who, as an individual or acting as an officer, agent, or employee of such a company, violates or fails to comply with this ((section)) chapter or a rule adopted under this section, or who procures, aids, or abets another person or entity in the violation of or noncompliance with this section or a rule adopted under this section, is guilty of a gross misdemeanor.

(((4))) (2)(a) A pipeline company, or any person, officer, agent, or employee of a pipeline company that violates a provision of this section, or a rule adopted under this section, is subject to a civil penalty to be assessed by the commission.

(b) The commission shall adopt rules: (i) Setting penalty amounts, but may not exceed the penalties specified in the federal pipeline safety laws, 49 U.S.C. Sec. 60101 et seq.; and (ii) establishing procedures for mitigating penalties assessed((; and (iii) incorporating by reference other substances designated as hazardous by the secretary of transportation under 49 U.S.C. Sec. 60101(a)(4))).

(c) In determining the amount of the penalty, the commission shall consider: (i) The appropriateness of the penalty in relation to the position of the person charged with the violation; (ii) the gravity of the violation; and (iii) the good faith of the person or company charged in attempting to achieve compliance after notification of the violation.

(d) The amount of the penalty may be recovered in a civil action in the superior court of Thurston county or of some other county in which the violator may do business. In all actions for recovery, the rules of evidence shall be the same as in ordinary civil actions. All penalties recovered under this section must be paid into the state treasury and credited to the ((public service revolving fund)) hazardous liquid pipeline safety account.

(3) The commission shall adopt rules incorporating by reference other substances designated as hazardous by the secretary of transportation under 49 U.S.C. Sec. 60101(a)(4).

(((5))) (4) The commission shall also have the power of injunctive relief, as required by 49 U.S.C. Sec. 60105(b), to enforce the provisions of this chapter.

(5) Nothing in this section duplicates the authority of the energy facility site evaluation council under chapter 80.50 RCW.

NEW SECTION. Sec. 4. (1) The hazardous liquid pipeline safety account is created in the custody of the state treasurer. All receipts from the federal office of pipeline safety and any other state or federal funds provided for hazardous liquid pipeline safety must be deposited in the account, except as provided in subsection (2) of this section. Any fines collected under this chapter, or otherwise designated to this account must be deposited in the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for funding pipeline safety.

(2) Federal funds received before June 30, 2001, shall be treated as receipt of unanticipated funds and expended, without appropriation, for the designated purposes.

NEW SECTION. Sec. 5. (1) A comprehensive program of hazardous liquid pipeline safety is authorized by sections 2, 4, 5, 9, 11, 13, and 20 of this act, and RCW 81.88.040 to be developed and implemented consistent with federal law. Except as provided in subsection (6) of this section, the commission shall administer and enforce all laws related to hazardous liquid pipeline safety.

(2) The commission shall adopt rules for pipeline safety standards for hazardous liquid pipeline transportation that:

(a) Require pipeline companies to design, construct, operate, and maintain their pipeline facilities so they are safe and efficient;

(b) Require pipeline companies to rapidly locate and isolate all reportable releases from pipelines, that may include:

(i) Installation of remote control shut-off valves; and

(ii) Installation of remotely monitored pressure gauges and meters;

(d) Require reporting of emergency situations, including emergency shutdowns and material defects or physical damage that impair the serviceability of a pipeline; and

(e) Require pipeline companies to submit operations safety plans to the commission once every five years, as well as any amendments to the plan made necessary by changes to the pipeline system or its operation. The safety plan shall include emergency response procedures.

(3) The commission shall approve operations safety plans if they have been deemed fit for service. A plan shall be deemed fit for service when it provides for pipelines that are designed, developed, constructed, operated, and periodically modified to provide for protection of public safety and the environment. Pipeline operations safety plans shall, at a minimum, include:

(a) A schedule of inspection and testing within the pipeline distribution system of:

(i) All mechanical components;

(ii) All electronic components; and

(iii) The structural integrity of all pipelines as determined through pressure testing, internal inspection tool surveys, or another appropriate technique;

(b) Failsafe systems;

(d) Emergency management training for pipeline operators.

(4) The commission shall coordinate information related to pipeline safety by providing technical assistance to local planning and siting authorities.

(5) The commission shall evaluate, and consider adopting, proposals developed by the federal office of pipeline safety, the national transportation safety board, and other agencies and organizations related to methods and technologies for testing the integrity of pipeline structure, leak detection, and other elements of pipeline operation.

(6) The authorities of sections 2, 4, 5, 9, 11, 13, and 20 of this act, and RCW 81.88.040 relating to hazardous liquid pipeline safety shall be transferred from the commission to the department pursuant to section 13 of this act upon the occurrence of either:

(a) Amendments to federal pipeline safety laws to eliminate preemption of state authority to regulate safety requirements for such pipelines; or

(b) The granting of federal authority to the state to enforce or adopt any safety requirements for interstate hazardous liquid pipelines.

NEW SECTION. Sec. 6. (1) The commission shall develop, in consultation with representatives of hazardous liquid pipeline companies, gas pipeline companies, local governments, and the excavation and construction industries: (a) A curricula aimed at the prevention of third-party excavation damage to hazardous liquid pipelines and gas pipelines; and (b) a plan for distribution of the curricula.

(2) The curricula shall include training on:

(a) Prevention of damage to hazardous liquid and gas pipelines;

(b) The danger involved if a hazardous liquid or gas pipeline is damaged;

(d) The importance of immediately reporting damage to a hazardous liquid or gas pipeline and the importance of immediately repairing a damaged hazardous liquid or gas pipeline.

NEW SECTION. Sec. 7. (1) The commission shall require hazardous liquid pipeline companies, and gas pipeline companies with interstate pipelines, gas transmission pipelines, or gas pipelines operating over two hundred fifty pounds per square inch gauge, to provide accurate maps of their pipeline to specifications developed by the commission sufficient to meet the needs of first responders including installation depth information when known.

(2) The commission shall evaluate the sufficiency of the maps and consolidate the maps into a state-wide geographic information system. The commission shall assist local governments in obtaining hazardous liquid and gas pipeline location information and maps. The maps shall be made available to the one-number locator services as provided in chapter 19.122 RCW. The mapping system shall be consistent with the United States department of transportation national pipeline mapping program.

(3) The mapping system shall be completed by January 1, 2006, and periodically updated thereafter. The commission shall develop a plan for funding the geographic information system and report its recommendations to the legislature by December 15, 2000.

NEW SECTION. Sec. 8. A new section is added to chapter 43.110 RCW to read as follows:

The municipal research council shall, by June 30, 2001, develop and periodically update, for the consideration by local governments:

(1) A model ordinance that establishes setback and depth requirements for new hazardous liquid and gas pipeline construction; and

(2) A model franchise agreement for jurisdictions through which a hazardous liquid or gas pipeline is located.

NEW SECTION. Sec. 9. (1) The commission and the department shall apply for federal delegation for the state's program for the purposes of enforcement of federal hazardous liquid pipeline safety requirements. If the secretary of transportation delegates inspection authority to the state as provided in this subsection, the department, at a minimum, shall do the following:

(a) Inspect hazardous liquid pipelines periodically as specified in the inspection program;

(b) Collect fees;

(d) File reports with the United States secretary of transportation as required to maintain the delegated authority.

(2) The commission and the department shall also seek federal authority to adopt safety standards related to the monitoring and testing of interstate hazardous liquid pipelines.

(3) Upon delegation under subsection (1) of this section or under a grant of authority under subsection (2) of this section, to the extent authorized by federal law, the department shall adopt rules for interstate pipelines that are no less stringent than the state's laws and rules for intrastate hazardous liquid pipelines.

NEW SECTION. Sec. 10. A new section is added to chapter 80.28 RCW to read as follows:

(1) The commission shall seek and accept federal delegation for the commission's inspectors as federal agents for the purposes of enforcement of federal laws covering gas pipeline safety and the associated federal rules, as they exist on the effective date of this section. The commission shall establish and submit to the United States secretary of transportation an inspection program that complies with requirements for delegated interstate agent inspection authority. If the secretary of transportation delegates inspection authority to the state as provided in this subsection, the commission, at a minimum, shall do the following:

(a) Inspect gas pipelines periodically as specified in the inspection program;

(b) Collect fees;

(d) File reports with the United States secretary of transportation as required to maintain the delegated authority.

(2) The commission shall also seek federal authority to adopt safety standards related to the monitoring and testing of interstate gas pipelines.

(3) Upon designation under subsection (1) of this section or under a grant of authority under subsection (2) of this section, to the extent authorized by federal law, the commission shall adopt rules for interstate gas pipelines that are no less stringent than the state's laws and rules for intrastate gas pipelines.

NEW SECTION. Sec. 11. The commission may inspect any record, map, or written procedure required by federal law to be kept by a hazardous liquid pipeline company concerning the reportable releases, and the design, construction, testing, or operation and maintenance of hazardous liquid pipelines.

NEW SECTION. Sec. 12. A new section is added to chapter 80.28 RCW to read as follows:

The commission may inspect any record, map, or written procedure required by federal law to be kept by a gas pipeline company concerning the reporting of gas releases, and the design, construction, testing, or operation and maintenance of gas pipelines.

NEW SECTION. Sec. 13. (1) All powers, duties, and functions of the utilities and transportation commission pertaining to hazardous liquid pipeline safety, except economic regulatory authority under chapters 81.88, 80.24, and 81.24 RCW, are transferred to the department of ecology effective upon the department's receipt of any delegated federal authority over interstate hazardous liquid pipelines, or upon such earlier date as the office of financial management may determine in the event that federal law is amended to remove all or part of the federal preemption of state regulation of hazardous liquid pipelines. The timing of the transfer shall be facilitated by a memorandum of agreement between the two agencies, with any disputes resolved by the office of financial management. All references to the commission or the utilities and transportation commission in the Revised Code of Washington shall be construed to mean the director or the department of ecology when referring to the functions transferred in this section.

(2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the utilities and transportation commission pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the department of ecology. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the utilities and transportation commission in carrying out the powers, functions, and duties transferred shall be made available to the department of ecology. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the department of ecology.

(b) Any appropriations made to the utilities and transportation commission for carrying out the powers, functions, and duties transferred shall be transferred and credited to the department of ecology under the agreement authorized in subsection (1) of this section.

(c) Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

(3) All employees of the utilities and transportation commission engaged in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the department of ecology. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the department of ecology to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

(4) All rules and all pending business before the utilities and transportation commission pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the department of ecology. All existing contracts and obligations shall remain in full force and shall be performed by the department of ecology.

(5) The transfer of the powers, duties, functions, and personnel of the utilities and transportation commission shall not affect the validity of any act performed before the effective date of this section.

(6) If apportionments of budgeted funds are required because of the transfers directed by this section, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

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

NEW SECTION. Sec. 14. (1) The citizens committee on pipeline safety is established to advise the state agencies and other appropriate federal and local government agencies and officials on matters relating to hazardous liquid and gas pipeline safety, routing, construction, operation, and maintenance. The committee shall have thirteen total members who shall be appointed by the governor to staggered three-year terms and shall consist of: (a) Nine members representing local government, including elected officials and the public; and (b) four nonvoting members, representing owners and operators of hazardous liquid and gas pipelines. The committee shall review and comment on proposed rules and the operation of the state pipeline safety programs.

(2) The committee may create one or more technical advisory committees comprised of gas and hazardous liquid pipeline owners or operators, agency representatives, natural resource and environmental interests, or other interested parties.

(3) The committee established in subsection (1) of this section constitutes a class one group under RCW 43.03.220. Expenses for this group, as well as staff support, shall be provided by the utilities and transportation commission and, if additional pipeline authority is transferred to it, the department of ecology.

Sec. 15. RCW 19.122.020 and 1984 c 144 s 2 are each amended to read as follows:

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

(1) "Business day" means any day other than Saturday, Sunday, or a legal local, state, or federal holiday.

(2) "Damage" includes the substantial weakening of structural or lateral support of an underground facility, penetration, impairment, or destruction of any underground protective coating, housing, or other protective device, or the severance, partial or complete, of any underground facility to the extent that the project owner or the affected utility owner determines that repairs are required.

(3) "Emergency" means any condition constituting a clear and present danger to life or property, or a customer service outage.

(4) "Excavation" means any operation in which earth, rock, or other material on or below the ground is moved or otherwise displaced by any means, except the tilling of soil less than twelve inches in depth for agricultural purposes, or road and ditch maintenance that does not change the original road grade or ditch flowline.

(5) "Excavator" means any person who engages directly in excavation.

(6) "Gas" means natural gas, flammable gas, or toxic or corrosive gas.

(7) "Hazardous liquid" means: (a) Petroleum, petroleum products, or anhydrous ammonia as those terms are defined in 49 C.F.R. Part 195 as in effect on March 1, 1998; and (b) carbon dioxide. The utilities and transportation commission may by rule incorporate by reference other substances designated as hazardous by the secretary of transportation.

(8) "Identified facility" means any underground facility which is indicated in the project plans as being located within the area of proposed excavation.

(((7))) (9) "Identified but unlocatable underground facility" means an underground facility which has been identified but cannot be located with reasonable accuracy.

(((8))) (10) "Locatable underground facility" means an underground facility which can be field-marked with reasonable accuracy.

(((9))) (11) "Marking" means the use of stakes, paint, or other clearly identifiable materials to show the field location of underground facilities, in accordance with the current color code standard of the American public works association. Markings shall include identification letters indicating the specific type of the underground facility.

(((10))) (12) "Person" means an individual, partnership, franchise holder, association, corporation, a state, a city, a county, or any subdivision or instrumentality of a state, and its employees, agents, or legal representatives.

(((11))) (13) Pipeline" or "pipeline system" means all or parts of a pipeline facility through which hazardous liquid or gas moves in transportation, including, but not limited to, line pipe, valves, and other appurtenances connected to line pipe, pumping units, fabricated assemblies associated with pumping units, metering and delivery stations and fabricated assemblies therein, and breakout tanks. "Pipeline" or "pipeline system" does not include process or transfer pipelines as defined in section 2 of this act.

(14) "Pipeline company" means a person or entity constructing, owning, or operating a pipeline for transporting hazardous liquid or gas. A pipeline company does not include: (a) Distribution systems owned and operated under franchise for the sale, delivery, or distribution of natural gas at retail; or (b) excavation contractors or other contractors that contract with a pipeline company.

(15) "Reasonable accuracy" means location within twenty-four inches of the outside dimensions of both sides of an underground facility.

(((12))) (16) "Underground facility" means any item buried or placed below ground for use in connection with the storage or conveyance of water, sewage, electronic, telephonic or telegraphic communications, cablevision, electric energy, petroleum products, gas, gaseous vapors, hazardous liquids, or other substances and including but not limited to pipes, sewers, conduits, cables, valves, lines, wires, manholes, attachments, and those parts of poles or anchors below ground. This definition does not include pipelines as defined in subsection (13) of this section, but does include distribution systems owned and operated under franchise for the sale, delivery, or distribution of natural gas at retail.

(((13))) (17) "One-number locator service" means a service through which a person can notify utilities and request field-marking of underground facilities.

NEW SECTION. Sec. 16. A new section is added to chapter 19.122 RCW to read as follows:

(1) By December 31, 2000, the utilities and transportation commission shall cause to be established a single state-wide toll-free telephone number to be used for referring excavators to the appropriate one-number locator service.

(2) The utilities and transportation commission, in consultation with the Washington utilities coordinating council, shall establish minimum standards and best management practices for one-number locator services consistent with the recommendations of the governor's fuel accident prevention and response team issued in December 1999. By December 31, 2000, the commission shall provide its recommendations to the appropriate standing committees of the house of representatives and the senate.

(3) One-number locator services shall be operated by nongovernmental agencies.

Sec. 17. RCW 19.122.030 and 1988 c 99 s 1 are each amended to read as follows:

(1) Before commencing any excavation, excluding agriculture tilling less than twelve inches in depth, the excavator shall provide notice of the scheduled commencement of excavation to all owners of underground facilities through a one-number locator service.

(2) All owners of underground facilities within a one-number locator service area shall subscribe to the service. One-number locator service rates for cable television companies will be based on the amount of their underground facilities. If no one-number locator service is available, notice shall be provided individually to those owners of underground facilities known to or suspected of having underground facilities within the area of proposed excavation. The notice shall be communicated to the owners of underground facilities not less than two business days or more than ten business days before the scheduled date for commencement of excavation, unless otherwise agreed by the parties.

(3) Upon receipt of the notice provided for in this section, the owner of the underground facility shall provide the excavator with reasonably accurate information as to its locatable underground facilities by surface-marking the location of the facilities. If there are identified but unlocatable underground facilities, the owner of such facilities shall provide the excavator with the best available information as to their locations. The owner of the underground facility providing the information shall respond no later than two business days after the receipt of the notice or before the excavation time, at the option of the owner, unless otherwise agreed by the parties. Excavators shall not excavate until all known facilities have been marked. Once marked by the owner of the underground facility, the excavator is responsible for maintaining the markings. Excavators shall have the right to receive compensation from the owner of the underground facility for costs incurred if the owner of the underground facility does not locate its facilities in accordance with this section.

(4) The owner of the underground facility shall have the right to receive compensation for costs incurred in responding to excavation notices given less than two business days prior to the excavation from the excavator.

(5) An owner of underground facilities is not required to indicate the presence of existing service laterals or appurtenances if the presence of existing service laterals or appurtenances on the site of the construction project can be determined from the presence of other visible facilities, such as buildings, manholes, or meter and junction boxes on or adjacent to the construction site.

(6) Emergency excavations are exempt from the time requirements for notification provided in this section.

(7) If the excavator, while performing the contract, discovers underground facilities which are not identified, the excavator shall cease excavating in the vicinity of the facility and immediately notify the owner or operator of such facilities, or the one-number locator service.

NEW SECTION. Sec. 18. A new section is added to chapter 19.122 RCW to read as follows:

(1) Before commencing any excavation, excluding agricultural tilling less than twelve inches in depth, an excavator shall notify pipeline companies of the scheduled commencement of excavation through

a one-number locator service in the same manner as is required for notifying owners of underground facilities of excavation work under RCW 19.122.030. Pipeline companies shall have the same rights and responsibilities as owners of underground facilities under RCW 19.122.030 regarding excavation work. Excavators have the same rights and responsibilities under this section as they have under RCW 19.122.030.

(2) Project owners, excavators, and pipeline companies have the same rights and responsibilities relating to excavation near pipelines that they have for excavation near underground facilities as provided in RCW 19.122.040.

NEW SECTION. Sec. 19. A new section is added to chapter 19.122 RCW to read as follows:

(1) After a pipeline company has been notified by an excavator pursuant to section 18 of this act that excavation work will uncover any portion of the pipeline, the pipeline company shall ensure that the pipeline section in the vicinity of the excavation is examined for damage prior to being reburied.

(2) Immediately upon receiving information of third-party damage to a hazardous liquid pipeline, the company that operates the pipeline shall terminate the flow of hazardous liquid in that pipeline until it has visually inspected the pipeline. After visual inspection, the operator of the hazardous liquid pipeline shall determine whether the damaged pipeline section should be replaced or repaired, or whether it is safe to resume pipeline operation. Immediately upon receiving information of third-party damage to a gas pipeline, the company that operates the pipeline shall conduct a visual inspection of the pipeline to determine whether the flow of gas through that pipeline should be terminated, and whether the damaged pipeline should be replaced or repaired. A record of the pipeline company's inspection report and test results shall be provided to the utilities and transportation commission consistent with reporting requirements under 49 C.F.R. 195 Subpart B.

(3) Pipeline companies shall immediately notify local first responders and the department of any reportable release of a hazardous liquid from a pipeline. Pipeline companies shall immediately notify local first responders and the commission of any blowing gas leak from a gas pipeline that has ignited or represents a probable hazard to persons or property. Pipeline companies shall take all appropriate steps to ensure the public safety in the event of a release of hazardous liquid or gas under this subsection.

(4) No damaged pipeline may be buried until it is repaired or relocated. The pipeline company shall arrange for repairs or relocation of a damaged pipeline as soon as is practical or may permit the excavator to do necessary repairs or relocation at a mutually acceptable price.

NEW SECTION. Sec. 20. A new section is added to chapter 48.48 RCW to read as follows:

(1) The chief of the Washington state patrol, through the director of fire protection or his or her authorized deputy, shall, in consultation with the emergency management program within the state military department, the department of ecology, the utilities and transportation commission, and local emergency services organizations:

(a) Evaluate the preparedness of local first responders in meeting emergency management demands under subsection (2) of this section; and

(b) Conduct an assessment of the equipment and personnel needed by local first responders to meet emergency management demands related to pipelines.

(2) The chief of the Washington state patrol, through the director of fire protection or his or her deputy, shall develop curricula for training local first responders to deal with hazardous liquid and gas pipeline accidents. The curricula shall be developed in conjunction with pipeline companies and local first responders, and shall include a timetable and costs for providing training as defined in the curricula to all communities housing pipelines. Separate curricula shall be developed for hazardous liquid and gas pipelines so that the differences between pipelines may be recognized and appropriate accident responses provided. The need for a training program for regional incident management teams shall also be evaluated.

(3) In consultation with other relevant agencies, the chief of the Washington state patrol, through the director of fire protection or his or her deputy, shall identify the need and means for achieving consistent application of the national interagency incident management system.

(4) For the purposes of this section, "local first responders" means police, fire, emergency medical staff, and volunteers.

NEW SECTION. Sec. 21. A pipeline company that has been notified by an excavator that excavation work will occur near a hazardous liquid pipeline shall ensure that the pipeline company's representative consults with the excavator on-site prior to the excavation. The pipeline company has the discretion to require that the pipeline section in the vicinity of the excavation is fully uncovered and examined for damage prior to being reburied.

NEW SECTION. Sec. 22. A new section is added to chapter 80.28 RCW to read as follows:

A gas pipeline company that has been notified by an excavator that excavation work will occur near a gas transmission pipeline shall ensure that the pipeline company's representative consults with the excavator on-site prior to the excavation. The gas pipeline company has the discretion to require that the pipeline section in the vicinity of the excavation is fully uncovered and examined for damage prior to being reburied.

NEW SECTION. Sec. 23. A new section is added to chapter 19.122 RCW to read as follows:

Any person who willfully damages or removes a permanent marking used to identify an underground facility or pipeline, or a temporary marking prior to its intended use, is subject to a civil penalty of not more than one thousand dollars for each act.

NEW SECTION. Sec. 24. A new section is added to chapter 19.122 RCW to read as follows:

(1) Any person who fails to notify the one-number locator service and causes damage to a hazardous liquid or gas pipeline is subject to a civil penalty of not more than ten thousand dollars for each violation.

(2) All civil penalties recovered under this section relating to hazardous liquid pipelines shall be deposited into the hazardous liquid pipeline safety account created in section 4 of this act. All civil penalties recovered under this section relating to gas pipelines shall be deposited in the general fund and expended for the purpose of enforcement of gas pipeline safety laws.

NEW SECTION. Sec. 25. A pipeline containing petroleum or petroleum products that is wholly owned by an individual and which pipeline is located wholly on the individual's property, that is not adjoining marine waters, is exempt from the provisions of this chapter. This exemption applies only for pipelines that do not have any connections to pipelines or facilities that extend beyond the pipeline owner's property and the petroleum or petroleum products must be for use only at that location.

NEW SECTION. Sec. 26. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION. Sec. 27. This act may be known and cited as the Washington state pipeline safety act.

NEW SECTION. Sec. 28. Sections 1, 2, 4 through 7, 9, 11, 13, 14, 21, and 25 through 27 of this act are each added to chapter 81.88 RCW.

NEW SECTION. Sec. 29. 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."

On page 1, line 1 of the title, after "safety;" strike the remainder of the title and insert "amending RCW 81.88.040, 19.122.020, and 19.122.030; adding new sections to chapter 81.88 RCW; adding a new section to chapter 43.110 RCW; adding new sections to chapter 80.28 RCW; adding new sections to chapter 19.122 RCW; adding a new section to chapter 48.48 RCW; prescribing penalties; and declaring an emergency."

and the same are herewith transmitted.

Tony M. Cook, Secretary

There being no objection, the House concurred in the Senate amendment(s) to Engrossed Second Substitute House Bill No. 2420 and advanced the bill as amended by the Senate to final passage.

Representatives Linville and G. Chandler spoke in favor of final passage of the bill.

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

The Speaker (Representative Pennington presiding) stated the question before the House to be final passage of Engrossed Second Substitute House Bill No. 2420 as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Second Substitute House Bill No. 2420 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed Second Substitute House Bill No. 2420, as amended by the Senate, having received the constitutional majority, was declared passed.

There being no objection, the rules were suspended, the Committee on Financial Institutions & Insurance was relieved of House Bill No. 3068, and the bill was placed on Second Reading.

There being no objection, the House advanced to the sixth order of business.

SECOND READING

HOUSE BILL NO. 3068, by Representatives Kessler, Hankins, Delvin, Mastin, Grant, Linville and G. Chandler

Exempting privatization contracts for the treatment of radioactive waste and hazardous substances from property taxes.

The bill was read the second time.

Representative Hankins moved the adoption of the following amendment (688):

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. A new section is added to chapter 84.36 RCW to read as follows:

(1)(a) Beginning with taxes levied for collection in calendar year 2006, all personal property located on land owned by the United States, or an instrumentality of the United States, at the Hanford reservation that is used exclusively in the performance of a privatization contract to pretreat, treat, vitrify, and immobilize tank waste under subsection (2) of this section is exempt from taxation.

(b) Beginning with taxes levied for collection in calendar year 2002, and until the application of (a) of this subsection, all personal property located on land owned by the United States, or an instrumentality of the United States, at the Hanford reservation that is used exclusively in the performance of a privatization contract to pretreat, treat, vitrify, and immobilize tank waste under subsection (3) of this section is exempt from taxes levied by the state.

(2) To qualify for the exemption provided in subsection (1)(a) of this section, the personal property must be owned by a person that has a privatization contract to pretreat, treat, vitrify, and immobilize tank waste located at the Hanford reservation. For the purposes of this section, a privatization contract means a contract in which the United States, or an instrumentality of the United States, has designated the other contracting party as a party responsible for carrying out tank waste clean-up operations at the Hanford reservation.

(3) To qualify for the exemption provided in subsection (1)(b) of this section, the personal property must be owned by a person that has, and complies with, a privatization contract to pretreat, treat, vitrify, and immobilize tank waste located at the Hanford reservation. The personal property must be acquired or constructed, and operated, in compliance with the tank waste treatment complex requirements of the Hanford federal facility agreement and consent order, including schedules for tank waste treatment complex start of construction, initiation of hot commissioning, and schedules for tank waste pretreatment processing and vitrification. The privatization contractor shall submit annually, on or before August 1st, a progress report to the Washington state department of ecology documenting compliance with the requirements of the agreement and consent order and the terms of the privatization contract. The department of ecology shall annually issue, on or before October 1st, a determination to the department of revenue indicating whether the privatization contractor is in compliance with the requirements of the agreement and consent order.

(4) An inadvertent use of property, which otherwise qualifies for an exemption under this section, in a manner inconsistent with the purpose for which the exemption is granted, does not nullify the exemption if the inadvertent use is not part of a pattern of use. A pattern of use is presumed when an inadvertent use is repeated in the same assessment year or in two or more successive assessment years.

NEW SECTION. Sec. 2. This act takes effect January 1, 2001."

Correct the title.

Representatives Hankins and Dunshee spoke in favor of the adoption of the amendment.

The amendment was adopted.

The bill was ordered engrossed.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Kessler and Hankins spoke in favor of passage of the bill.

The Speaker (Representative Pennington presiding) stated the question before the House to be final passage of Engrossed House Bill No. 3068.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed House Bill No. 3068, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed House Bill No. 3068, having received the constitutional majority, was declared passed.

There being no objection, the rules were suspended, Second Substitute Senate Bill No. 5802 was read the first time in full and placed on Second Reading.

SECOND READING

SECOND SUBSTITUTE SENATE BILL NO. 5802, by Senate Committee on Ways & Means (originally sponsored by Senators Fairley, Hochstatter, Honeyford, Spanel and Franklin)

Regulating telecommunications contractors and installations.

The bill was read the second time.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives B. Chandler and Wood spoke in favor of passage of the bill.

The Speaker (Representative Pennington presiding) stated the question before the House to be final passage of Second Substitute Senate Bill No. 5802.

ROLL CALL

The Clerk called the roll on the final passage of Second Substitute Senate Bill No. 5802 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Second Substitute Senate Bill No. 5802, having received the constitutional majority, was declared passed.

There being no objection, the rules were suspended, the Rules Committee was relieved of Engrossed Senate Bill No. 6561, and the bill was placed on Second Reading.

SECOND READING

ENGROSSED SENATE BILL NO. 6561, by Senators Rossi, Patterson, Horn, Loveland, Heavey, Deccio, Rasmussen, Winsley, T. Sheldon and Haugen

Designating the Washington national guard as a law enforcement agency for the purposes of federal drug asset forfeiture laws.

The bill was read the second time.

There being no objection, the House deferred action on Engrossed Senate Bill No. 6561.

SENATE AMENDMENTS TO HOUSE BILL

March 8, 2000

Mr. Speaker:

The Senate has passed Substitute House Bill No. 2460 with the following amendment(s)

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. (1) The legislature finds that:

(a) There are geographic areas within communities that are characterized by a lack of employment opportunities, an average income level that is below the median income level for the surrounding community, a lack of affordable housing, deteriorating infrastructure, and a lack of facilities for community services, job training, and education;

(b) Strategies to encourage reinvestment in these areas by assisting local businesses to become stronger and area residents to gain economic power involve a variety of activities and partnerships;

(c) Reinvestment in these areas cannot be accomplished with only governmental resources and require a comprehensive approach that integrates various incentives, programs, and initiatives to meet the economic, physical, and social needs of the area;

(d) Successful reinvestment depends on a local government's ability to coordinate public resources in a cohesive, comprehensive strategy that is designed to leverage long-term private investment in an area;

(e) Reinvestment can strengthen the overall tax base through increased tax revenue from expanded and new business activities and physical property improvement;

(f) Local governments, in cooperation with area residents, can provide leadership as well as planning and coordination of resources and necessary supportive services to address reinvestment in the area; and

(g) It is in the public interest to adopt a targeted approach to revitalization and enlist the resources of all levels of government, the private sector, community-based organizations, and community residents to revitalize an area.

(2) The legislature declares that the purposes of the community empowerment zone act are to:

(a) Encourage reinvestment through strong partnerships and cooperation between all levels of government, community-based organizations, area residents, and the private sector;

(b) Involve the private sector and stimulate private reinvestment through the judicious use of public resources;

(d) Include all levels of government, community individuals, organizations, and the private sector in the policy-making process.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise:

(1) "Area" means a geographic area within a local government that is described by a close perimeter boundary.

(2) "Community empowerment zone" means an area meeting the requirements of RCW 43.63A.700 (as recodified by this act) and officially designated by the director.

(3) "Department" means the department of community, trade, and economic development.

(4) "Director" means the director of the department of community, trade, and economic development.

(5) "Local government" means a city, code city, town, or county.

Sec. 3. RCW 43.63A.700 and 1994 sp.s. c 7 s 702 are each amended to read as follows:

(1) The department, in cooperation with the department of revenue, the employment security department, and the office of financial management, ((shall)) may approve applications submitted by local governments for an area's designation as a community empowerment zone under this ((section)) chapter. The application for designation shall be in the form and manner and contain such information as the department may prescribe, provided that the application ((for designation)) shall:

(a) Contain information sufficient for the director to determine if the criteria established in RCW 43.63A.710 (as recodified by this act) have been met((.));

(b) Be submitted on behalf of the local government by its chief elected official, or, if none, by the governing body of the local government((.));

(c) Contain a five-year community empowerment plan that ((describes the proposed designated community empowerment zone's community development needs and present a strategy for meeting those needs. The plan shall address the following categories: Housing needs; public infrastructure needs, such as transportation, water, sanitation, energy, and drainage/flood control; other public facilities needs, such as neighborhood facilities or facilities for provision of health, education, recreation, public safety, or other services; community economic development needs, such as commercial/industrial revitalization, job creation and retention considering the unemployment and underemployment of area residents, accessibility to financial resources by area residents and businesses, investment within the area, or other related components of community economic development; and social service needs.

The local government is required to provide a description of its strategy for meeting the needs identified in this subsection (1)(c). As part of the strategy, the local government is required to identify the needs for which specific plans are currently in place and the source of funds expected to be used. For the balance of the area's needs, the local government must identify the source of funds expected to become available during the next two-year period and actions the local government will take to acquire those funds.)) meets the requirements of section 5 of this act; and

(d) Certify that ((neighborhood)) area residents were given the opportunity to participate in the development of the five-year community empowerment strategy required under (((c) of this subsection)) section 5 of this act.

(2) No local government shall submit more than two ((neighborhoods)) areas to the department for possible designation as a ((designated)) community empowerment zone under this ((section)) chapter.

(3)(a) ((Within ninety days after January 1, 1994,)) The director may designate up to six ((designated)) community empowerment zones, state-wide, from among the applications ((eligible)) submitted for designation as a ((designated)) community empowerment zone.

(b) The director shall make determinations of designated community empowerment zones on the basis of the following factors:

(i) The strength and quality of the local government commitments to meet the needs identified in the five-year community empowerment plan required under ((this)) section 5 of this act.

(ii) The level of private ((commitments by private entities)) sector commitment of additional resources and contribution to the ((designated)) community empowerment zone.

(iii) The potential for revitalization of the area as a result of designation as a ((designated)) community empowerment zone.

(iv) Other factors the director deems necessary.

(4) Except as provided in section 6 of this act, an area that was designated a community empowerment zone before January 1, 1996, under this section, automatically and without additional action by the local government continues its designation under this chapter.

(5) The department may not designate additional community empowerment zones after January 1, 2004, but may amend or rescind designation of community empowerment zones in accordance with section 6 of this act.

Sec. 4. RCW 43.63A.710 and 1994 sp.s. c 7 s 703 are each amended to read as follows:

(1) The director may not designate an area as a ((designated)) community empowerment zone unless that area meets the following requirements:

(a) The area must be designated by the legislative authority of the local government as an area to receive federal, state, and local assistance designed to increase economic, physical, or social activity in the area;

(b) The area must have at least fifty-one percent of the households in the area with incomes at or below eighty percent of the county's median income, adjusted for household size;

(c) The average unemployment rate for the area, for the most recent twelve-month period for which data is available must be at least one hundred twenty percent of the average unemployment rate of the county; and

(d) A five-year community empowerment plan for the area that meets the requirements of ((RCW 43.63A.700(1)(c) and as further defined by the director)) section 5 of this act must be adopted.

(2) The director may establish, by rule, such other requirements as the director may reasonably determine necessary and appropriate to assure that the purposes of this ((section)) chapter are satisfied.

(3) In determining if an area meets the requirements of this section, the director may consider data provided by the United States bureau of the census from the most recent census or any other reliable data that the director determines to be acceptable for the purposes for which the data is used.

NEW SECTION. Sec. 5. (1) The five-year community empowerment plan required under RCW 43.63A.700 (as recodified by this act) shall contain information that describes the community development needs of the proposed community empowerment zone and present a strategy for meeting those needs. The plan shall address the following categories:

(a) Housing needs for all economic segments of the proposed community empowerment zone;

(b) Public infrastructure needs, such as transportation, water, sanitation, energy, and drainage and flood control;

(c) Other public facilities needs, such as neighborhood facilities or facilities for the provision of health, education, recreation, public safety, and other services;

(d) Community economic development needs, such as commercial and industrial revitalization, job creation and retention considering the unemployment and underemployment of area residents, accessibility to financial resources by area residents and businesses, investment within the area, and other related components of community economic development; and

(e) Social service needs of residents in the proposed community empowerment zone.

(2) The local government must provide a description of its strategy for meeting the needs identified in subsection (1) of this section. As part of the community empowerment zone strategy, the local government must identify the needs for which specific plans are currently in place and the source of funds expected to be used. For the balance of the area's needs, the local government must identify the source of funds expected to become available during the next two-year period and actions the local government will take to acquire those funds.

(3) The local government must submit an annual progress report to the department that details the extent to which the local government is working to meet the needs identified in the five-year community empowerment plan. If applicable, the progress report must also contain a discussion on the impediments to meeting the needs outlined in the five-year community empowerment plan. The department must determine the date the annual progress reports are due from each local government.

NEW SECTION. Sec. 6. (1) The terms or conditions of a community empowerment zone approved under this chapter may be amended to:

(a) Alter the boundaries of the community empowerment zone; or

(b) Terminate the designation of a community empowerment zone.

(2)(a) A request for an amendment under subsection (1)(a) of this section may not be in effect until the department issues an amended designation for the community empowerment zone that approves the requested amendment. The local government must promptly file with the department a request for approval that contains information the department deems necessary to evaluate the proposed changes and its impact on the area's designation as a community empowerment zone under RCW 43.63A.710 (as recodified by this act). The local government must hold at least two public hearings on the proposed changes and include the information in its request for an amendment to its community empowerment zone.

(b) The department shall approve or disapprove a proposed amendment to a community empowerment zone within sixty days of its receipt of a request under subsection (1)(a) of this section. The department may not approve changes to a community empowerment zone that are not in conformity with this chapter.

(3)(a) The termination of an area's designation as a community empowerment zone under subsection (1)(b) of this section is not effective until the department issues a finding stating the reasons for the termination, which may include lack of commitment of resources to activities in the community empowerment zone by the public, private, and community-based sectors. The local government may file an appeal to the department's findings within sixty days of the notice to terminate the area's designation. The department must notify the local government of the results within thirty days of the filing of the appeal.

(b) A termination of an area's designation as a community empowerment zone has no effect on benefits previously extended to individual businesses. The local government may not commit benefits to a business after the effective date of the termination of an area's designation as a community empowerment zone.

(4) The department may request applications from local governments for designation as community empowerment zones under this chapter as a result of a termination of an area's designation as a community empowerment zone under this section.

NEW SECTION. Sec. 7. The department must administer this chapter and has the following powers and duties:

(1) To monitor the implementation of chapter . . ., Laws of 2000 (this act) and submit reports evaluating the effectiveness of the program and any suggestions for legislative changes to the governor and legislature by December 1, 2000;

(2) To develop evaluation and performance measures for local governments to measure the effectiveness of the program at the local level on meeting the objectives of this chapter;

(3) To provide information and appropriate assistance to persons desiring to locate and operate a business in a community empowerment zone;

(4) To work with appropriate state agencies to coordinate the delivery of programs, including but not limited to housing, community and economic development, small business assistance, social service, and employment and training programs which are carried on in a community empowerment zone; and

(5) To develop rules necessary for the administration of this chapter.

NEW SECTION. Sec. 8. The administration of a community empowerment zone is under the jurisdiction of the local government. Each local government must, by ordinance, designate a community empowerment zone administrator for the area designated as a community empowerment zone that is within its jurisdiction. A community empowerment zone administrator must be an officer or employee of the local government. The community empowerment zone administrator is the liaison between the local government, the department, the business community, and labor and community-based organizations within the community empowerment zone.

NEW SECTION. Sec. 9. This chapter may be known and cited as the Washington community empowerment zone act.

NEW SECTION. Sec. 10. Sections 1, 2, and 5 through 9 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 11. RCW 43.63A.700 and 43.63A.710, as amended by this act, are each recodified as sections in chapter 43.-- RCW (sections 1, 2, and 5 through 9 of this act).

NEW SECTION. Sec. 12. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION. Sec. 13. (1) The legislature finds that establishing a clear state-wide strategy for successful economic development will best prepare the state of Washington to respond to the challenges and take advantage of future economic cycles. The legislature further finds that without a state-wide economic development plan the state's budget and election cycles make it difficult for government to adhere to consistent, long-term economic development priorities that are essential to successful, enhanced economic development. The legislature further finds that the purpose of economic development is to increase the standard of living and enhance the quality of life of the citizens of this state.

(2) It is the intent of the legislature that a strategic state-wide economic development plan be created that reflects the following goals and objectives:

(a) To create and maintain jobs and income that would not otherwise be created or maintained, and to increase wealth rather than to redistribute it;

(b) To add value to private sector economic activity; and

(c) To assist businesses in developing their business strategies, increasing the skills of their workers and managers, applying advanced technologies, developing infrastructure, accessing capital, and enhancing social capital.

NEW SECTION. Sec. 14. For the purposes of this chapter "department" means the department of community, trade, and economic development, or its successor agency or agencies. "The plan" or "state plan" means a state-wide economic development plan, as developed under sections 15 and 16 of this act.

NEW SECTION. Sec. 15. (1) The legislative committee on economic development shall take the lead responsibility for creating a state-wide strategic plan for economic development in conjunction with the department, and an advisory group of business, labor, and other interests. The advisory group shall be appointed by the lieutenant governor and shall consist of no more than twelve members.

(2) In preparing the state plan, the legislative committee on economic development and the department shall recognize:

(a) Regional economic, political, and cultural differences, and acknowledge the special challenges facing urban and rural communities; and

(b) Special contributions of, and challenges facing, women and minority-owned businesses.

(3) The plan should set priorities and concentrate resources on those priorities.

(4) The plan should include specific implementation steps and establish a process for institutionalizing economic development planning.

NEW SECTION. Sec. 16. The legislative committee on economic development and the department shall develop and include the following elements in the plan:

(1) New strategies that seek to improve the overall competitiveness of groups of similar businesses, usually termed clusters, and entire industries or sectors rather than traditional strategies that focus on individualized assistance. These strategies should foster interfirm cooperation and learning, technology adaptation, and work-based learning to improve work force skills. Under these strategies the state acts as a broker of available private and public development resources, or contracts for such broker services;

(2) Direction to the department to develop programs consistent with the state plan, and that are characterized by outcome-based performance management systems and decentralized decision making;

(3) Direction to the department to assist local governments and other interested parties in the creation of regional economic development plans consistent with the state plan; and

(4) Direction to the department to develop a professional research capacity to keep the state's trade assistance operation regularly appraised of opportunities and updated on performance.

NEW SECTION. Sec. 17. The legislature recognizes the urgent need for having a plan in place as soon as is reasonably possible. The legislative committee on economic development and the department are directed to immediately develop a work plan and take other steps necessary to implement sections 13 through 16 of this act.

NEW SECTION. Sec. 18. Sections 13 through 16 of this act constitute a new chapter in Title 43 RCW.

Sec. 19. RCW 43.330.070 and 1993 c 280 s 10 are each amended to read as follows:

(1) The department shall work closely with local communities to increase their capacity to respond to economic, environmental, and social problems and challenges. The department shall coordinate the delivery of development services and technical assistance to local communities or regional areas. It shall promote partnerships between the public and private sectors and between state and local officials to encourage appropriate economic growth and opportunity in communities throughout the state, in particular strategies designed to encourage economic growth and opportunities in community empowerment zones designated under RCW 43.63A.700 (as recodified by this act). The department shall promote appropriate local development by: Supporting the ability of communities to develop and implement strategic development plans; assisting businesses to start up, maintain, or expand their operations; encouraging public infrastructure investment and private and public capital investment in local communities; supporting efforts to manage growth and provide affordable housing and housing services; providing for the identification and preservation of the state's historical and cultural resources; and expanding employment opportunities.

(2) The department shall define a set of services including training and technical assistance that it will make available to local communities, community-based nonprofit organizations, regional areas, industry clusters, or businesses. The department shall simplify access to these programs by providing more centralized and user-friendly information and referral. The department shall coordinate community and economic development efforts to minimize program redundancy and maximize accessibility. The department shall develop a set of criteria for targeting services to local communities.

(3) The department shall develop a coordinated and systematic approach to providing training to community-based nonprofit organizations, local communities, industry clusters, and businesses. The approach shall be designed to increase the economic and community development skills available in local communities by providing training and funding for training for local citizens, nonprofit organizations, industry clusters, and businesses. The department shall emphasize providing training in those communities most in need of state assistance.

(4) As used in this section, "industry clusters" means a geographic concentration of interdependent competitive firms that do business with each other. Clusters also include firms that sell inside and outside of the geographic region as well as support firms that supply raw materials, components, and business services.

NEW SECTION. Sec. 20. The legislature finds that economic development, work force training, international trade, tourism development, housing assistance, assistance to local governments, and other programs and services provided by the department of community, trade, and economic development are vital to all regions of the state. The legislature further finds that program development and service delivery to the eastern region of the state could be significantly enhanced by a continuous, full-time physical staff presence in that region.

NEW SECTION. Sec. 21. For the purposes of sections 20 through 23 of this act:

(1) "Department" means the department of community, trade, and economic development, or its successor agency or agencies.

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

NEW SECTION. Sec. 22. In order to more effectively respond to the needs of eastern Washington communities, the department shall, as soon as practicable, establish a field office and a full-time staff presence in eastern Washington. If practicable, the office shall be colocated with one or more existing state agencies in the Tri-Cities area to facilitate the urgent economic development needs of southeastern Washington. This office shall be staffed by the director in the most efficient manner that is likely to provide improved service to eastern Washington communities.

NEW SECTION. Sec. 23. Program activities and priorities for this office serving eastern Washington shall be determined by the director, in consultation with local government officials, business, labor, and educational advisors from the region.

NEW SECTION. Sec. 24. (1) The legislature finds that Washington's quality of life, standard of living, and social and economic opportunity all depend on the vitality of the state's economy. The legislature further finds that economic development tries to reinforce the natural way by which strong foundations in the areas of human resources, capital resources, technology, tax and regulatory, advanced physical infrastructure, information and communication infrastructure, and quality of life strengthen the economy. The legislature further finds that the strength and vitality of the state's economy depends on the competitiveness of the state's industry clusters. The legislature further finds industry clusters can become a powerful magnet for businesses to locate in an area and create a spawning ground for start-up companies. The legislature further finds that industry clusters create large, diverse pools of experienced workers; attract suppliers who tend to congregate in their vicinity for increased efficiency; and foster a competitive spirit that stimulates growth and innovative strategic alliances. The legislature further finds that the state must first identify and understand the industry clusters before strategies can be developed to enhance their competitive position in the world.

(2) It is the intent of the legislature to establish an industry cluster-based approach to economic development as a component of a state-wide strategy to address economic growth and quality of life issues.

NEW SECTION. Sec. 25. A new section is added to chapter 43.330 RCW to read as follows:

(1) The department of community, trade, and economic development, or its successor agency, shall work with industry associations and organizations to identify industry clusters on a regional and state-wide basis. The industry clusters may include, but not be limited to aerospace, agriculture, food processing, forest products, business services, financial services, health and biomedical, software, transportation and distribution, environmental technology, and microelectronics.

(2) In the identification of industry clusters, the department's activities may include, but are not limited to:

(a) Conducting focus group discussions, facilitating meetings, and conducting studies to identify industry clusters, members of an industry cluster, the current state of the industry cluster, and issues of common concern of the industry cluster;

(b) Supporting the formation of industry cluster associations, publication of cluster association directories, and related efforts to encourage the entry of new firms into the industry cluster; and

(3) The department shall work with identified industry clusters, private sector organizations, local governments, local economic development organizations, and higher education and training institutions to assist in the development of strategies designed to strengthen the competitiveness of the state's industry clusters. The department shall, on a continuing basis, evaluate effectiveness of the services provided to industry clusters using information gathered at the regional and state-wide level.

(4) As used in this section, "industry cluster" means a geographic concentration of interdependent competitive firms that do business with each other. Clusters also include firms that sell inside and outside of the geographic region as well as support firms that supply raw materials, components, and business services.

Sec. 26. RCW 43.330.090 and 1998 c 245 s 85 are each amended to read as follows:

(1) The department shall work with private sector organizations, industry clusters, local governments, local economic development organizations, and higher education and training institutions to assist in the development of strategies to diversify the economy, facilitate technology transfer and diffusion, and increase value-added production by focusing on targeted sectors. The targeted sectors may include, but are not limited to, software, forest products, biotechnology, environmental industries, recycling markets and waste reduction, aerospace, food processing, tourism, film and video, microelectronics, new materials, robotics, and machine tools. The department shall, on a continuing basis, evaluate the potential return to the state from devoting additional resources to a targeted sector's approach to economic development and including additional sectors in its efforts. The department shall use information gathered in each service delivery region in formulating its sectoral strategies and in designating new targeted sectors.

(2) The department shall ensure that the state continues to pursue a coordinated program to expand the tourism industry throughout the state in cooperation with the public and private tourism development organizations. The department shall work to provide a balance of tourism activities throughout the state and during different seasons of the year. In addition, the department shall promote, market, and encourage growth in the production of films and videos, as well as television commercials within the state; to this end the department is directed to assist in the location of a film and video production studio within the state.

(3) In assisting in the development of a targeted sector, the department's activities may include, but are not limited to:

(a) Conducting focus group discussions, facilitating meetings, and conducting studies to identify members of the sector, appraise the current state of the sector, and identify issues of common concern within the sector;

(b) Supporting the formation of industry associations, publications of association directories, and related efforts to create or expand the activities or industry associations;

(c) Assisting in the formation of flexible networks by providing (i) agency employees or private sector consultants trained to act as flexible network brokers and (ii) funding for potential flexible network participants for the purpose of organizing or implementing a flexible network;

(d) Helping establish research consortia;

(e) Facilitating joint training and education programs;

(f) Promoting cooperative market development activities;

(g) Analyzing the need, feasibility, and cost of establishing product certification and testing facilities and services; and

(h) Providing for methods of electronic communication and information dissemination among firms and groups of firms to facilitate network or industry cluster activity.

(4) As used in this section, "industry cluster" has the same meaning as in section 25 of this act.

Sec. 27. RCW 82.60.049 and 1999 c 164 s 304 are each amended to read as follows:

(1) For the purposes of this section:

(a) "Eligible area" also means a designated community empowerment zone approved before January 1, 2000, under RCW 43.63A.700 or a county containing a community empowerment zone approved before January 1, 2000.

(b) "Eligible investment project" also means an investment project in an eligible area as defined in this section.

(2) In addition to the provisions of RCW 82.60.040, the department shall issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters 82.08, 82.12, and 82.14 RCW, on each eligible investment project that is located in an eligible area, if the applicant establishes that at the time the project is operationally complete:

(a) The applicant will hire at least one qualified employment position for each seven hundred fifty thousand dollars of investment on which a deferral is requested; and

(b) The positions will be filled by persons who at the time of hire are residents of the community empowerment zone in which the project is located. As used in this subsection, "resident" means the person makes his or her home in the community empowerment zone. A mailing address alone is insufficient to establish that a person is a resident for the purposes of this section. The persons must be hired after the date the application is filed with the department.

(3) All other provisions and eligibility requirements of this chapter apply to applicants eligible under this section.

(4) If a person does not meet the requirements of this section by the end of the calendar year following the year in which the project is certified as operationally complete, all deferred taxes are immediately due.

NEW SECTION. Sec. 28. A new section is added to chapter 82.14 RCW to read as follows:

(1) The county legislative authority of a county in which there is a community empowerment zone as defined in section 2 of this act may submit an authorizing proposition to the county voters and, if the proposition is approved by a majority of persons voting, fix and impose a sales and use tax in accordance with the terms of this chapter for the purposes designated in subsection (3) of this section.

(2) The tax authorized in this section shall be in addition to any other taxes authorized by law and shall be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax shall equal one-tenth of one percent of the selling price in the case of sales tax, or value of the article used in the case of a use tax.

(3) Moneys received from any tax imposed under this section shall be used solely for the purpose of providing funds for costs associated with financing, design, acquisition, construction, equipping, operating, maintaining, remodeling, repairing, reequipping, and improvement of emergency communication systems and facilities.

(4) Counties in which there are community empowerment zones as defined in section 2 of this act are authorized to develop joint ventures to collocate emergency communication systems and facilities.

NEW SECTION. Sec. 29. 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."

On page 1, line 1 of the title, after "zones;" strike the remainder of the title and insert "amending RCW 43.63A.700, 43.63A.710, 43.330.070, 43.330.090, and 82.60.049; adding a new section to chapter 43.330 RCW; adding a new section to chapter 82.14 RCW; adding new chapters to Title 43 RCW; creating new sections; and recodifying RCW 43.63A.700 and 43.63A.710."

and the same are herewith transmitted.

Tony M. Cook, Secretary

There being no objection, the House did not concur in the Senate Amendment(s) to Substitute House Bill No. 2460 and asked the Senate to recede therefrom.

SIGNED BY THE SPEAKERS

The Speakers signed:

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1987,

HOUSE BILL NO. 2353,

SUBSTITUTE HOUSE BILL NO. 2378,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2380,

HOUSE BILL NO. 2400,

SUBSTITUTE HOUSE BILL NO. 2418,

SUBSTITUTE HOUSE BILL NO. 2441,

HOUSE BILL NO. 2510,

HOUSE BILL NO. 2531,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2588,

HOUSE BILL NO. 2595,

SECOND SUBSTITUTE HOUSE BILL NO. 2637,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2647,

ENGROSSED HOUSE BILL NO. 2648,

SECOND SUBSTITUTE HOUSE BILL NO. 2663,

HOUSE BILL NO. 2807,

SUBSTITUTE HOUSE BILL NO. 2903,

SUBSTITUTE HOUSE BILL NO. 2912,

HOUSE JOINT MEMORIAL NO. 4026,

SUBSTITUTE HOUSE CONCURRENT RESOLUTION NO. 4428,

SUBSTITUTE SENATE BILL NO. 6336,

ENGROSSED SENATE BILL NO. 6555,

SUBSTITUTE SENATE BILL NO. 6675,

SECOND READING

ENGROSSED SENATE BILL NO. 6561, by Senators Rossi, Patterson, Horn, Loveland, Heavey, Deccio, Rasmussen, Winsley, T. Sheldon and Haugen

Designating the Washington national guard as a law enforcement agency for the purposes of federal drug asset forfeiture laws.

Representative Campbell moved the adoption of the following amendment (696):

On page 2, beginning on line 4, strike "Whether the national guard retained or disposed of the property; the" and insert "The"

On page 2, line 7, strike "disposition" and insert "the sale"

On page 2, beginning on line 7, strike "a description and record of the national guard’s use of the money or property" and insert "if the money or the proceeds of sale of any property were promptly deposited into the public safety and education account established in RCW 43.08.250"

On page 2, after line 16, insert "All money received by the Washington national guard under this section shall be promptly deposited into the public safety and education account established in RCW 43.08.250. All property received by the Washington national guard under this section shall be promptly sold and the proceeds of sale promptly deposited into the public safety and education account established in RCW 43.08.250."

Representatives Campbell, Hurst, Lambert, Campbell (again), Sump and Carrell spoke in favor of the adoption of the amendment.

Representatives Miloscia, Schmidt and Morris spoke against the adoption of the amendment.

The amendment was adopted.

Representative Carrell moved the adoption of the following amendment (697):

On page 2, line 1, after "agency." insert "The Washington state national guard shall not otherwise request, instigate, or exercise the powers, rights, duties, or authority of a law enforcement agency and may not exercise any police powers except as ordered by the governor under article X, Washington state constitution, as provided for under R.W. 38.08.500, or as requested in writing by another law enforcement agency. Such writing shall specify the purpose of the request and the police powers to be exercised and shall be considered a public record."

Speaker Ballard assumed the chair.

Representatives Carrell, Lambert and Campbell spoke in favor of the adoption of the amendment.

Representatives Schmidt and Miloscia spoke against the adoption of the amendment.

Division was demanded. Speaker Ballard divided the House. The results of the division was 62-YEAS; 35-NAYS. The amendment was adopted.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Schmidt and Miloscia spoke in favor of passage of the bill.

Speaker Ballard stated the question before the House to be final passage of Engrossed Senate Bill No. 6561, as amended by the House.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Senate Bill No. 6561, as amended by the House, and the bill passed the House by the following vote: Yeas - 80, Nays - 18, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Ballasiotes, Barlean, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carlson, Carrell, B. Chandler, G. Chandler, Clements, Conway, Cooper, Cox, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Edwards, Eickmeyer, Ericksen, Esser, Fortunato, Gombosky, Grant, Haigh, Hankins, Hatfield, Huff, Kastama, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Lovick, Mastin, McDonald, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, O'Brien, Ogden, Parlette, Pennington, Pflug, Poulsen, Quall, Radcliff, Reardon, Rockefeller, Romero, Ruderman, Santos, Schindler, Schmidt, Schoesler, Scott, Skinner, D. Sommers, Sullivan, Sump, Talcott, Thomas, Tokuda, Van Luven, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 80.

Voting nay: Representatives Anderson, Cody, Constantine, Edmonds, Fisher, Hurst, Kagi, Keiser, McIntire, Murray, Regala, Schual-Berke, H. Sommers, Stensen, Veloria, Wensman, Wolfe and Wood - 18.

Engrossed Senate Bill No. 6561, as amended by the House, having received the constitutional majority, was declared passed.

There being no objection, the House reverted to the fifth order of business.

March 31, 2000

ESSB 6530 Prime Sponsor, Senate Committee on Ways & Means: Pertaining to plans 2 and 3 of the state retirement systems. Reported by Committee on Appropriations

MAJORITY recommendation: Do pass as amended.

Strike everything after the enacting clause and insert the following:

""PROVISIONS APPLICABLE TO PUBLIC EMPLOYEES'

RETIREMENT SYSTEM PLANS 2 AND 3"

Sec. 101. RCW 41.40.005 and 1992 c 72 s 8 are each amended to read as follows:

RCW 41.40.010 through 41.40.112 shall apply to members of plan 1 ((and)), plan 2, and plan 3.

Sec. 102. RCW 41.40.010 and 1998 c 341 s 601 are each amended to read as follows:

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

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

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

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

(4)(a) "Employer" for plan 1 members, means every branch, department, agency, commission, board, and office of the state, any political subdivision or association of political subdivisions of the state admitted into the retirement system, and legal entities authorized by RCW 35.63.070 and 36.70.060 or chapter 39.34 RCW; and the term shall also include any labor guild, association, or organization the membership of a local lodge or division of which is comprised of at least forty percent employees of an employer (other than such labor guild, association, or organization) within this chapter. The term may also include any city of the first class that has its own retirement system.

(b) "Employer" for plan 2 and plan 3 members, means every branch, department, agency, commission, board, and office of the state, and any political subdivision and municipal corporation of the state admitted into the retirement system, including public agencies created pursuant to RCW 35.63.070, 36.70.060, and 39.34.030; except that after August 31, 2000, school districts and educational service districts will no longer be employers for the public employees' retirement system plan 2.

(5) "Member" means any employee included in the membership of the retirement system, as provided for in RCW 41.40.023. RCW 41.26.045 does not prohibit a person otherwise eligible for membership in the retirement system from establishing such membership effective when he or she first entered an eligible position.

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

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

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

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

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

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

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

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

(8)(a) "Compensation earnable" for plan 1 members, means salaries or wages earned during a payroll period for personal services and where the compensation is not all paid in money, maintenance compensation shall be included upon the basis of the schedules established by the member's employer.

(i) "Compensation earnable" for plan 1 members also includes the following actual or imputed payments, which are not paid for personal services:

(A) Retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wage which the individual would have earned during a payroll period shall be considered compensation earnable and the individual shall receive the equivalent service credit;

(B) If a leave of absence is taken by an individual for the purpose of serving in the state legislature, the salary which would have been received for the position from which the leave of absence was taken, shall be considered as compensation earnable if the employee's contribution is paid by the employee and the employer's contribution is paid by the employer or employee;

(D) Compensation that a member would have received but for a disability occurring in the line of duty only as authorized by RCW 41.40.038;

(E) Compensation that a member receives due to participation in the leave sharing program only as authorized by RCW 41.04.650 through 41.04.670; and

(F) Compensation that a member receives for being in standby status. For the purposes of this section, a member is in standby status when not being paid for time actually worked and the employer requires the member to be prepared to report immediately for work, if the need arises, although the need may not arise.

(ii) "Compensation earnable" does not include:

(A) Remuneration for unused sick leave authorized under RCW 41.04.340, 28A.400.210, or 28A.310.490;

(B) Remuneration for unused annual leave in excess of thirty days as authorized by RCW 43.01.044 and 43.01.041.

(b) "Compensation earnable" for plan 2 and plan 3 members, means salaries or wages earned by a member during a payroll period for personal services, including overtime payments, and shall include wages and salaries deferred under provisions established pursuant to sections 403(b), 414(h), and 457 of the United States Internal Revenue Code, but shall exclude nonmoney maintenance compensation and lump sum or other payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, or any form of severance pay.

"Compensation earnable" for plan 2 and plan 3 members also includes the following actual or imputed payments, which are not paid for personal services:

(i) Retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wage which the individual would have earned during a payroll period shall be considered compensation earnable to the extent provided above, and the individual shall receive the equivalent service credit;

(ii) In any year in which a member serves in the legislature, the member shall have the option of having such member's compensation earnable be the greater of:

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

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

(iii) Assault pay only as authorized by RCW 27.04.100, 72.01.045, and 72.09.240;

(iv) Compensation that a member would have received but for a disability occurring in the line of duty only as authorized by RCW 41.40.038;

(v) Compensation that a member receives due to participation in the leave sharing program only as authorized by RCW 41.04.650 through 41.04.670; and

(vi) Compensation that a member receives for being in standby status. For the purposes of this section, a member is in standby status when not being paid for time actually worked and the employer requires the member to be prepared to report immediately for work, if the need arises, although the need may not arise.

(9)(a) "Service" for plan 1 members, except as provided in RCW 41.40.088, means periods of employment in an eligible position or positions for one or more employers rendered to any employer for which compensation is paid, and includes time spent in office as an elected or appointed official of an employer. Compensation earnable earned in full time work for seventy hours or more in any given calendar month shall constitute one service credit month except as provided in RCW 41.40.088. Compensation earnable earned for less than seventy hours in any calendar month shall constitute one-quarter service credit month of service except as provided in RCW 41.40.088. Only service credit months and one-quarter service credit months shall be counted in the computation of any retirement allowance or other benefit provided for in this chapter. Any fraction of a year of service shall be taken into account in the computation of such retirement allowance or benefits. Time spent in standby status, whether compensated or not, is not service.

(i) Service by a state employee officially assigned by the state on a temporary basis to assist another public agency, shall be considered as service as a state employee: PROVIDED, That service to any other public agency shall not be considered service as a state employee if such service has been used to establish benefits in any other public retirement system.

(ii) An individual shall receive no more than a total of twelve service credit months of service during any calendar year. If an individual is employed in an eligible position by one or more employers the individual shall receive no more than one service credit month during any calendar month in which multiple service for seventy or more hours is rendered.

(iii) A school district employee may count up to forty-five days of sick leave as creditable service solely for the purpose of determining eligibility to retire under RCW 41.40.180 as authorized by RCW 28A.400.300. For purposes of plan 1 "forty-five days" as used in RCW 28A.400.300 is equal to two service credit months. Use of less than forty-five days of sick leave is creditable as allowed under this subsection as follows:

(A) Less than twenty-two days equals one-quarter service credit month;

(B) Twenty-two days equals one service credit month;

(b) "Service" for plan 2 and plan 3 members, means periods of employment by a member in an eligible position or positions for one or more employers for which compensation earnable is paid. Compensation earnable earned for ninety or more hours in any calendar month shall constitute one service credit month except as provided in RCW 41.40.088. Compensation earnable earned for at least seventy hours but less than ninety hours in any calendar month shall constitute one-half service credit month of service. Compensation earnable earned for less than seventy hours in any calendar month shall constitute one-quarter service credit month of service. Time spent in standby status, whether compensated or not, is not service.

Any fraction of a year of service shall be taken into account in the computation of such retirement allowance or benefits.

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

(ii) A member shall receive a total of not more than twelve service credit months of service for such calendar year. If an individual is employed in an eligible position by one or more employers the individual shall receive no more than one service credit month during any calendar month in which multiple service for ninety or more hours is rendered.

(iii) Up to forty-five days of sick leave may be creditable as service solely for the purpose of determining eligibility to retire under RCW 41.40.180 as authorized by RCW 28A.400.300. For purposes of plan 2 and plan 3 "forty-five days" as used in RCW 28A.400.300 is equal to two service credit months. Use of less than forty-five days of sick leave is creditable as allowed under this subsection as follows:

(A) Less than eleven days equals one-quarter service credit month;

(B) Eleven or more days but less than twenty-two days equals one-half service credit month;

(D) More than twenty-two days but less than thirty-three days equals one and one-quarter service credit month;

(E) Thirty-three or more days but less than forty-five days equals one and one-half service credit month.

(10) "Service credit year" means an accumulation of months of service credit which is equal to one when divided by twelve.

(11) "Service credit month" means a month or an accumulation of months of service credit which is equal to one.

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

(13) "Membership service" means:

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

(b) All service after October 1, 1947, to any employer prior to the time of its admission into the retirement system for which member and employer contributions, plus interest as required by RCW 41.50.125, have been paid under RCW 41.40.056 or 41.40.057;

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

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

(14)(a) "Beneficiary" for plan 1 members, means any person in receipt of a retirement allowance, pension or other benefit provided by this chapter.

(b) "Beneficiary" for plan 2 and plan 3 members, means any person in receipt of a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer by another person.

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

(16) "Accumulated contributions" means the sum of all contributions standing to the credit of a member in the member's individual account, including any amount paid under RCW 41.50.165(2), together with the regular interest thereon.

(17)(a) "Average final compensation" for plan 1 members, means the annual average of the greatest compensation earnable by a member during any consecutive two year period of service credit months for which service credit is allowed; or if the member has less than two years of service credit months then the annual average compensation earnable during the total years of service for which service credit is allowed.

(b) "Average final compensation" for plan 2 and plan 3 members, means the member's average compensation earnable of the highest consecutive sixty months of service credit months prior to such member's retirement, termination, or death. Periods constituting authorized leaves of absence may not be used in the calculation of average final compensation except under RCW 41.40.710(2).

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

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

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

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

(22) "Employee" or "employed" means a person who is providing services for compensation to an employer, unless the person is free from the employer's direction and control over the performance of work. The department shall adopt rules and interpret this subsection consistent with common law.

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

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

(25) "Eligible position" means:

(a) Any position that, as defined by the employer, normally requires five or more months of service a year for which regular compensation for at least seventy hours is earned by the occupant thereof. For purposes of this chapter an employer shall not define "position" in such a manner that an employee's monthly work for that employer is divided into more than one position;

(b) Any position occupied by an elected official or person appointed directly by the governor, or appointed by the chief justice of the supreme court under RCW 2.04.240(2) or 2.06.150(2), for which compensation is paid.

(26) "Ineligible position" means any position which does not conform with the requirements set forth in subsection (25) of this section.

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

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

(29) "Retiree" means any person who has begun accruing a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer while a member.

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

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

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

(33) "Plan 1" means the public employees' retirement system, plan 1 providing the benefits and funding provisions covering persons who first became members of the system prior to October 1, 1977.

(34) "Plan 2" means the public employees' retirement system, plan 2 providing the benefits and funding provisions covering persons who first became members of the system on and after October 1, 1977, and are not included in plan 3.

(35) "Plan 3" means the public employees' retirement system, plan 3 providing the benefits and funding provisions covering persons who:

(a) First become a member on or after:

(i) March 1, 2002, and are employed by a state agency or institute of higher education and who did not choose to enter plan 2; or

(ii) September 1, 2002, and are employed by other than a state agency or institute of higher education and who did not choose to enter plan 2; or

(b) Transferred to plan 3 under section 304 of this act.

(36) "Index" means, for any calendar year, that year's annual average consumer price index, Seattle, Washington area, for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor.

(((36))) (37) "Index A" means the index for the year prior to the determination of a postretirement adjustment.

(((37))) (38) "Index B" means the index for the year prior to index A.

(((38))) (39) "Index year" means the earliest calendar year in which the index is more than sixty percent of index A.

(((39))) (40) "Adjustment ratio" means the value of index A divided by index B.

(((40))) (41) "Annual increase" means, initially, fifty-nine cents per month per year of service which amount shall be increased each July 1st by three percent, rounded to the nearest cent.

(((41))) (42) "Separation from service" occurs when a person has terminated all employment with an employer.

(43) "Member account" or "member's account" for purposes of plan 3 means the sum of the contributions and earnings on behalf of the member in the defined contribution portion of plan 3.

Sec. 103. RCW 41.40.042 and 1991 c 35 s 89 are each amended to read as follows:

The deductions from the compensation of members, provided for in RCW 41.40.330 ((or 41.40.650)), 41.45.060, 41.45.061, or section 507 of this act, shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions made and provided for in this chapter and receipt in full for his or her salary or compensation, and payment less the deductions shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by the person during the period covered by the payment, except as to benefits provided for under this chapter.

Sec. 104. RCW 41.40.054 and 1997 c 103 s 3 are each amended to read as follows:

A member shall not receive a disability retirement benefit under RCW 41.40.200, 41.40.220, 41.40.230, 41.40.235, 41.40.250, ((or)) 41.40.670, or section 310 of this act if the disability is the result of criminal conduct by the member committed after April 21, 1997.

Sec. 105. RCW 41.40.057 and 1995 c 286 s 3 are each amended to read as follows:

(1) This section applies to the establishment of membership service with employers admitted to the retirement system after July 23, 1995.

(2) For current employees, membership service may be established for periods of employment with an employer prior to the employer's admission into the retirement system by making the payments required by this section.

The employer must select one of the options in this subsection and apply it uniformly, except as provided in subsection (3) of this section. The required payment shall include the total member and employer contributions that would have been required from the date of each current member's hire.

(a) Option A: The employer makes all the required payments within fifteen years from the date of the employer's admission.

(b) Option B: The employer makes a portion of the required payments and the member pays the balance. The employer shall not be required to make its payments until the member has made his or her payments. Each member shall have the option to purchase the membership service.

(c) Option C: The member makes all of the required payments. Each member shall have the option to purchase the membership service.

All payments under options B and C of this subsection must be completed within five years from the date of the employer's admission, or prior to the retirement of the member, whichever occurs sooner. A member may not receive membership service credit under option B or C of this subsection until all required payments have been made.

(3) An employer shall not be required to purchase membership service under option A or B for periods of employment for which the employer made contributions to a qualified retirement plan as defined by 26 U.S.C. Sec. 401(a), if the contributions plus interest accrued cannot be transferred to the retirement system. If the employer does not purchase the membership credit under this subsection, the member may purchase the membership service under subsection (2)(c) of this section.

(4) A former employee who is an active member of the system and is not covered by subsection (2) of this section may establish membership service by making the required payments under subsection (2)(c) of this section prior to the retirement of the member.

(5) All payments made by the member under this section shall be placed in the member's individual account in the members' savings fund or the member's account for those members entering plan 3.

Sec. 106. RCW 41.40.062 and 1998 c 341 s 602 are each amended to read as follows:

(1) The members and appointive and elective officials of any political subdivision or association of political subdivisions of the state may become members of the retirement system by the approval of the local legislative authority.

(2) On and after September 1, 1965, every school district of the state of Washington shall be an employer under this chapter. Every member of each school district who is eligible for membership under RCW 41.40.023 shall be a member of the retirement system and participate on the same basis as a person who first becomes a member through the admission of any employer into the retirement system on and after April 1, 1949, except that after August 31, 2000, school districts will no longer be employers for the public employees' retirement system plan 2 or plan 3.

Sec. 107. RCW 41.40.088 and 1998 c 341 s 603 are each amended to read as follows:

(1) A plan 1 member who is employed by a school district or districts, an educational service district, the state school for the deaf, the state school for the blind, institutions of higher education, or community colleges:

(a) Shall receive a service credit month for each month of the period from September through August of the following year if he or she is employed in an eligible position, earns compensation earnable for six hundred thirty hours or more during that period, and is employed during nine months of that period, except that a member may not receive credit for any period prior to the member's employment in an eligible position;

(b) If a member in an eligible position does not meet the requirements of (a) of this subsection, the member is entitled to a service credit month for each month of the period he or she earns earnable compensation for seventy or more hours; and the member is entitled to a one-quarter service credit month for those calendar months during which he or she earned compensation for less than seventy hours.

(2) Except for any period prior to the member's employment in an eligible position, a plan 2 or plan 3 member who is employed by a school district or districts, an educational service district, the state school for the blind, the state school for the deaf, institutions of higher education, or community colleges:

(a) Shall receive a service credit month for each month of the period from September through August of the following year if he or she is employed in an eligible position, earns compensation earnable for eight hundred ten hours or more during that period, and is employed during nine months of that period;

(b) If a member in an eligible position for each month of the period from September through August of the following year does not meet the hours requirements of (a) of this subsection, the member is entitled to one-half service credit month for each month of the period if he or she earns earnable compensation for at least six hundred thirty hours but less than eight hundred ten hours during that period, and is employed nine months of that period.

(i) One service credit month for each month in which compensation is earned for ninety or more hours;

(ii) One-half service credit month for each month in which compensation is earned for at least seventy hours but less than ninety hours; and

(iii) One-quarter service credit month for each month in which compensation is earned for less than seventy hours.

(d) After August 31, 2000, school districts and educational service districts will no longer be employers for the public employees' retirement system plan 2 or plan 3.

(3) The department shall adopt rules implementing this section.

Sec. 108. RCW 41.40.092 and 1983 c 81 s 3 are each amended to read as follows:

(1) Active members of the Washington state patrol retirement system who have previously established service credit in the public employees' retirement system, plan 1 or plan 2 while employed by the state patrol as a cadet as defined in RCW 43.43.120(6)(b) may have such service credit transferred to the state patrol retirement system subject to the terms and conditions specified in chapter 43.43 RCW, including reestablishment of such service for the sole purpose of transfer. Service reestablishment shall be subject to the interest requirements of RCW 41.40.150(2).

(2) Service credit established for employment other than that specified in subsection (1) of this section is not eligible for transfer.

NEW SECTION. Sec. 109. RCW 41.40.094 is decodified.

"PUBLIC EMPLOYEES' RETIREMENT SYSTEM PLAN 2"

Sec. 201. RCW 41.40.610 and 1991 c 35 s 97 are each amended to read as follows:

RCW 41.40.620 through ((41.40.740)) 41.40.750 shall apply only to plan 2 members.

NEW SECTION. Sec. 202. RCW 41.40.650 (Employer and member contributions) and 1989 c 273 s 24, 1986 c 268 s 6, 1984 c 184 s 12, & 1977 ex.s. c 295 s 6 are each repealed.

"PUBLIC EMPLOYEES' RETIREMENT SYSTEM PLAN 3"

NEW SECTION. Sec. 301. (1) Sections 301 through 316 of this act apply only to plan 3 members.

(2) Plan 3 consists of two separate elements: (a) A defined benefit portion covered under this subchapter; and (b) a defined contribution portion covered under chapter 41.34 RCW.

(3) Unless otherwise specified, all references to "plan 3" in this subchapter refer to the defined benefit portion of plan 3.

NEW SECTION. Sec. 302. (1) All employees who first become employed by an employer in an eligible position on or after March 1, 2002, for state agencies or institutes of higher education, or September 1, 2002, for other employers, shall have a period of ninety days to make an irrevocable choice to become a member of plan 2 or plan 3. At the end of ninety days, if the member has not made a choice to become a member of plan 2, he or she becomes a member of plan 3.

(2) For administrative efficiency, until a member elects to become a member of plan 3, or becomes a member of plan 3 by default pursuant to subsection (1) of this section, the member shall be reported to the department in plan 2, with member and employer contributions. Upon becoming a member of plan 3 by election or by default, all service credit shall be transferred to the member's plan 3 defined benefit, and all employee accumulated contributions shall be transferred to the member's plan 3 defined contribution account.

NEW SECTION. Sec. 303. (1) A member of the retirement system shall receive a retirement allowance equal to one percent of such member's average final compensation for each service credit year.

(2) The retirement allowance payable under section 309 of this act to a member who separates after having completed at least twenty service credit years shall be increased by twenty-five one-hundredths of one percent, compounded for each month from the date of separation to the date that the retirement allowance commences.

NEW SECTION. Sec. 304. (1) As used in this section, unless the context clearly requires otherwise:

(a) "Transfer period" means the time during which a member of one of the groups of plan 2 members identified in subsection (2) of this section may choose to irrevocably transfer from plan 2 to plan 3.

(b) "Transfer basis" means the accumulated contributions present in a member's savings fund on March 1, 2002, less fifty percent of any contributions made pursuant to RCW 41.50.165(2), which is the basis for calculation of the plan 2 to plan 3 additional transfer payment.

(c) "Additional transfer payment date" means June 1, 2003, the date of the additional transfer payment made according to subsection (6) of this section.

(2) Every plan 2 member employed by an employer in an eligible position has the option during their transfer period to make an irrevocable transfer to plan 3 according to the following schedule:

(a) For those members employed by state agencies and institutes of higher education the transfer period means the period between March 1, 2002, and September 1, 2002.

(b) For those members employed by other organizations the transfer period means the period between September 1, 2002, and June 1, 2003.

(c) For those members employed by more than one employer within the retirement system, and whose transfer period is different between one employer and another, the member's transfer period is the last period that is available from any of that member's employers within the retirement system.

(3) All service credit in plan 2 shall be transferred to the defined benefit portion of plan 3.

(4)(a) Anyone who first became a state or higher education member of plan 2 before March 1, 2002, or a local government member of plan 2 before September 1, 2002, who wishes to transfer to plan 3 after their transfer period may transfer during the month of January in any following year, provided that the member earns service credit for that month.

(b) Anyone who chose to become a state or higher education member of plan 2 on or after March 1, 2002, or a local government member of plan 2 on or after September 1, 2002, is prohibited from transferring to plan 3 under (a) of this subsection.

(5) The accumulated contributions in plan 2, less fifty percent of any contributions made pursuant to RCW 41.50.165(2) shall be transferred to the member's account in the defined contribution portion established in chapter 41.34 RCW, pursuant to procedures developed by the department and subject to RCW 41.34.090. Contributions made pursuant to RCW 41.50.165(2) that are not transferred to the member's account shall be transferred to the fund created in RCW 41.50.075(3), except that interest earned on all such contributions shall be transferred to the member's account.

(6) Anyone who requests to transfer under this section during their transfer period, and establishes service credit for February 2003, shall have their member account:

(a) If a member's transfer period is that described in subsection (2)(a) of this section, increased by one hundred ten percent of the transfer basis;

(b) If a member's transfer period is that described in subsection (2)(b) of this section, increased by one hundred eleven percent of the transfer basis; and

(7) If a member who requests to transfer dies before June 1, 2003, the additional payment provided by this section shall be paid to the member's estate, or the person or persons, trust, or organization the member nominated by written designation duly executed and filed with the department.

(8) Anyone previously retired from plan 2 is prohibited from transferring to plan 3.

(9) The legislature reserves the right to discontinue the right to transfer under this section and to modify and to discontinue the right to an additional payment under this section for any plan 2 members who have not previously transferred to plan 3.

NEW SECTION. Sec. 305. Any member or beneficiary eligible to receive a retirement allowance under the provisions of section 309, 310, or 312 of this act is eligible to commence receiving a retirement allowance after having filed written application with the department.

(1) Retirement allowances paid to members shall accrue from the first day of the calendar month immediately following such member's separation from employment.

(2) Retirement allowances payable to eligible members no longer in service, but qualifying for such an allowance pursuant to RCW 41.40.068 shall accrue from the first day of the calendar month immediately following such qualification.

(3) Disability allowances paid to disabled members shall accrue from the first day of the calendar month immediately following such member's separation from employment for disability.

(4) Retirement allowances paid as death benefits shall accrue from the first day of the calendar month immediately following the member's death.

NEW SECTION. Sec. 306. (1) A member who is on a paid leave of absence authorized by a member's employer shall continue to receive service credit.

(2) A member who receives compensation from an employer while on an authorized leave of absence to serve as an elected official of a labor organization, and whose employer is reimbursed by the labor organization for the compensation paid to the member during the period of absence, may also be considered to be on a paid leave of absence. This subsection shall only apply if the member's leave of absence is authorized by a collective bargaining agreement that provides that the member retains seniority rights with the employer during the period of leave. The earnable compensation reported for a member who establishes service credit under this subsection may not be greater than the salary paid to the highest paid job class covered by the collective bargaining agreement.

(3) Except as specified in subsection (4) of this section, a member shall be eligible to receive a maximum of two years service credit during a member's entire working career for those periods when a member is on an unpaid leave of absence authorized by an employer. Such credit may be obtained only if:

(a) The member makes the contribution on behalf of the employer, plus interest, as determined by the department; and

(b) The member makes the employee contribution, plus interest, as determined by the department, to the defined contribution portion.

The contributions required shall be based on the average of the member's earnable compensation at both the time the authorized leave of absence was granted and the time the member resumed employment.

(4) A member who leaves the employ of an employer to enter the armed forces of the United States shall be entitled to retirement system service credit for up to five years of military service if within ninety days of the member's honorable discharge from the United States armed forces, the member applies for reemployment with the employer who employed the member immediately prior to the member entering the United States armed forces. This subsection shall be administered in a manner consistent with the requirements of the federal uniformed services employment and reemployment rights act.

The department shall establish the member's service credit and shall bill the employer for its contribution required under RCW 41.45.060 and section 507 of this act for the period of military service, plus interest as determined by the department. Service credit under this subsection may be obtained only if the member makes the employee contribution to the defined contribution portion as determined by the department.

The contributions required shall be based on the compensation the member would have earned if not on leave, or if that cannot be estimated with reasonable certainty, the compensation reported for the member in the year prior to when the member went on military leave.

NEW SECTION. Sec. 307. (1) Contributions on behalf of the employer paid by the employee to purchase plan 3 service credit shall be allocated to the defined benefit portion of plan 3 and shall not be refundable when paid to the fund described in RCW 41.50.075(3). Contributions on behalf of the employee shall be allocated to the member account. If the member fails to meet the statutory time limitations to purchase plan 3 service credit, it may be purchased under the provisions of RCW 41.50.165(2). One-half of the purchase payments under RCW 41.50.165(2), plus interest, shall be allocated to the member's account.

(2) No purchased plan 3 membership service may be credited until all payments required of the member are made, with interest. Upon receipt of all payments owed by the member, the department shall bill the employer for any contributions, plus interest, required to purchase membership service.

NEW SECTION. Sec. 308. (1) The director may pay a member eligible to receive a retirement allowance or the member's beneficiary a lump sum payment in lieu of a monthly benefit if the initial monthly benefit would be less than one hundred dollars. The one hundred dollar limit shall be increased annually as determined by the director. The lump sum payment shall be the actuarial equivalent of the monthly benefit.

(2) Persons covered under the provisions of subsection (1) of this section may upon returning to member status reinstate all previous service by depositing the lump sum payment received, with interest as computed by the director, within two years of returning to service or prior to retiring again, whichever comes first. In computing the amount due, the director shall exclude the accumulated value of the normal payments the member would have received while in beneficiary status if the lump sum payment had not occurred.

(3) Any member who receives a settlement under this section is deemed to be retired from this system.

NEW SECTION. Sec. 309. (1) NORMAL RETIREMENT. Any member who is at least age sixty-five and who has:

(a) Completed ten service credit years; or

(b) Completed five service credit years, including twelve service credit months after attaining age fifty-four; or

(c) Completed five service credit years by the transfer payment date specified in section 304 of this act, under the public employees' retirement system plan 2 and who transferred to plan 3 under section 304 of this act;

shall be eligible to retire and to receive a retirement allowance computed according to the provisions of section 303 of this act.

(2) EARLY RETIREMENT. Any member who has attained at least age fifty-five and has completed at least ten years of service shall be eligible to retire and to receive a retirement allowance computed according to the provisions of section 303 of this act, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least thirty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of section 303 of this act, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

NEW SECTION. Sec. 310. (1) A member of the retirement system who becomes totally incapacitated for continued employment by an employer as determined by the department shall be eligible to receive an allowance under the provisions of plan 3. The member shall receive a monthly disability allowance computed as provided for in section 303 of this act and shall have this allowance actuarially reduced to reflect the difference in the number of years between age at disability and the attainment of age sixty-five.

Any member who receives an allowance under the provisions of this section shall be subject to comprehensive medical examinations as required by the department. If these medical examinations reveal that a member has recovered from the incapacitating disability and the member is offered reemployment by an employer at a comparable compensation, the member shall cease to be eligible for the allowance.

(2) If the recipient of a monthly retirement allowance under this section dies, any further benefit payments shall be conditioned by the payment option selected by the retiree as provided in section 314 of this act.

NEW SECTION. Sec. 311. (1) Any member who elects to transfer to plan 3 and has eligible unrestored withdrawn contributions in plan 2, may restore such contributions under the provisions of RCW 41.40.740 with interest as determined by the department. The restored plan 2 service credit will be automatically transferred to plan 3. Restoration payments will be transferred to the member account in plan 3. If the member fails to meet the time limitations of RCW 41.40.740, they may restore such contributions under the provisions of RCW 41.50.165(2). The restored plan 2 service credit will be automatically transferred to plan 3. One-half of the restoration payments under RCW 41.50.165(2) plus interest shall be allocated to the member's account.

(2) Any member who elects to transfer to plan 3 may purchase plan 2 service credit under RCW 41.40.740. Purchased plan 2 service credit will be automatically transferred to plan 3. Contributions on behalf of the employer paid by the employee shall be allocated to the defined benefit portion of plan 3 and shall not be refundable when paid to the fund described in RCW 41.50.075(3). Contributions on behalf of the employee shall be allocated to the member account. If the member fails to meet the time limitations of RCW 41.40.740, they may subsequently restore such contributions under the provisions of RCW 41.50.165(2). Purchased plan 2 service credit will be automatically transferred to plan 3. One-half of the payments under RCW 41.50.165(2), plus interest, shall be allocated to the member's account.

NEW SECTION. Sec. 312. If a member dies prior to retirement, the surviving spouse or eligible child or children shall receive a retirement allowance computed as provided in section 303 of this act actuarially reduced to reflect a joint and one hundred percent survivor option and if the member was not eligible for normal retirement at the date of death a further reduction as described in section 309 of this act.

If the surviving spouse who is receiving the retirement allowance dies leaving a child or children under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority.

If there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance, share and share alike. The allowance shall be calculated with the assumption that the age of the spouse and member were equal at the time of the member's death.

NEW SECTION. Sec. 313. Beginning July 1, 1979, and every year thereafter, the department shall determine the following information for each retired member or beneficiary whose retirement allowance has been in effect for at least one year:

(1) The original dollar amount of the retirement allowance;

(2) The index for the calendar year prior to the effective date of the retirement allowance, to be known as "index A";

(3) The index for the calendar year prior to the date of determination, to be known as "index B"; and

(4) The ratio obtained when index B is divided by index A.

The value of the ratio obtained shall be the annual adjustment to the original retirement allowance and shall be applied beginning with the July payment. In no event, however, shall the annual adjustment:

(a) Produce a retirement allowance which is lower than the original retirement allowance;

(b) Exceed three percent in the initial annual adjustment; or

For the purposes of this section, "index" means, for any calendar year, that year's average consumer price index--Seattle, Washington area for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor.

NEW SECTION. Sec. 314. (1) Upon retirement for service as prescribed in section 309 of this act or retirement for disability under section 310 of this act, a member shall elect to have the retirement allowance paid pursuant to one of the following options, calculated so as to be actuarially equivalent to each other.

(a) Standard allowance. A member electing this option shall receive a retirement allowance payable throughout such member's life. However, if the retiree dies before the total of the retirement allowance paid to such retiree equals the amount of such retiree's accumulated contributions at the time of retirement, then the balance shall be paid to the member's estate, or such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or if there be no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or if there be neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

(b) The department shall adopt rules that allow a member to select a retirement option that pays the member a reduced retirement allowance and upon death, such portion of the member's reduced retirement allowance as the department by rule designates shall be continued throughout the life of and paid to a person nominated by the member by written designation duly executed and filed with the department at the time of retirement. The options adopted by the department shall include, but are not limited to, a joint and one hundred percent survivor option and a joint and fifty percent survivor option.

(2)(a) A member, if married, must provide the written consent of his or her spouse to the option selected under this section, except as provided in (b) of this subsection. If a member is married and both the member and the member's spouse do not give written consent to an option under this section, the department shall pay a joint and fifty percent survivor benefit calculated to be actuarially equivalent to the benefit options available under subsection (1) of this section unless spousal consent is not required as provided in (b) of this subsection.

(b) If a copy of a dissolution order designating a survivor beneficiary under RCW 41.50.790 has been filed with the department at least thirty days prior to a member's retirement:

(i) The department shall honor the designation as if made by the member under subsection (1) of this section; and

(ii) The spousal consent provisions of (a) of this subsection do not apply.

NEW SECTION. Sec. 315. (1) Except as provided in RCW 41.40.037, no retiree under the provisions of plan 3 shall be eligible to receive such retiree's monthly retirement allowance if he or she is employed in an eligible position as defined in RCW 41.40.010, 41.32.010, or 41.35.010, or as a law enforcement officer or fire fighter as defined in RCW 41.26.030, except that a retiree who ends his or her membership in the retirement system pursuant to RCW 41.40.023(3)(b) is not subject to this section if the retiree's only employment is as an elective official of a city or town.

(2) If a retiree's benefits have been suspended under this section, his or her benefits shall be reinstated when the retiree terminates the employment that caused his or her benefits to be suspended. Upon reinstatement, the retiree's benefits shall be actuarially recomputed pursuant to the rules adopted by the department.

(3) The department shall adopt rules implementing this section.

NEW SECTION. Sec. 316. The benefits provided pursuant to chapter . . ., Laws of 2000 (this act) are not provided to employees as a matter of contractual right prior to March 1, 2002. The legislature retains the right to alter or abolish these benefits at any time prior to March 1, 2002.

NEW SECTION. Sec. 317. Sections 301 through 316 of this act are each added to chapter 41.40 RCW and codified with the subchapter heading "PLAN 3."

"DEFINED CONTRIBUTION"

Sec. 401. RCW 41.34.020 and 1998 c 341 s 301 are each amended to read as follows:

As used in this chapter, the following terms have the meanings indicated:

(1) "Actuary" means the state actuary or the office of the state actuary.

(2) "Board" means the employee retirement benefits board authorized in chapter 41.50 RCW.

(3) "Department" means the department of retirement systems.

(4)(a) "Compensation" for teachers for purposes of this chapter is the same as "earnable compensation" for plan 3 in chapter 41.32 RCW except that the compensation may be reported when paid, rather than when earned.

(b) "Compensation" for classified employees for purposes of this chapter is the same as "compensation earnable" for plan 3 in RCW 41.35.010, except that the compensation may be reported when paid, rather than when earned.

(c) "Compensation" for public employees for purposes of this chapter is the same as "compensation earnable" for plan 3 in RCW 41.40.010, except that the compensation may be reported when paid, rather than when earned.

(5)(a) "Employer" for teachers for purposes of this chapter means the same as "employer" for plan 3 in chapter 41.32 RCW.

(b) "Employer" for classified employees for purposes of this chapter means the same as "employer" for plan 3 in RCW 41.35.010.

(c) "Employer" for public employees for purposes of this chapter means the same as "employer" for plan 3 in RCW 41.40.010.

(6) "Member" means any employee included in the membership of a retirement system as provided for in chapter 41.32 RCW of plan 3 ((or)), chapter 41.35 RCW of plan 3, or chapter 41.40 RCW of plan 3.

(7) "Member account" or "member's account" means the sum of the contributions and earnings on behalf of the member.

(8) "Retiree" means any member in receipt of an allowance or other benefit provided by this chapter resulting from service rendered to an employer by such member.

(9) "Teacher" means a member of the teachers' retirement system plan 3 as defined in RCW 41.32.010(29).

(10) "Classified employee" means a member of the school employees' retirement system plan 3 as defined in RCW 41.35.010.

(11) "Public employee" means a member of the public employees' retirement system plan 3 as defined in RCW 41.40.010.

Sec. 402. RCW 41.34.030 and 1998 c 341 s 302 are each amended to read as follows:

(1) This chapter applies only to members of plan 3 retirement systems created under chapters 41.32 ((and)), 41.35, and 41.40 RCW.

(2) Plan 3 consists of two separate elements:

(a) A defined benefit portion covered under:

(i) Sections 101 through 117, chapter 239, Laws of 1995; or

(ii) Sections 1 through 25 and 201 through 213, chapter 341, Laws of 1998; or

(iii) Sections 101 through 316, chapter . . ., Laws of 2000 (sections 101 through 316 of this act); and

(b) A defined contribution portion covered under this chapter. Unless specified otherwise, all references to "plan 3" in this chapter refer to the defined contribution portion of plan 3.

Sec. 403. RCW 41.34.040 and 1996 c 39 s 14 are each amended to read as follows:

(1) A member shall contribute from his or her compensation according to one of the following rate structures:

Option A Contribution Rate

All Ages 5.0% fixed

Option B

Up to Age 35 5.0%

Age 35 to 44 6.0%

Age 45 and above 7.5%

Option C

Up to Age 35 6.0%

Age 35 to 44 7.5%

Age 45 and above 8.5%

(2) The board shall have the right to offer contribution rate options in addition to those listed in subsection (1) of this section, provided that no significant additional administrative costs are created. All options offered by the board shall conform to the requirements stated in subsections (3) and (4) of this section.

(3)(a) For members of the teachers' retirement system entering plan 3 under RCW 41.32.835 or members of the school employees' retirement system entering plan 3 under RCW 41.35.610, within ninety days of becoming a member he or she has an irrevocable option to choose one of the above contribution rate structures. If the member does not select an option within the ninety-day period, he or she shall be assigned option A. Such assignment shall be irrevocable.

(b) For members of the public employees' retirement system entering plan 3 under section 302 of this act, within the ninety days described in section 302 an employee who irrevocably chooses plan 3 shall select one of the above contribution rate structures. If the member does not select an option within the ninety-day period, he or she shall be assigned option A. Such assignment shall be irrevocable.

(c) For members of the teachers' retirement system transferring to plan 3 under RCW 41.32.817, members of the school employees' retirement system transferring to plan 3 under RCW 41.35.510, or members of the public employees' retirement system transferring to plan 3 under section 304 of this act, upon election to plan 3 he or she must irrevocably choose one of the above contribution rate structures.

(d) Within ninety days of the date that an employee ((becomes a member of plan III or)) changes employers, he or she has an irrevocable option to choose one of the above contribution rate structures. If the member does not select an option within this ninety-day period, he or she shall be assigned option A. Such assignment shall be irrevocable.

(4) Contributions shall begin the first day of the pay cycle in which the rate option is made, or the first day of the pay cycle in which the end of the ninety-day period occurs.

Sec. 404. RCW 41.34.060 and 1999 c 265 s 1 are each amended to read as follows:

(1) Except as provided in subsection (3) of this section, the member's account shall be invested by the state investment board. In order to reduce transaction costs and address liquidity issues, based upon recommendations of the state investment board, the department may require members to provide up to ninety days' notice prior to moving funds from the state investment board portfolio to self-directed investment options provided under subsection (3) of this section.

(a) For members of the retirement system as provided for in chapter 41.32 RCW of plan 3, investment shall be in the same portfolio as that of the teachers' retirement system combined plan 2 and 3 fund under RCW 41.50.075(2).

(b) For members of the retirement system as provided for in chapter 41.35 RCW of plan 3, investment shall be in the same portfolio as that of the school employees' retirement system combined plan 2 and 3 fund under RCW 41.50.075(4).

(c) For members of the retirement system as provided for in chapter 41.40 RCW of plan 3, investment shall be in the same portfolio as that of the public employees' retirement system combined plan 2 and 3 fund under RCW 41.50.075(3).

(2) The state investment board shall declare monthly unit values for the portfolios or funds, or portions thereof, utilized under subsection (1)(a) and (b) of this section. The declared values shall be an approximation of portfolio or fund values, based on internal procedures of the state investment board. Such declared unit values and internal procedures shall be in the sole discretion of the state investment board. The state investment board may delegate any of the powers and duties under this subsection, including discretion, pursuant to RCW 43.33A.030. Member accounts shall be credited by the department with a rate of return based on changes to such unit values.

(3) Members may elect to self-direct their investments as set forth in RCW 41.34.130 and 43.33A.190.

Sec. 405. RCW 41.34.080 and 1998 c 341 s 304 are each amended to read as follows:

(1) Subject to subsections (2) and (3) of this section, the right of a person to a pension, an annuity, a retirement allowance, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the various funds created by chapter 239, Laws of 1995((, and)); chapter 341, Laws of 1998; and chapter . . ., Laws of 2000 (this act) and all moneys and investments and income thereof, is hereby exempt from any state, county, municipal, or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, and shall be unassignable.

(2) This section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions and that has been approved for deduction in accordance with rules that may be adopted by the state health care authority and/or the department. This section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of dues and other membership fees to any retirement association or organization the membership of which is composed of retired public employees, if a total of three hundred or more of such retired employees have authorized such deduction for payment to the same retirement association or organization.

(3) Subsection (1) of this section shall not prohibit the department from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a notice of payroll deduction issued pursuant to RCW 26.23.060, (d) a mandatory benefits assignment order issued by the department, (e) a court order directing the department to pay benefits directly to an obligee under a dissolution order as defined in RCW 41.50.500(3) which fully complies with RCW 41.50.670 and 41.50.700, or (f) any administrative or court order expressly authorized by federal law.

Sec. 406. RCW 41.34.100 and 1998 c 341 s 305 are each amended to read as follows:

(1) The benefits provided pursuant to chapter 239, Laws of 1995 are not provided to employees as a matter of contractual right prior to July 1, 1996. The legislature retains the right to alter or abolish these benefits at any time prior to July 1, 1996.

(2) The benefits provided pursuant to chapter 341, Laws of 1998 are not provided to employees as a matter of contractual right prior to September 1, 2000. The legislature retains the right to alter or abolish these benefits at any time prior to September 1, 2000.

(3) The benefits provided pursuant to chapter . . ., Laws of 2000 (this act) are not provided to employees as a matter of contractual right prior to March 1, 2002. The legislature retains the right to alter or abolish these benefits at any time prior to March 1, 2002.

"GAIN SHARING"

Sec. 407. RCW 41.31A.010 and 1998 c 341 s 311 are each amended to read as follows:

The definitions in this section apply throughout this chapter unless the context requires otherwise.

(1) "Actuary" means the state actuary or the office of the state actuary.

(2) "Department" means the department of retirement systems.

(3) "Teacher" means any employee included in the membership of the teachers' retirement system as provided for in chapter 41.32 RCW.

(4) "Member account" or "member's account" means the sum of any contributions as provided for in chapter 41.34 RCW and the earnings on behalf of the member.

(5) "Classified employee" means the same as in RCW 41.35.010.

(6) "Public employee" means the same as "member" as defined in RCW 41.40.010(5).

Sec. 408. RCW 41.31A.020 and 1998 c 341 s 312 are each amended to read as follows:

(1) On January 1, ((2002)) 2004, and on January 1st of even-numbered years thereafter, the member account of a person meeting the requirements of this section shall be credited by the extraordinary investment gain amount.

(2) The following persons shall be eligible for the benefit provided in subsection (1) of this section:

(a) Any member of the teachers' retirement system plan 3 ((or)), the Washington school employees' retirement system plan 3, or the public employees' retirement system plan 3 who earned service credit during the twelve-month period from September 1st to August 31st immediately preceding the distribution and had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution; or

(b) Any person in receipt of a benefit pursuant to RCW 41.32.875 ((or)), 41.35.680, or section 309 of this act; or

(i) Completed ten service credit years; or

(ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

(d) Any teacher who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by July 1, 1996, under plan 2 and who transferred to plan 3 under RCW 41.32.817; or

(e) Any classified employee who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by September 1, 2000, and who transferred to plan 3 under RCW 41.35.510; or

(f) Any public employee who is a retiree pursuant to RCW 41.40.010(29) and who has completed five service credit years by March 1, 2002, and who transferred to plan 3 under section 304 of this act; or

(g) Any person who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who:

(i) Completed ten service credit years; or

(ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

(((g))) (h) Any teacher who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by July 1, 1996, under plan 2 and who transferred to plan 3 under RCW 41.32.817; or

(((h))) (i) Any classified employee who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by September 1, 2000, and who transferred to plan 3 under RCW 41.35.510; or

(j) Any public employee who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by March 1, 2002, and who transferred to plan 3 under section 304 of this act.

(3) The extraordinary investment gain amount shall be calculated as follows:

(a) One-half of the sum of the value of the net assets held in trust for pension benefits in the teachers' retirement system combined plan 2 and 3 fund ((and)), the Washington school employees' retirement system combined plan 2 and 3 fund, and the public employees' retirement system combined plan 2 and 3 fund at the close of the previous state fiscal year not including the amount attributable to member accounts;

(b) Multiplied by the amount which the compound average of investment returns on those assets over the previous four state fiscal years exceeds ten percent;

(i) The sum of the service credit on August 31st of the previous year of all persons eligible for the benefit provided in subsection (1) of this section; to

(ii) The sum of the service credit on August 31st of the previous year of:

(A) All persons eligible for the benefit provided in subsection (1) of this section;

(B) Any person who earned service credit in the teachers' retirement system plan 2 ((or)), the Washington school employees' retirement system plan 2, or the public employees' retirement system plan 2 during the twelve-month period from September 1st to August 31st immediately preceding the distribution;

(D) Any person with five or more years of service in the teachers' retirement system plan 2 ((or)), the Washington school employees' retirement system plan 2, or the public employees' retirement system plan 2;

(d) Divided proportionally among persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on August 31st of the previous year.

(4) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to receive this distribution not granted prior to that time.

NEW SECTION. Sec. 409. A new section is added to chapter 41.31A RCW to read as follows:

(1) On June 1, 2003, the member account of a person meeting the requirements of this section shall be credited by the 2000 retroactive extraordinary investment gain amount and the 2002 retroactive extraordinary investment gain amount.

(2) The following persons shall be eligible for the benefits provided in subsection (1) of this section:

(a) Any public employee who earned service credit during the twelve-month period from September 1st to August 31st immediately preceding the distribution and who transferred to plan 3 under section 304 of this act; or

(b) Any public employee in receipt of a benefit pursuant to section 309 of this act and who has completed five service credit years by September 1, 2002, and who transferred to plan 3 under section 304 of this act; or

(c) Any public employee who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by September 1, 2002, and who transferred to plan 3 under section 304 of this act; or

(d) Any public employee who has a balance of at least one thousand dollars in either his or her member account or in plan 2 accumulated contributions and who has completed five service credit years by September 1, 2002, and who transferred to plan 3 under section 304 of this act.

(3) The 2000 retroactive extraordinary investment gain amount shall be calculated as follows:

(a) An amount equal to the average benefit per year of service paid in 2000 to members of the teachers' retirement system plan 3 under section 309, chapter 341, Laws of 1998;

(b) Distributed to persons eligible for the benefit in subsection (1) of this section on the basis of their service credit total on July 1, 1999.

(4) The 2002 retroactive extraordinary investment gain amount shall be calculated as follows:

(a) An amount equal to the average benefit per year of service paid in 2002 to members of the teachers' retirement system plan 3 and the school employees' retirement system plan 3 under RCW 41.31A.020;

(b) Distributed to persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on July 1, 2001.

(5) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to receive this distribution not granted prior to that time.

"ACTUARIAL FUNDING"

Sec. 501. RCW 41.45.010 and 1998 c 341 s 401 are each amended to read as follows:

It is the intent of the legislature to provide a dependable and systematic process for funding the benefits provided to members and retirees of the public employees' retirement system, chapter 41.40 RCW; the teachers' retirement system, chapter 41.32 RCW; the law enforcement officers' and fire fighters' retirement system, chapter 41.26 RCW; the school employees' retirement system, chapter 41.35 RCW; and the Washington state patrol retirement system, chapter 43.43 RCW.

The funding process established by this chapter is intended to achieve the following goals:

(1) To continue to fully fund the public employees' retirement system plans 2 and 3, the teachers' retirement system plans 2 and 3, the school employees' retirement system plans 2 and 3, and the law enforcement officers' and fire fighters' retirement system plan 2 as provided by law;

(2) To fully amortize the total costs of the public employees' retirement system plan 1, the teachers' retirement system plan 1, and the law enforcement officers' and fire fighters' retirement system plan 1 not later than June 30, 2024;

(3) To establish predictable long-term employer contribution rates which will remain a relatively constant proportion of the future state budgets; and

(4) To fund, to the extent feasible, benefit increases for plan 1 members and all benefits for plan 2 and 3 members over the working lives of those members so that the cost of those benefits are paid by the taxpayers who receive the benefit of those members' service.

Sec. 502. RCW 41.45.020 and 1998 c 341 s 402 and 1998 c 283 s 1 are each reenacted and amended to read as follows:

As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

(1) "Council" means the pension funding council created in RCW 41.45.100.

(2) "Department" means the department of retirement systems.

(3) "Law enforcement officers' and fire fighters' retirement system plan 1" and "law enforcement officers' and fire fighters' retirement system plan 2" mean the benefits and funding provisions under chapter 41.26 RCW.

(4) "Public employees' retirement system plan 1," ((and)) "public employees' retirement system plan 2," and "public employees' retirement system plan 3" mean the benefits and funding provisions under chapter 41.40 RCW.

(5) "Teachers' retirement system plan 1," "teachers' retirement system plan 2," and "teachers' retirement system plan 3" mean the benefits and funding provisions under chapter 41.32 RCW.

(6) "School employees' retirement system plan 2" and "school employees' retirement system plan 3" mean the benefits and funding provisions under chapter 41.35 RCW.

(7) "Washington state patrol retirement system" means the retirement benefits provided under chapter 43.43 RCW.

(8) "Unfunded liability" means the unfunded actuarial accrued liability of a retirement system.

(9) "Actuary" or "state actuary" means the state actuary employed under chapter 44.44 RCW.

(10) "State retirement systems" means the retirement systems listed in RCW 41.50.030.

(11) "Work group" means the pension funding work group created in RCW 41.45.120.

(12) "Classified employee" means a member of the Washington school employees' retirement system plan 2 or plan 3 as defined in RCW 41.35.010.

(13) "Teacher" means a member of the teachers' retirement system as defined in RCW 41.32.010(15).

Sec. 503. RCW 41.45.050 and 1998 c 341 s 403 are each amended to read as follows:

(1) Employers of members of the public employees' retirement system, the teachers' retirement system, the school employees' retirement system, and the Washington state patrol retirement system shall make contributions to those systems based on the rates established in RCW 41.45.060 and 41.45.070.

(2) The state shall make contributions to the law enforcement officers' and fire fighters' retirement system based on the rates established in RCW 41.45.060 and 41.45.070. The state treasurer shall transfer the required contributions each month on the basis of salary data provided by the department.

(3) The department shall bill employers, and the state shall make contributions to the law enforcement officers' and fire fighters' retirement system, using the combined rates established in RCW 41.45.060 and 41.45.070 regardless of the level of pension funding provided in the biennial budget. Any member of an affected retirement system may, by mandamus or other appropriate proceeding, require the transfer and payment of funds as directed in this section.

(4) The contributions received for the public employees' retirement system shall be allocated between the public employees' retirement system plan 1 fund and the public employees' retirement system combined plan 2 and plan 3 fund as follows: The contributions necessary to fully fund the public employees' retirement system combined plan 2 and plan 3 employer contribution ((required by RCW 41.40.650)) shall first be deposited in the public employees' retirement system combined plan 2 and plan 3 fund. All remaining public employees' retirement system employer contributions shall be deposited in the public employees' retirement system plan 1 fund.

(5) The contributions received for the teachers' retirement system shall be allocated between the plan 1 fund and the combined plan 2 and plan 3 fund as follows: The contributions necessary to fully fund the combined plan 2 and plan 3 employer contribution shall first be deposited in the combined plan 2 and plan 3 fund. All remaining teachers' retirement system employer contributions shall be deposited in the plan 1 fund.

(6) The contributions received for the school employees' retirement system shall be allocated between the public employees' retirement system plan 1 fund and the school employees' retirement system combined plan 2 and plan 3 fund as follows: The contributions necessary to fully fund the combined plan 2 and plan 3 employer contribution shall first be deposited in the combined plan 2 and plan 3 fund. All remaining school employees' retirement system employer contributions shall be deposited in the public employees' retirement system plan 1 fund.

(7) The contributions received under RCW ((41.26.450)) 41.45.060, 41.45.061, and section 507 of this act for the law enforcement officers' and fire fighters' retirement system shall be allocated between the law enforcement officers' and fire fighters' retirement system plan 1 and the law enforcement officers' and fire fighters' retirement system plan 2 fund as follows: The contributions necessary to fully fund the law enforcement officers' and fire fighters' retirement system plan 2 employer contributions shall be first deposited in the law enforcement officers' and fire fighters' retirement system plan 2 fund. All remaining law enforcement officers' and fire fighters' retirement system employer contributions shall be deposited in the law enforcement officers' and fire fighters' retirement system plan 1 fund.

Sec. 504. RCW 41.45.060 and 1998 c 341 s 404, 1998 c 340 s 11, and 1998 c 283 s 6 are each reenacted and amended to read as follows:

(1) The state actuary shall provide actuarial valuation results based on the assumptions adopted under RCW 41.45.030.

(2) Not later than September 30, 1998, and every two years thereafter, consistent with the assumptions adopted under RCW 41.45.030, the council shall adopt and may make changes to:

(a) A basic state contribution rate for the law enforcement officers' and fire fighters' retirement system;

(b) Basic employer contribution rates for the public employees' retirement system ((plan 1)), the teachers' retirement system ((plan 1)), and the Washington state patrol retirement system to be used in the ensuing biennial period; and

(c) A basic employer contribution rate for the school employees' retirement system for funding the public employees' retirement system plan 1.

(3) The employer and state contribution rates adopted by the council shall be the level percentages of pay that are needed:

(a) To fully amortize the total costs of the public employees' retirement system plan 1, the teachers' retirement system plan 1, the law enforcement officers' and fire fighters' retirement system plan 1, and the unfunded liability of the Washington state patrol retirement system not later than June 30, 2024, except as provided in subsection (5) of this section; ((and))

(b) To also continue to fully fund the public employees' retirement system plans 2 and 3, the teachers' retirement system plans 2 and 3, the school employees' retirement system plans 2 and 3, and the law enforcement officers' and fire fighters' retirement system plan 2 in accordance with RCW ((41.40.650, 41.26.450,)) 41.45.061, section 507 of this act, and this section; and

(c) For the law enforcement officers' and fire fighters' system plan 2 the rate charged to employers, except as provided in RCW 41.26.450, shall be thirty percent of the cost of the retirement system and the rate charged to the state shall be twenty percent of the cost of the retirement system.

(4) The aggregate actuarial cost method shall be used to calculate a combined plan 2 and 3 employer contribution rate.

(5) An amount equal to the amount of extraordinary investment gains as defined in RCW 41.31.020 shall be used to shorten the amortization period for the public employees' retirement system plan 1 and the teachers' retirement system plan 1.

(6) The council shall immediately notify the directors of the office of financial management and department of retirement systems of the state and employer contribution rates adopted.

(7) The director of the department of retirement systems shall collect those rates adopted by the council.

Sec. 505. RCW 41.45.070 and 1998 c 341 s 406 and 1998 c 340 s 10 are each reenacted and amended to read as follows:

(1) In addition to the basic employer contribution rate established in RCW 41.45.060, the department shall also charge employers of public employees' retirement system, teachers' retirement system, school employees' retirement system, or Washington state patrol retirement system members an additional supplemental rate to pay for the cost of additional benefits, if any, granted to members of those systems. Except as provided in subsections (6) and (7) of this section, the supplemental contribution rates required by this section shall be calculated by the state actuary and shall be charged regardless of language to the contrary contained in the statute which authorizes additional benefits.

(2) In addition to the basic state contribution rate established in RCW 41.45.060 for the law enforcement officers' and fire fighters' retirement system the department shall also establish a supplemental rate to pay for the cost of additional benefits, if any, granted to members of the law enforcement officers' and fire fighters' retirement system. Except as provided in subsection (6) of this section, this supplemental rate shall be calculated by the state actuary and the state treasurer shall transfer the additional required contributions regardless of language to the contrary contained in the statute which authorizes the additional benefits.

(3) The supplemental rate charged under this section to fund benefit increases provided to active members of the public employees' retirement system plan 1, the teachers' retirement system plan 1, the law enforcement officers' and fire fighters' retirement system plan 1, and Washington state patrol retirement system, shall be calculated as the level percentage of all members' pay needed to fund the cost of the benefit not later than June 30, 2024.

(4) The supplemental rate charged under this section to fund benefit increases provided to active and retired members of the public employees' retirement system plan 2 and plan 3, the teachers' retirement system plan 2 and plan 3, the school employees' retirement system plan 2 and plan 3, or the law enforcement officers' and fire fighters' retirement system plan 2, shall be calculated as the level percentage of all members' pay needed to fund the cost of the benefit, as calculated under RCW ((41.40.650 or 41.26.450, respectively)) 41.45.060, 41.45.061, or section 507 of this act.

(5) The supplemental rate charged under this section to fund postretirement adjustments which are provided on a nonautomatic basis to current retirees shall be calculated as the percentage of pay needed to fund the adjustments as they are paid to the retirees. The supplemental rate charged under this section to fund automatic postretirement adjustments for active or retired members of the public employees' retirement system plan 1 and the teachers' retirement system plan 1 shall be calculated as the level percentage of pay needed to fund the cost of the automatic adjustments not later than June 30, 2024.

(6) A supplemental rate shall not be charged to pay for the cost of additional benefits granted to members pursuant to chapter 340, Laws of 1998.

(7) A supplemental rate shall not be charged to pay for the cost of additional benefits granted to members pursuant to chapter 41.31A RCW; section 309, chapter 341, Laws of 1998; or section 701, chapter 341, Laws of 1998.

Sec. 506. RCW 41.45.061 and 1998 c 341 s 405 are each amended to read as follows:

(1) The required contribution rate for members of the plan 2 teachers' retirement system shall be fixed at the rates in effect on July 1, 1996, subject to the following:

(a) Beginning September 1, 1997, except as provided in (b) of this subsection, the employee contribution rate shall not exceed the employer plan 2 and 3 rates adopted under RCW 41.45.060 and 41.45.070 for the teachers' retirement system;

(b) In addition, the employee contribution rate for plan 2 shall be increased by fifty percent of the contribution rate increase caused by any plan 2 benefit increase passed after July 1, 1996;

(c) In addition, the employee contribution rate for plan 2 shall not be increased as a result of any distributions pursuant to section 309, chapter 341, Laws of 1998 and RCW 41.31A.020.

(2) The required contribution rate for members of the school employees' retirement system plan 2 shall be fixed at the rates in effect on September 1, 2000, for members of the public employees' retirement system plan 2, subject to the following:

(a) Except as provided in (b) of this subsection, the member contribution rate shall not exceed the school employees' retirement system employer plan 2 and 3 contribution rate adopted under RCW 41.45.060 and 41.45.070;

(b) The member contribution rate for the school employees' retirement system plan 2 shall be increased by fifty percent of the contribution rate increase caused by any plan 2 benefit increase passed after September 1, 2000.

(3) The required contribution rate for members of the public employees' retirement system plan 2 shall be set at the same rate as the employer combined plan 2 and plan 3 rate.

(4) The required contribution rate for members of the law enforcement officers' and fire fighters' retirement system plan 2 shall be set at fifty percent of the cost of the retirement system.

(5) The employee contribution rates for plan 2 under subsections (3) and (4) of this section shall not ((be increased)) include any increase as a result of any distributions pursuant to RCW 41.31A.020 and 41.31A.030.

(((4))) (6) The required plan 2 and 3 contribution rates for employers shall be adopted in the manner described in RCW 41.45.060.

NEW SECTION. Sec. 507. A new section is added to chapter 41.45 RCW to read as follows:

(1) Any increase in the contribution rate required as the result of a failure of the state or of an employer to make any contribution required by this section shall be borne in full by the state or by that employer not making the contribution.

(2) The director shall notify all employers of any pending adjustment in the required contribution rate and such pending adjustment in the required contribution rate and any increase shall be announced at least thirty days prior to the effective date of the change.

(3) Members' contributions required by RCW 41.45.060 and 41.45.061 shall be deducted from the members' compensation each payroll period. The members' contribution and the employers' contribution shall be remitted directly to the department within fifteen days following the end of the calendar month during which the payroll period ends.

(4) The state's contribution required for the law enforcement officers' and fire fighters' retirement system plan 2 shall be transferred to the appropriate fund from the total contributions transferred by the state treasurer under RCW 41.45.060 and 41.45.070.

"NECESSARY FOR IMPLEMENTATION"

Sec. 601. RCW 41.50.075 and 1998 c 341 s 503 are each amended to read as follows:

(1) Two funds are hereby created and established in the state treasury to be known as the Washington law enforcement officers' and fire fighters' system plan 1 retirement fund, and the Washington law enforcement officers' and fire fighters' system plan 2 retirement fund which shall consist of all moneys paid into them in accordance with the provisions of this chapter and chapter 41.26 RCW, whether such moneys take the form of cash, securities, or other assets. The plan 1 fund shall consist of all moneys paid to finance the benefits provided to members of the law enforcement officers' and fire fighters' retirement system plan 1, and the plan 2 fund shall consist of all moneys paid to finance the benefits provided to members of the law enforcement officers' and fire fighters' retirement system plan 2.

(2) All of the assets of the Washington state teachers' retirement system shall be credited according to the purposes for which they are held, to two funds to be maintained in the state treasury, namely, the teachers' retirement system plan 1 fund and the teachers' retirement system combined plan 2 and 3 fund. The plan 1 fund shall consist of all moneys paid to finance the benefits provided to members of the Washington state teachers' retirement system plan 1, and the combined plan 2 and 3 fund shall consist of all moneys paid to finance the benefits provided to members of the Washington state teachers' retirement system plan 2 and 3.

(3) There is hereby established in the state treasury two separate funds, namely the public employees' retirement system plan 1 fund and the public employees' retirement system combined plan 2 and plan 3 fund. The plan 1 fund shall consist of all moneys paid to finance the benefits provided to members of the public employees' retirement system plan 1, and the combined plan 2 and plan 3 fund shall consist of all moneys paid to finance the benefits provided to members of the public employees' retirement system plans 2 and 3.

(4) There is hereby established in the state treasury the school employees' retirement system combined plan 2 and 3 fund. The combined plan 2 and 3 fund shall consist of all moneys paid to finance the benefits provided to members of the school employees' retirement system plan 2 and plan 3.

Sec. 602. RCW 41.50.088 and 1998 c 341 s 507 and 1998 c 116 s 10 are each reenacted and amended to read as follows:

(1) The board shall adopt rules as necessary and exercise ((all)) the following powers and ((perform all)) duties ((prescribed by law with respect to)):

(a) The board shall recommend to the state investment board types of options for member self-directed investment in the teachers' retirement system plan 3 ((and)), the school employees' retirement system plan 3, and the public employees' retirement system plan 3 as deemed by the board to be reflective of the members' preferences;

(b) ((The selection of optional benefit payment schedules available to members and survivors of members upon the death, disability, retirement, or termination of the member. The optional benefit payments may include but not be limited to: Fixed and participating annuities, joint and survivor annuities, and payments that bridge to social security or defined benefit plan payments;

(c) Approval of actuarially equivalent annuities)) By July 1, 2005, the board shall make optional actuarially equivalent life annuity benefit payment schedules available to members and survivors that may be purchased from the combined plan 2 and plan 3 funds under RCW 41.50.075 (((2) or (3))); and

(((d))) (c) Determination of the basis for administrative charges to the self-directed investment fund to offset self-directed account expenses;

(2) The board shall recommend to the state investment board types of options for participant self-directed investment in the state deferred compensation plan, as deemed by the board to be reflective of the participants' preferences.

Sec. 603. RCW 41.50.500 and 1998 c 341 s 512 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 41.50.500 through 41.50.650, 41.50.670 through 41.50.720, and 26.09.138.

(1) "Benefits" means periodic retirement payments or a withdrawal of accumulated contributions.

(2) "Disposable benefits" means that part of the benefits of an individual remaining after the deduction from those benefits of any amount required by law to be withheld. The term "required by law to be withheld" does not include any deduction elective to the member.

(3) "Dissolution order" means any judgment, decree, or order of spousal maintenance, property division, or court-approved property settlement incident to a decree of divorce, dissolution, invalidity, or legal separation issued by the superior court of the state of Washington or a judgment, decree, or other order of spousal support issued by a court of competent jurisdiction in another state or country, that has been registered or otherwise made enforceable in this state.

(4) "Mandatory benefits assignment order" means an order issued to the department of retirement systems pursuant to RCW 41.50.570 to withhold and deliver benefits payable to an obligor under chapter 2.10, 2.12, 41.26, 41.32, 41.40, 41.35, or 43.43 RCW.

(5) "Obligee" means an ex spouse or spouse to whom a duty of spousal maintenance or property division obligation is owed.

(6) "Obligor" means the spouse or ex spouse owing a duty of spousal maintenance or a property division obligation.

(7) "Periodic retirement payments" means periodic payments of retirement allowances, including but not limited to service retirement allowances, disability retirement allowances, and survivors' allowances. The term does not include a withdrawal of accumulated contributions.

(8) "Property division obligation" means any outstanding court-ordered property division or court-approved property settlement obligation incident to a decree of divorce, dissolution, or legal separation.

(9) "Standard allowance" means a benefit payment option selected under RCW 2.10.146(1)(a), 41.26.460(1)(a), 41.32.785(1)(a), 41.40.188(1)(a), 41.40.660(1), section 314(1)(a) of this act, or 41.35.220 that ceases upon the death of the retiree. Standard allowance also means the benefit allowance provided under RCW 2.10.110, 2.10.130, 43.43.260, 41.26.100, 41.26.130(1)(a), or chapter 2.12 RCW. Standard allowance also means the maximum retirement allowance available under RCW 41.32.530(1) following member withdrawal of accumulated contributions, if any.

(10) "Withdrawal of accumulated contributions" means a lump sum payment to a retirement system member of all or a part of the member's accumulated contributions, including accrued interest, at the request of the member including any lump sum amount paid upon the death of the member.

Sec. 604. RCW 41.05.011 and 1998 c 341 s 706 are each amended to read as follows:

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

(1) "Administrator" means the administrator of the authority.

(2) "State purchased health care" or "health care" means medical and health care, pharmaceuticals, and medical equipment purchased with state and federal funds by the department of social and health services, the department of health, the basic health plan, the state health care authority, the department of labor and industries, the department of corrections, the department of veterans affairs, and local school districts.

(3) "Authority" means the Washington state health care authority.

(4) "Insuring entity" means an insurer as defined in chapter 48.01 RCW, a health care service contractor as defined in chapter 48.44 RCW, or a health maintenance organization as defined in chapter 48.46 RCW.

(5) "Flexible benefit plan" means a benefit plan that allows employees to choose the level of health care coverage provided and the amount of employee contributions from among a range of choices offered by the authority.

(6) "Employee" includes all full-time and career seasonal employees of the state, whether or not covered by civil service; elected and appointed officials of the executive branch of government, including full-time members of boards, commissions, or committees; and includes any or all part-time and temporary employees under the terms and conditions established under this chapter by the authority; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature or of the legislative authority of any county, city, or town who are elected to office after February 20, 1970. "Employee" also includes: (a) Employees of a county, municipality, or other political subdivision of the state if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205; (b) employees of employee organizations representing state civil service employees, at the option of each such employee organization, and, effective October 1, 1995, employees of employee organizations currently pooled with employees of school districts for the purpose of purchasing insurance benefits, at the option of each such employee organization; and (c) employees of a school district if the authority agrees to provide any of the school districts' insurance programs by contract with the authority as provided in RCW 28A.400.350.

(7) "Board" means the public employees' benefits board established under RCW 41.05.055.

(8) "Retired or disabled school employee" means:

(a) Persons who separated from employment with a school district or educational service district and are receiving a retirement allowance under chapter 41.32 or 41.40 RCW as of September 30, 1993;

(b) Persons who separate from employment with a school district or educational service district on or after October 1, 1993, and immediately upon separation receive a retirement allowance under chapter 41.32, 41.35, or 41.40 RCW;

(c) Persons who separate from employment with a school district or educational service district due to a total and permanent disability, and are eligible to receive a deferred retirement allowance under chapter 41.32, 41.35, or 41.40 RCW.

(9) "Benefits contribution plan" means a premium only contribution plan, a medical flexible spending arrangement, or a cafeteria plan whereby state and public employees may agree to a contribution to benefit costs which will allow the employee to participate in benefits offered pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

(10) "Salary" means a state employee's monthly salary or wages.

(11) "Participant" means an individual who fulfills the eligibility and enrollment requirements under the benefits contribution plan.

(12) "Plan year" means the time period established by the authority.

(13) "Separated employees" means persons who separate from employment with an employer as defined in:

(a) RCW 41.32.010(11) on or after July 1, 1996; or

(b) RCW 41.35.010 on or after September 1, 2000; or

and who are at least age fifty-five and have at least ten years of service under the teachers' retirement system plan 3 as defined in RCW 41.32.010(40) ((or)), the Washington school employees' retirement system plan 3 as defined in RCW 41.35.010, or the public employees' retirement system plan 3 as defined in RCW 41.40.010.

"FUND INVESTMENTS AND INTEREST EARNINGS"

Sec. 701. RCW 43.33A.190 and 1998 c 341 s 707 are each amended to read as follows:

Pursuant to RCW 41.34.130, the state investment board shall invest all self-directed investment moneys under teachers' retirement system plan 3 ((and)), the school employees' retirement system plan 3, and the public employees' retirement system plan 3 with full power to establish investment policy, develop investment options, and manage self-directed investment funds.

Sec. 702. RCW 43.84.092 and 1999 c 380 s 9, 1999 c 309 s 929, 1999 c 268 s 5, and 1999 c 94 s 4 are each reenacted and amended to read as follows:

(1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.

(2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.

(3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:

(a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the Eastern Washington University capital projects account, the education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the Puyallup tribal settlement account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal ((account)) fund, the volunteer fire fighters' ((relief and pension)) and reserve officers' administrative ((account)) fund, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.

(5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

"LAW ENFORCEMENT OFFICERS' AND FIRE FIGHTERS'

RETIREMENT SYSTEM PLAN 2"

Sec. 801. RCW 41.26.450 and 1996 c 38 s 3 are each amended to read as follows:

(((1) The required contribution rates to the plan II system for members, employers, and the state of Washington shall be established by the director from time to time as may be necessary upon the advice of the state actuary. The state actuary shall use the aggregate actuarial cost method to calculate contribution rates.

(2) Except as provided in subsection (3) of this section, the member, the employer and the state shall each contribute the following shares of the cost of the retirement system:

Member 50%

Employer 30%

State 20%

(3))) Port districts established under Title 53 RCW and institutions of higher education as defined in RCW 28B.10.016 shall contribute both the employer and state shares of the cost of the retirement system for any of their employees who are law enforcement officers. Institutions of higher education shall contribute both the employer and the state shares of the cost of the retirement system for any of their employees who are fire fighters.

(((4) Effective January 1, 1987, however, no member or employer contributions are required for any calendar month in which the member is not granted service credit.

(5) Any adjustments in contribution rates required from time to time for future costs shall likewise be shared proportionally by the members, employers, and the state.

(6) Any increase in the contribution rate required as the result of a failure of the state or of an employer to make any contribution required by this section shall be borne in full by the state or by that employer not making the contribution.

(7) The director shall notify all employers of any pending adjustment in the required contribution rate and such increase shall be announced at least thirty days prior to the effective date of the change.

(8) Members' contributions required by this section shall be deducted from the members basic salary each payroll period. The members contribution and the employers contribution shall be remitted directly to the department within fifteen days following the end of the calendar month during which the payroll period ends. The state's contribution required by this section shall be transferred to the plan II fund from the total contributions transferred by the state treasurer under RCW 41.45.060 and 41.45.070.))

"EARLY RETIREMENT REDUCTION FACTORS"

Sec. 901. RCW 41.40.630 and 1991 c 343 s 11 are each amended to read as follows:

(1) NORMAL RETIREMENT. Any member with at least five service credit years who has attained at least age sixty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.620.

(2) EARLY RETIREMENT. Any member who has completed at least twenty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.620, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least thirty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.620, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

Sec. 902. RCW 41.32.765 and 1991 c 343 s 5 are each amended to read as follows:

(1) NORMAL RETIREMENT. Any member with at least five service credit years of service who has attained at least age sixty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.760.

(2) EARLY RETIREMENT. Any member who has completed at least twenty service credit years of service who has attained at least age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.760, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least thirty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.760, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

Sec. 903. RCW 41.32.875 and 1996 c 39 s 6 are each amended to read as follows:

(1) NORMAL RETIREMENT. Any member who is at least age sixty-five and who has:

(a) Completed ten service credit years; or

(b) Completed five service credit years, including twelve service credit months after attaining age fifty-four; or

shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.840.

(2) EARLY RETIREMENT. Any member who has attained at least age fifty-five and has completed at least ten years of service shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.840, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least thirty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.840, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

Sec. 904. RCW 41.26.430 and 1993 c 517 s 3 are each amended to read as follows:

(1) NORMAL RETIREMENT. Any member with at least five service credit years of service who has attained at least age ((fifty-five)) fifty-three shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.26.420.

(2) EARLY RETIREMENT. Any member who has completed at least twenty service credit years of service and has attained age fifty shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.26.420, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age ((fifty-five)) fifty-three.

(3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least twenty service credit years and has attained age fifty shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.26.420, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age fifty-three.

Sec. 905. RCW 41.35.420 and 1998 c 341 s 103 are each amended to read as follows:

(2) EARLY RETIREMENT. Any member who has completed at least twenty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.35.400, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least thirty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.35.400, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

Sec. 906. RCW 41.35.680 and 1998 c 341 s 209 are each amended to read as follows:

(1) NORMAL RETIREMENT. Any member who is at least age sixty-five and who has:

(a) Completed ten service credit years; or

(b) Completed five service credit years, including twelve service credit months after attaining age fifty-four; or

(c) Completed five service credit years by September 1, 2000, under the public employees' retirement system plan 2 and who transferred to plan 3 under RCW 41.35.510;

shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.35.620.

(2) EARLY RETIREMENT. Any member who has attained at least age fifty-five and has completed at least ten years of service shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.35.620, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least thirty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.35.620, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

"DEATH BENEFITS"

Sec. 1001. RCW 41.26.510 and 1995 c 245 s 1 and 1995 c 144 s 19 are each reenacted and amended to read as follows:

(1) Except as provided in RCW 11.07.010, if a member or a vested member who has not completed at least ten years of service dies, the amount of the accumulated contributions standing to such member's credit in the retirement system at the time of such member's death, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, shall be paid to the member's estate, or such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department. If there be no such designated person or persons still living at the time of the member's death, such member's accumulated contributions standing to such member's credit in the retirement system, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, shall be paid to the member's surviving spouse as if in fact such spouse had been nominated by written designation, or if there be no such surviving spouse, then to such member's legal representatives.

(2) If a member who is eligible for retirement or a member who has completed at least ten years of service dies, the surviving spouse or eligible child or children shall elect to receive either:

(a) A retirement allowance computed as provided for in RCW 41.26.430(((1))), actuarially reduced by the amount of any lump sum benefit identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670 and actuarially adjusted to reflect a joint and one hundred percent survivor option under RCW 41.26.460 and if the member was not eligible for normal retirement at the date of death a further reduction as described in RCW 41.26.430(((2))); if a surviving spouse who is receiving a retirement allowance dies leaving a child or children of the member under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority; if there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance share and share alike calculated as herein provided making the assumption that the ages of the spouse and member were equal at the time of the member's death; or

(b)(i) The member's accumulated contributions, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670; or

(ii) If the member dies on or after July 25, 1993, one hundred fifty percent of the member's accumulated contributions, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670. Any accumulated contributions attributable to restorations made under RCW 41.50.165(2) shall be refunded at one hundred percent.

(3) If a member who is eligible for retirement or a member who has completed at least ten years of service dies after October 1, 1977, and is not survived by a spouse or an eligible child, then the accumulated contributions standing to the member's credit, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, shall be paid:

(a) To an estate, a person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or

(b) If there is no such designated person or persons still living at the time of the member's death, then to the member's legal representatives.

Sec. 1002. RCW 41.32.805 and 1995 c 144 s 16 are each amended to read as follows:

(1) Except as provided in RCW 11.07.010, if a member or a vested member who has not completed at least ten years of service dies, the amount of the accumulated contributions standing to such member's credit in the retirement system, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, at the time of such member's death shall be paid to the member's estate, or such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department. If there be no such designated person or persons still living at the time of the member's death, such member's accumulated contributions standing to such member's credit in the retirement system, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, shall be paid to the member's surviving spouse as if in fact such spouse had been nominated by written designation, or if there be no such surviving spouse, then to such member's legal representatives.

(2) If a member who is eligible for retirement or a member who has completed at least ten years of service dies, the surviving spouse or eligible children shall elect to receive either:

(a) A retirement allowance computed as provided for in RCW 41.32.765(((1))), actuarially reduced by the amount of any lump sum benefit identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670 and actuarially adjusted to reflect a joint and one hundred percent survivor option under RCW 41.32.785 and if the member was not eligible for normal retirement at the date of death a further reduction as described in RCW 41.32.765(((2))); if a surviving spouse who is receiving a retirement allowance dies leaving a child or children of the member under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority; if there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance share and share alike calculated as herein provided making the assumption that the ages of the spouse and member were equal at the time of the member's death; or

(b) The member's accumulated contributions, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670.

(a) To an estate, a person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or

(b) If there is no such designated person or persons still living at the time of the member's death, then to the member's legal representatives.

Sec. 1003. RCW 41.32.895 and 1996 c 39 s 7 are each amended to read as follows:

If a member dies prior to retirement, the surviving spouse or eligible child or children shall receive a retirement allowance computed as provided in RCW 41.32.851 actuarially reduced to reflect a joint and one hundred percent survivor option and if the member was not eligible for normal retirement at the date of death a further reduction as described in RCW 41.32.875(((2))).

Sec. 1004. RCW 41.40.700 and 1995 c 144 s 8 are each amended to read as follows:

(2) If a member who is eligible for retirement or a member who has completed at least ten years of service dies, the surviving spouse or eligible child or children shall elect to receive either:

(a) A retirement allowance computed as provided for in RCW 41.40.630(((1))), actuarially reduced by the amount of any lump sum benefit identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670 and actuarially adjusted to reflect a joint and one hundred percent survivor option under RCW 41.40.660 and if the member was not eligible for normal retirement at the date of death a further reduction as described in RCW 41.40.630(((2))); if a surviving spouse who is receiving a retirement allowance dies leaving a child or children of the member under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority; if there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance share and share alike calculated as herein provided making the assumption that the ages of the spouse and member were equal at the time of the member's death; or

(b) The member's accumulated contributions, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670.

(a) To a person or persons, estate, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or

(b) If there is no such designated person or persons still living at the time of the member's death, then to the member's legal representatives.

"CONFORMING AMENDMENTS"

Sec. 1101. RCW 41.04.440 and 1995 c 239 s 322 are each amended to read as follows:

(1) The sole purpose of RCW 41.04.445 and 41.04.450 is to allow the members of the retirement systems created in chapters 2.10, 2.12, 41.26, 41.32, 41.40, 41.34, and 43.43 RCW to enjoy the tax deferral benefits allowed under 26 U.S.C. 414(h). Chapter 227, Laws of 1984 does not alter in any manner the provisions of RCW ((41.26.450 and 41.40.650)) 41.45.060, 41.45.061, and section 507 of this act which require that the member contribution rates shall be set so as to provide fifty percent of the cost of the respective retirement plans.

(2) Should the legislature revoke any benefit allowed under 26 U.S.C. 414(h), no affected employee shall be entitled thereafter to receive such benefit as a matter of contractual right.

Sec. 1102. RCW 41.04.445 and 1995 c 239 s 323 are each amended to read as follows:

(1) This section applies to all members who are:

(a) Judges under the retirement system established under chapter 2.10, 2.12, or 2.14 RCW;

(b) Employees of the state under the retirement system established by chapter 41.32, 41.40, or 43.43 RCW;

(c) Employees of school districts under the retirement system established by chapter 41.32 or 41.40 RCW, except for substitute teachers as defined by RCW 41.32.010;

(d) Employees of educational service districts under the retirement system established by chapter 41.32 or 41.40 RCW; or

(e) Employees of community college districts under the retirement system established by chapter 41.32 or 41.40 RCW.

(2) Only for compensation earned after the effective date of the implementation of this section and as provided by section 414(h) of the federal internal revenue code, the employer of all the members specified in subsection (1) of this section shall pick up only those member contributions as required under:

(a) RCW 2.10.090(1);

(b) RCW 2.12.060;

(d) RCW 41.32.263;

(e) RCW 41.32.350;

(f) RCW 41.40.330 (1) and (3);

(g) RCW ((41.40.650)) 41.45.061 and section 507 of this act;

(h) RCW 41.34.070;

(i) RCW 43.43.300; and

(j) RCW 41.34.040.

(3) Only for the purposes of federal income taxation, the gross income of the member shall be reduced by the amount of the contribution to the respective retirement system picked up by the employer.

(4) All member contributions to the respective retirement system picked up by the employer as provided by this section, plus the accrued interest earned thereon, shall be paid to the member upon the withdrawal of funds or lump-sum payment of accumulated contributions as provided under the provisions of the retirement systems.

(5) At least forty-five days prior to implementing this section, the employer shall provide:

(a) A complete explanation of the effects of this section to all members; and

(b) Notification of such implementation to the director of the department of retirement systems.

Sec. 1103. RCW 41.04.450 and 1995 c 239 s 324 are each amended to read as follows:

(1) Employers of those members under chapters 41.26, 41.40, and 41.34 RCW who are not specified in RCW 41.04.445 may choose to implement the employer pick up of all member contributions without exception under RCW 41.26.080(1), 41.26.450, 41.40.330(1), ((41.40.650,)) 41.45.060, 41.45.061, and section 507 of this act and chapter 41.34 RCW. If the employer does so choose, the employer and members shall be subject to the conditions and limitations of RCW 41.04.445 (3), (4), and (5) and RCW 41.04.455.

(2) An employer exercising the option under this section may later choose to withdraw from and/or reestablish the employer pick up of member contributions only once in a calendar year following forty-five days prior notice to the director of the department of retirement systems.

Sec. 1104. RCW 41.26.470 and 1999 c 135 s 1 are each amended to read as follows:

(1) A member of the retirement system who becomes totally incapacitated for continued employment by an employer as determined by the director shall be eligible to receive an allowance under the provisions of RCW 41.26.410 through 41.26.550. Such member shall receive a monthly disability allowance computed as provided for in RCW 41.26.420 and shall have such allowance actuarially reduced to reflect the difference in the number of years between age at disability and the attainment of age fifty-five.

(2) Any member who receives an allowance under the provisions of this section shall be subject to such comprehensive medical examinations as required by the department. If such medical examinations reveal that such a member has recovered from the incapacitating disability and the member is no longer entitled to benefits under Title 51 RCW, the retirement allowance shall be canceled and the member shall be restored to duty in the same civil service rank, if any, held by the member at the time of retirement or, if unable to perform the duties of the rank, then, at the member's request, in such other like or lesser rank as may be or become open and available, the duties of which the member is then able to perform. In no event shall a member previously drawing a disability allowance be returned or be restored to duty at a salary or rate of pay less than the current salary attached to the rank or position held by the member at the date of the retirement for disability. If the department determines that the member is able to return to service, the member is entitled to notice and a hearing. Both the notice and the hearing shall comply with the requirements of chapter 34.05 RCW, the Administrative Procedure Act.

(3) Those members subject to this chapter who became disabled in the line of duty on or after July 23, 1989, and who receive benefits under RCW 41.04.500 through 41.04.530 or similar benefits under RCW 41.04.535 shall receive or continue to receive service credit subject to the following:

(a) No member may receive more than one month's service credit in a calendar month.

(b) No service credit under this section may be allowed after a member separates or is separated without leave of absence.

(d) Employee contributions shall be collected by the employer and paid to the department at the rate in effect for the period of service credited.

(e) State contributions shall be as provided in RCW ((41.26.450)) 41.45.060 and section 507 of this act.

(f) Contributions shall be based on the regular compensation which the member would have received had the disability not occurred.

(g) The service and compensation credit under this section shall be granted for a period not to exceed six consecutive months.

(h) Should the legislature revoke the service credit authorized under this section or repeal this section, no affected employee is entitled to receive the credit as a matter of contractual right.

(4)(a) If the recipient of a monthly retirement allowance under this section dies before the total of the retirement allowance paid to the recipient equals the amount of the accumulated contributions at the date of retirement, then the balance shall be paid to the member's estate, or such person or persons, trust, or organization as the recipient has nominated by written designation duly executed and filed with the director, or, if there is no such designated person or persons still living at the time of the recipient's death, then to the surviving spouse, or, if there is neither such designated person or persons still living at the time of his or her death nor a surviving spouse, then to his or her legal representative.

(b) If a recipient of a monthly retirement allowance under this section died before April 27, 1989, and before the total of the retirement allowance paid to the recipient equaled the amount of his or her accumulated contributions at the date of retirement, then the department shall pay the balance of the accumulated contributions to the member's surviving spouse or, if there is no surviving spouse, then in equal shares to the member's children. If there is no surviving spouse or children, the department shall retain the contributions.

(5) Should the disability retirement allowance of any disability beneficiary be canceled for any cause other than reentrance into service or retirement for service, he or she shall be paid the excess, if any, of the accumulated contributions at the time of retirement over all payments made on his or her behalf under this chapter.

Sec. 1105. RCW 41.26.520 and 1996 c 61 s 1 are each amended to read as follows:

(1) A member who is on a paid leave of absence authorized by a member's employer shall continue to receive service credit as provided for under the provisions of RCW 41.26.410 through 41.26.550.

(2) A member who receives compensation from an employer while on an authorized leave of absence to serve as an elected official of a labor organization, and whose employer is reimbursed by the labor organization for the compensation paid to the member during the period of absence, may also be considered to be on a paid leave of absence. This subsection shall only apply if the member's leave of absence is authorized by a collective bargaining agreement that provides that the member retains seniority rights with the employer during the period of leave. The basic salary reported for a member who establishes service credit under this subsection may not be greater than the salary paid to the highest paid job class covered by the collective bargaining agreement.

(3) Except as specified in subsection (6) of this section, a member shall be eligible to receive a maximum of two years service credit during a member's entire working career for those periods when a member is on an unpaid leave of absence authorized by an employer. Such credit may be obtained only if the member makes the employer, member, and state contributions plus interest as determined by the department for the period of the authorized leave of absence within five years of resumption of service or prior to retirement whichever comes sooner.

(4) If a member fails to meet the time limitations of subsection (3) of this section, the member may receive a maximum of two years of service credit during a member's working career for those periods when a member is on unpaid leave of absence authorized by an employer. This may be done by paying the amount required under RCW 41.50.165(2) prior to retirement.

(5) For the purpose of subsection (3) of this section the contribution shall not include the contribution for the unfunded supplemental present value as required by RCW ((41.26.450)) 41.45.060, 41.45.061, and section 507 of this act. The contributions required shall be based on the average of the member's basic salary at both the time the authorized leave of absence was granted and the time the member resumed employment.

(6) A member who leaves the employ of an employer to enter the armed forces of the United States shall be entitled to retirement system service credit for up to five years of military service. This subsection shall be administered in a manner consistent with the requirements of the federal uniformed services employment and reemployment rights act.

(a) The member qualifies for service credit under this subsection if:

(i) Within ninety days of the member's honorable discharge from the United States armed forces, the member applies for reemployment with the employer who employed the member immediately prior to the member entering the United States armed forces; and

(ii) The member makes the employee contributions required under RCW ((41.26.450)) 41.45.060, 41.45.061, and section 507 of this act within five years of resumption of service or prior to retirement, whichever comes sooner; or

(iii) Prior to retirement and not within ninety days of the member's honorable discharge or five years of resumption of service the member pays the amount required under RCW 41.50.165(2).

(b) Upon receipt of member contributions under (a)(ii) of this subsection, the department shall establish the member's service credit and shall bill the employer and the state for their respective contributions required under RCW 41.26.450 for the period of military service, plus interest as determined by the department.

(c) The contributions required under (a)(ii) of this subsection shall be based on the compensation the member would have earned if not on leave, or if that cannot be estimated with reasonable certainty, the compensation reported for the member in the year prior to when the member went on military leave.

(7) A member receiving benefits under Title 51 RCW who is not receiving benefits under this chapter shall be deemed to be on unpaid, authorized leave of absence.

Sec. 1106. RCW 41.40.710 and 1996 c 61 s 4 are each amended to read as follows:

(1) A member who is on a paid leave of absence authorized by a member's employer shall continue to receive service credit as provided for under the provisions of RCW 41.40.610 through 41.40.740.

(2) A member who receives compensation from an employer while on an authorized leave of absence to serve as an elected official of a labor organization, and whose employer is reimbursed by the labor organization for the compensation paid to the member during the period of absence, may also be considered to be on a paid leave of absence. This subsection shall only apply if the member's leave of absence is authorized by a collective bargaining agreement that provides that the member retains seniority rights with the employer during the period of leave. The compensation earnable reported for a member who establishes service credit under this subsection may not be greater than the salary paid to the highest paid job class covered by the collective bargaining agreement.

(a) The member makes both the plan 2 employer and member contributions plus interest as determined by the department for the period of the authorized leave of absence within five years of resumption of service or prior to retirement whichever comes sooner; or

(b) If not within five years of resumption of service but prior to retirement, pay the amount required under RCW 41.50.165(2).

The contributions required under (a) of this subsection shall be based on the average of the member's compensation earnable at both the time the authorized leave of absence was granted and the time the member resumed employment.

(4) A member who leaves the employ of an employer to enter the armed forces of the United States shall be entitled to retirement system service credit for up to five years of military service. This subsection shall be administered in a manner consistent with the requirements of the federal uniformed services employment and reemployment rights act.

(a) The member qualifies for service credit under this subsection if:

(ii) The member makes the employee contributions required under RCW ((41.40.650)) 41.45.061 and section 507 of this act within five years of resumption of service or prior to retirement, whichever comes sooner; or

(iii) Prior to retirement and not within ninety days of the member's honorable discharge or five years of resumption of service the member pays the amount required under RCW 41.50.165(2).

(b) Upon receipt of member contributions under (a)(ii) of this subsection, the department shall establish the member's service credit and shall bill the employer for its contribution required under RCW ((41.40.650)) 41.45.060, 41.45.061, and section 507 of this act for the period of military service, plus interest as determined by the department.

NEW SECTION. Sec. 1107. A new section is added to chapter 41.50 RCW to read as follows:

Employers, as defined in RCW 41.26.030, 41.32.010, 41.34.020, 41.35.010, and 41.40.010, must report all member data to the department in a format designed and communicated by the department. Employers failing to comply with this reporting requirement shall be assessed an additional fee as defined under RCW 41.50.110(5).

"MISCELLANEOUS"

NEW SECTION. Sec. 1201. (1) Except for sections 408 and 901 through 906 of this act, this act takes effect March 1, 2002.

(2) Section 408 of this act takes effect January 1, 2004.

(3) Sections 901 through 906 of this act take effect September 1, 2000.

NEW SECTION. Sec. 1202. Subchapter headings in this act are not any part of the law."

On page 1, line 1 of the title, after "systems;" strike the remainder of the title and insert "amending RCW 41.40.005, 41.40.010, 41.40.042, 41.40.054, 41.40.057, 41.40.062, 41.40.088, 41.40.092, 41.40.610, 41.34.020, 41.34.030, 41.34.040, 41.34.060, 41.34.080, 41.34.100, 41.31A.010, 41.31A.020, 41.45.010, 41.45.050, 41.45.061, 41.50.075, 41.50.500, 41.05.011, 43.33A.190, 41.26.450, 41.40.630, 41.32.765, 41.32.875, 41.26.430, 41.35.420, 41.35.680, 41.32.805, 41.32.895, 41.40.700, 41.04.440, 41.04.445, 41.04.450, 41.26.470, 41.26.520, and 41.40.710; reenacting and amending RCW 41.45.020, 41.45.060, 41.45.070, 41.50.088, 43.84.092, and 41.26.510; adding new sections to chapter 41.40 RCW; adding a new section to chapter 41.31A RCW; adding a new section to chapter 41.45 RCW; adding a new section to chapter 41.50 RCW; creating new sections; decodifying RCW 41.40.094; repealing RCW 41.40.650; and providing effective dates."

Signed by Representatives Huff, Republican Co-Chair; H. Sommers, Democratic Co-Chair; Barlean, Republican Vice Chair; Doumit, Democratic Vice Chair; D. Schmidt, Republican Vice Chair; Alexander; Benson; Boldt; Clements; Cody; Crouse; Gombosky; Grant; Kagi; Keiser; Kenney; Kessler; Lambert; Linville; Lisk; Mastin; McIntire; McMorris; Mulliken; Parlette; Regala; Rockefeller; Ruderman; Sullivan; Sump; Tokuda and Wensman.

Voting yea: Representatives Huff, H. Sommers, Barlean, Doumit, Schmidt, Alexander, Benson, Boldt, Clements, Cody, Crouse, Gombosky, Grant, Kagi, Keiser, Kenney, Kessler, Lambert, Linville, Lisk, Mastin, McIntire, McMorris, Mulliken, Parlette, Regala, Rockefeller, Ruderman, Sullivan, Sump, Tokuda and Wensman.

There being no objection, Engrossed Substitute Senate Bill No. 6530 was placed on Second Reading.

There being no objection, the House advanced to the sixth order of business.

ENGROSSED SUBSTITUTE SENATE BILL NO. 6530, by Senate Committee on Ways & Means (originally sponsored by Senators Fraser, Long, Snyder, Franklin, Bauer, Honeyford, Jacobsen, Fairley, Haugen, Roach, Zarelli, Rasmussen, Goings, McAuliffe, Patterson, Eide, Winsley, Hale, Costa, Kohl-Welles, Stevens, B. Sheldon, Gardner and Spanel; by request of Joint Committee on Pension Policy)

Pertaining to plans 2 and 3 of the state retirement systems.

The bill was read the second time.

There being no objection, the committee amendment(s) by the Committee on Appropriations was adopted.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives H. Sommers, Alexander, Conway, Delvin, Lambert, Cooper and Carlson spoke in favor of passage of the bill.

Speaker Ballard stated the question before the House to be final passage of Engrossed Substitute Senate Bill No. 6530, as amended by the House.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Substitute Senate Bill No. 6530, as amended by the House, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed Substitute Senate Bill No. 6530, as amended by the House, having received the constitutional majority, was declared passed.

MESSAGE FROM THE SENATE

March 9, 2000

Mr. Speaker:

The Senate concurred in the House amendment(s) to SENATE BILL NO. 6775 on page 2, line 27, page 4, line 33, and page 6, line 13, and passed the bill with said amendments, and the same is herewith transmitted.

Tony M. Cook, Secretary

There being no objection, the rules were suspended and the Rules Committee was relieved of House Bill No. 3128, and the bill was placed on Second Reading.

SECOND READING

HOUSE BILL NO. 3128, by Representatives Thomas, Dunshee and Santos; by request of Department of Revenue

Authorizing the governor to enter into cooperative agreements concerning the sales of cigarettes.

The bill was read the second time. There being no objection, Substitute House Bill No. 3128 was substituted for House Bill No. 3128 and the substitute bill was placed on the second reading calendar.

Substitute House Bill No. 3128 was read the second time.

Representative Dunshee moved the adoption of the following amendment (689):

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature intends to further the government-to-government relationship between the state of Washington and Indians in the state of Washington by authorizing the governor to enter into cooperative agreements concerning the sale of cigarettes. The legislature finds that these agreements will provide a means to promote economic development, provide needed revenues for tribal governments and Indian persons, and enhance enforcement of the state's cigarette tax law, ultimately saving the state money and reducing conflict.

NEW SECTION. Sec. 2. A new section is added to chapter 43.06 RCW to read as follows:

(1) The governor may enter into cooperative agreements concerning the sale of cigarettes. All cooperative agreements shall meet the requirements for cooperative agreements under this section. Except for cooperative agreements under section 3 of this act, the rates, revenue sharing, and exemption terms of a cooperative agreement are not effective unless authorized in a bill enacted by the legislature.

(2) Cooperative agreements shall be in regard to retail sales in which Indian retailers make delivery and physical transfer of possession of the cigarettes from the seller to the buyer within the Indian lands. In addition, cooperative agreements shall provide that retailers shall not sell or give, or permit to be sold or given, cigarettes to any person under the age of eighteen years.

(3) A cooperative agreement with a tribe shall provide for a tribal cigarette tax in lieu of all state cigarette taxes and state and local sales and use taxes on sales of cigarettes on Indian lands by Indian retailers. The tribe may allow an exemption for sales to tribal members.

(4) Cooperative agreements shall provide that all cigarettes possessed or sold by a retailer shall bear a cigarette stamp obtained by wholesalers from a bank or other suitable stamp vendor and applied to the cigarettes.

(5) Cooperative agreements shall provide that retailers shall purchase cigarettes only from:

(a) Wholesalers or manufacturers licensed to do business in the state of Washington;

(b) Out-of-state wholesalers or manufacturers who, although not licensed to do business in the state of Washington, agree to comply with the terms of the cooperative agreement, are certified to the state as having so agreed, and who do in fact so comply. However, the state may in its sole discretion exercise its administrative and enforcement powers over such wholesalers or manufacturers to the extent permitted by law;

(c) A tribal wholesaler that purchases only from a wholesaler or manufacturer described in (a), (b), or (d) of this subsection; and

(d) A tribal manufacturer.

(6) Cooperative agreements shall be for renewable periods of no more than eight years. A renewal may not include a renewal of the phase-in period.

(7) Cooperative agreements shall include provisions for compliance.

(8) Tax revenue retained by a tribe must be used for essential government services. Use of tax revenue for subsidization of cigarette and food retailers is prohibited.

(9) Cooperative agreements may provide for the submission of disputes regarding the interpretation and administration of their provisions for judicial resolution, and, if such submissions are agreed, shall include provision for a limited waiver of sovereign immunity and consent by the state for the resolution conditioned upon a similar limited waiver of sovereign immunity by the other parties to the agreement.

(10) The governor may delegate the power to negotiate cooperative agreements to the department of revenue.

(11) Information received by the state or open to state review under the terms of an agreement is subject to the provisions of RCW 82.32.330.

(12) For purposes of this section and sections 3 through 6 of this act:

(a) "Essential government services" means services such as tribal administration, public facilities, fire, police, public health, education, job services, sewer, water, environmental and land use, transportation, utility services, and economic development;

(b) "Indian lands" means all land within the exterior boundaries of a reservation and land held in trust for a tribe or Indian person by the United States;

(c) "Indian retailer" or "retailer" means (i) a retailer wholly owned and operated by an Indian tribe, (ii) a business wholly owned and operated by a tribal member and licensed by the tribe, or (iii) a business owned and operated by the Indian person or persons in whose name the land is held in trust; and

(d) "Indian tribe" or "tribe" means a federally recognized Indian tribe located within the geographical boundaries of the state of Washington.

NEW SECTION. Sec. 3. A new section is added to chapter 43.06 RCW to read as follows:

(1) The governor is authorized to enter into cooperative agreements with the Squaxin Island Tribe, the Nisqually Tribe, Tulalip Tribes, and the Muckleshoot Indian Tribe. Each agreement adopted under this section shall provide that the tribal cigarette tax rate be one hundred percent of the state cigarette and state and local sales and use taxes within three years of enacting the tribal tax and shall be set no lower than eighty percent of the state cigarette and state and local sales and use taxes during the three-year phase-in period. The three-year phase-in period shall be shortened by three months each quarter the number of cartons of nontribal manufactured cigarettes is ten percent or more than the quarterly average number of cartons of nontribal manufactured cigarettes from the six-month period preceding the imposition of the tribal tax under the agreement. Sales at a retailer operation not in existence as of the date a tribal tax under this section is imposed are subject to the full rate of the tribal tax under the agreement. The tribal cigarette tax is in lieu of the state cigarette and state and local sales and use taxes, as provided in section 2(3) of this act.

(2) A cooperative agreement under this section is subject to section 2 of this act.

NEW SECTION. Sec. 4. A new section is added to chapter 82.08 RCW to read as follows:

The tax levied by RCW 82.08.020 does not apply to sales of cigarettes by an Indian retailer during the effective period of a cooperative agreement subject to section 2 of this act.

NEW SECTION. Sec. 5. A new section is added to chapter 82.12 RCW to read as follows:

The provisions of this chapter shall not apply in respect to the use of cigarettes sold by an Indian retailer during the effective period of a cooperative agreement subject to section 2 of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 82.24 RCW to read as follows:

(1) This chapter does not apply to the sale, use, consumption, handling, possession, or distribution of cigarettes by an Indian retailer during the effective period of a cooperative agreement subject to section 2 of this act.

(2) Effective July 1, 2001, wholesalers and retailers subject to the provisions of this chapter shall be allowed compensation for their services in affixing the stamps required under this chapter a sum computed at the rate of six dollars per one thousand stamps purchased or affixed by them.

NEW SECTION. Sec. 7. RCW 82.24.070 (Compensation of dealers), as now or hereafter amended, and 1987 c 496 s 5, 1987 c 80 s 2, 1971 ex.s. c 299 s 14, 1965 ex.s. c 173 s 24, 1961 ex.s. c 24 s 4, & 1961 c 15 s 82.24.070 are each repealed.

NEW SECTION. Sec. 8. Section 7 of this act takes effect July 1, 2001."

Correct the title.

Representative Kastama moved the adoption of the following amendment (692) to amendment (689):

On page 3, after line 36 of the amendment, insert the following:

"(3) The governor shall negotiate with federally recognized tribes indigenous to western Washington with populations in excess of two thousand people and report to the legislature by December 1, 2000."

Representatives Kastama and Kastama (again) spoke in favor of the adoption of the amendment to the amendment.

Representatives Huff, Dunshee and Thomas spoke against the adoption of the amendment to the amendment.

The amendment to the amendment was not adopted.

Representatives Dunshee and Huff spoke in favor of the adoption of the amendment (689).

The amendment was adopted.

The bill was ordered engrossed.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Dunshee, Huff and Thomas spoke in favor of passage of the bill.

Representatives Conway and Pennington spoke against passage of the bill.

Speaker Ballard stated the question before the House to be final passage of Engrossed Substitute House Bill No. 3128.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 3128 and the bill passed the House by the following vote: Yeas - 85, Nays - 13, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Anderson, Ballasiotes, Barlean, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carlson, Carrell, B. Chandler, G. Chandler, Clements, Cody, Cox, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Edwards, Eickmeyer, Ericksen, Esser, Fisher, Fortunato, Gombosky, Grant, Haigh, Hankins, Hatfield, Huff, Hurst, Kagi, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Lisk, Lovick, Mastin, McDonald, McIntire, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, O'Brien, Ogden, Parlette, Pflug, Quall, Radcliff, Reardon, Rockefeller, Ruderman, Santos, Schindler, Schmidt, Schoesler, Schual-Berke, Scott, Skinner, D. Sommers, H. Sommers, Stensen, Sullivan, Sump, Talcott, Thomas, Tokuda, Van Luven, Wensman, Wolfe, Wood, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 85.

Voting nay: Representatives Constantine, Conway, Cooper, DeBolt, Edmonds, Kastama, Linville, Murray, Pennington, Poulsen, Regala, Romero and Veloria - 13.

Engrossed Substitute House Bill No. 3128, having received the constitutional majority, was declared passed.

MESSAGE FROM THE SENATE

March 9, 2000

Mr. Speaker:

The President has signed:

SUBSTITUTE SENATE BILL NO. 6194,

SECOND SUBSTITUTE SENATE BILL NO. 6255,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6277,

SUBSTITUTE SENATE BILL NO. 6621,

SUBSTITUTE SENATE BILL NO. 6781,

ENGROSSED SUBSTITUTE SENATE CONCURRENT RESOLUTION NO. 8425,

and the same are herewith transmitted.

Tony M. Cook, Secretary

SIGNED BY THE SPEAKERS

The Speakers have signed:

SUBSTITUTE SENATE BILL NO. 6194,

SECOND SUBSTITUTE SENATE BILL NO. 6255,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6277,

SUBSTITUTE SENATE BILL NO. 6621,

SUBSTITUTE SENATE BILL NO. 6781,

ENGROSSED SUBSTITUTE SENATE CONCURRENT RESOLUTION NO. 8425,

MOTION FOR RECONSIDERATION

Representative Fisher, having voted on the prevailing side, moved that the House immediately reconsider the vote on Engrossed Substitute House Bill No. 3128. The motion was carried.

RECONSIDERATION

Speaker Ballard stated the question before the House to be final passage of Engrossed Substitute House Bill No. 3128 on reconsideration.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 3128 on reconsideration and the bill passed the House by the following vote: Yeas - 84, Nays - 14, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Anderson, Ballasiotes, Barlean, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carlson, Carrell, B. Chandler, G. Chandler, Clements, Cody, Cox, Crouse, Delvin, Dickerson, Dunn, Dunshee, Edwards, Eickmeyer, Ericksen, Esser, Fortunato, Gombosky, Grant, Haigh, Hankins, Hatfield, Huff, Hurst, Kagi, Keiser, Kenney, Kessler, Koster, Lambert, Linville, Lisk, Lovick, Mastin, McDonald, McIntire, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pflug, Quall, Radcliff, Reardon, Rockefeller, Ruderman, Santos, Schindler, Schmidt, Schoesler, Schual-Berke, Scott, Skinner, D. Sommers, H. Sommers, Stensen, Sullivan, Sump, Talcott, Thomas, Tokuda, Van Luven, Wensman, Wolfe, Wood, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 84.

Voting nay: Representatives Constantine, Conway, Cooper, DeBolt, Doumit, Edmonds, Fisher, Kastama, Lantz, Pennington, Poulsen, Regala, Romero and Veloria - 14.

Engrossed Substitute House Bill No. 3128, on reconsideration having received the constitutional majority, was declared passed.

There being no objection, the rules were suspended and the Rules Committee was relieved of Substitute Senate Bill No. 6525, and the bill was placed on Second Reading.

SECOND READING

SUBSTITUTE SENATE BILL NO. 6525, by Senate Committee on Environmental Quality & Water Resources (originally sponsored by Senators Fraser, Swecker, Jacobsen, Eide, McAuliffe and Gardner)

Prioritizing the processing of applications for water rights changes and transfers.

The bill was read the second time.

There being no objection, the committee amendment(s) by the Committee on Agriculture & Ecology was not adopted. (For committee amendment(s), see Journal, 47^th Day, February 25, 2000.)

Representative G. Chandler moved the adoption of the following amendment (693):

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. In order to help reduce the current backlog of applications for changes, transfers, or amendments of existing water rights, the legislature intends to allow the processing of applications for such changes, transfers, or amendments without regard to possible impairment of pending applications for new water rights. While the legislature intends to assist the processing of such changes, transfers, and amendments, it does not intend to divert the department of ecology's efforts or in any other way deter the processing of applications for new water rights.

NEW SECTION. Sec. 2. A new section is added to chapter 90.03 RCW to read as follows:

(1) The department may process and render decisions on an application for change independently from processing and making decisions on pending applications for new water rights from the same water source without regard to the dates on which the applications for the new rights were filed.

(2) Except as provided in this section, the department and a water conservancy board shall process applications for change from the same water source in the order in which they were filed with the department or the board. The exceptions are:

(a) The proposed change would alleviate a public health and safety emergency or otherwise preserve public health and safety or would authorize an emergency withdrawal under RCW 43.83B.410;

(b) There is insufficient information to render a decision on a senior application or applications for change, and the information cannot be obtained in a timely manner;

(c) The proposed change was filed by a claimant in a water rights adjudication, and a decision is needed expeditiously to ensure that orders or decrees of the superior court will be representative of the current water situation;

(d) The proposed change will move a point of diversion or withdrawal, or replace a diversion with a withdrawal, or replace a withdrawal with a diversion, or change the season of use, when it assists in the recovery of fish listed under the federal endangered species act as threatened or endangered;

(e) The proposed change or group of changes will result in providing public water supplies for at least one city and one town or at least two cities and will meet the general needs of the public for a regional area; or

(f) The proposed change is for the purposes of RCW 90.03.390.

(3) The department, any other state agency, or a water conservancy board shall not require an applicant to give any part of an applicant's valid right or claim to a state agency, to the trust water rights program, or to other parties.

(4) The department may adopt rules to implement this section, but such rules must strictly adhere to the provisions of this section.

(5) Pending applications for new water rights are not entitled to protection from impairment or given priority for any available water if the department or a water conservancy board processes an application for change from the same water source. New water rights issued after an application for change is approved from the same water source are not entitled to protection from impairment or priority for any available water in relation to the changed, transferred, or amended water right regardless of the dates on which the applications were filed with the department or the board.

(6) Notice of an application for a change of a water right must be published for the same period and in the same manner as prescribed for an application for a permit by RCW 90.03.280 in the county or counties in which water for the right is withdrawn or diverted and used, although the department may also post notice of the application on the internet at an electronic site containing other departmental information. The department or water conservancy board shall consider all comments received in writing by mail or personal delivery that are received within thirty days of the date of the last newspaper publication of the notice required under RCW 90.03.280.

(7) As used in this section:

(a) "Change of a water right" or "change" means a change or transfer of a water right referred to in RCW 90.03.380 or 90.03.390 or an amendment referred to in RCW 90.44.100 or 90.44.105; and

(b) "Water conservancy board" or "board" means a water conservancy board created under chapter 90.80 RCW."

Correct the title.

Representatives G. Chandler and Linville spoke in favor of the adoption of the amendment.

Representatives Dunshee, Regala and Veloria spoke against the adoption of the amendment.

The amendment was adopted.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives G. Chandler and Linville spoke in favor of passage of the bill.

Speaker Ballard stated the question before the House to be final passage of Substitute Senate Bill No. 6525, as amended by the House.

ROLL CALL

The Clerk called the roll on the final passage of Substitute Senate Bill No. 6525, as amended by the House, and the bill passed the House by the following vote: Yeas - 67, Nays - 31, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Ballasiotes, Barlean, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carrell, B. Chandler, G. Chandler, Clements, Cox, Crouse, DeBolt, Delvin, Doumit, Dunn, Edwards, Eickmeyer, Esser, Fortunato, Grant, Haigh, Hankins, Hatfield, Huff, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Lovick, Mastin, McDonald, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, O'Brien, Parlette, Pennington, Pflug, Quall, Radcliff, Rockefeller, Ruderman, Santos, Schindler, Schmidt, Schoesler, Scott, Skinner, D. Sommers, H. Sommers, Sump, Talcott, Thomas, Tokuda, Van Luven, Wensman, Woods and Mr. Speaker Ballard - 67.

Voting nay: Representatives Anderson, Carlson, Cody, Constantine, Conway, Cooper, Dickerson, Dunshee, Edmonds, Ericksen, Fisher, Gombosky, Hurst, Kagi, Kastama, Keiser, Kenney, McIntire, Murray, Ogden, Poulsen, Reardon, Regala, Romero, Schual-Berke, Stensen, Sullivan, Veloria, Wolfe, Wood and Mr. Speaker Chopp - 31.

Substitute Senate Bill No. 6525, as amended by the House, having received the constitutional majority, was declared passed.

STATEMENT FOR THE JOURNAL

I intended to vote YEA on Substitute Senate Bill No. 6525 as amended by the House.

DOUG ERICKSEN, 42^nd District

There being no objection, the rules were suspended, the Committee on Education was relieved of House Bill No. 2760 and the bill was placed on Second Reading.

SECOND READING

HOUSE BILL NO. 2760, by Representatives Quall, Carlson, Lovick, Constantine, Regala, Haigh, Tokuda, Linville, Keiser, Stensen, Conway, Wood, Morris, Kenney and Ogden; by request of Governor Locke

Promoting standards for educator quality.

The bill was read the second time.

Representative Quall moved the adoption of the following amendment (691):

Strike everything after the enacting clause and insert the following:

"PART 1

PROFESSIONAL EDUCATOR STANDARDS BOARD

NEW SECTION. Sec. 101. INTENT. The legislature finds and declares:

(1) Creation of a public body whose focus is educator quality would be likely to bring greater focus and attention to the profession;

(2) Professional educator standards boards are consumer protection boards, establishing assessment policies to ensure the public that its new practitioners have the knowledge to be competent;

(3) The highest possible standards for all educators are essential in ensuring attainment of high academic standards by all students;

(4) Teacher assessment for certification can guard against admission to the teaching profession of persons who have not demonstrated that they are knowledgeable in the subjects they will be assigned to teach; and

(5) Teacher assessment for certification should be implemented as an additional element to the system of teacher preparation and certification.

NEW SECTION. Sec. 102. A new section is added to chapter 28A.410 RCW to read as follows:

WASHINGTON PROFESSIONAL EDUCATOR STANDARDS BOARD. (1) The Washington professional educator standards board is created, consisting of nineteen members to be appointed by the governor to four-year terms and the superintendent of public instruction, who shall be an ex officio, nonvoting member. No person may serve as a member of the board for more than two consecutive full terms. The governor shall annually appoint the chair of the board from among the teachers and principals on the board. No board member may serve as chair for more than two consecutive years.

(2) Seven of the members shall be public school teachers, one shall be a private school teacher, three shall represent higher education educator preparation programs, four shall be school administrators, two shall be educational staff associates, one shall be a parent, and one shall be a member of the public.

(3) Public school teachers appointed to the board must:

(a) Have at least three years of teaching experience in a Washington public school;

(b) Be currently certificated and actively employed in a teaching position; and

(c) Include one teacher currently teaching at the elementary school level, one at the middle school level, one at the high school level, and one vocationally certificated.

(4) Private school teachers appointed to the board must:

(a) Have at least three years of teaching experience in a Washington approved private school; and

(b) Be currently certificated and actively employed in a teaching position in an approved private school.

(5) Appointees from higher education educator preparation programs must include two representatives from institutions of higher education as defined in RCW 28B.10.016 and one representative from an institution of higher education as defined in RCW 28B.07.020(4).

(6) School administrators appointed to the board must:

(a) Have at least three years of administrative experience in a Washington public school district;

(b) Be currently certificated and actively employed in a school administrator position; and

(7) Educational staff associates appointed to the board must:

(a) Have at least three years of educational staff associate experience in a Washington public school district; and

(b) Be currently certificated and actively employed in an educational staff associate position.

(8) Each major caucus of the house of representatives and the senate shall submit a list of at least one public school teacher. In making the public school teacher appointments, the governor shall select one nominee from each list provided by each caucus. The governor shall appoint the remaining members of the board from a list of qualified nominees submitted to the governor by organizations representative of the constituencies of the board, from applications from other qualified individuals, or from both nominees and applicants.

(9) All appointments to the board made by the governor shall be subject to confirmation by the senate.

(10) The governor shall appoint the members of the initial board no later than June 1, 2000.

(11) In appointing board members, the governor shall consider the diversity of the population of the state.

(12) Each member of the board shall be compensated in accordance with RCW 43.03.240 and shall be reimbursed for travel expenses incurred in carrying out the duties of the board in accordance with RCW 43.03.050 and 43.03.060.

(13) The governor may remove a member of the board for neglect of duty, misconduct, malfeasance or misfeasance in office, or for incompetency or unprofessional conduct as defined in chapter 18.130 RCW. In such a case, the governor shall file with the secretary of state a statement of the causes for and the order of removal from office, and the secretary of state shall send a certified copy of the statement of causes and order of removal to the last known post office address of the member.

(14) If a vacancy occurs on the board, the governor shall appoint a replacement member from the nominees as specified in subsection (8) of this section to fill the remainder of the unexpired term. When filling a vacancy of a member nominated by a major caucus of the legislature, the governor shall select the new member from a list of at least one name submitted by the same caucus that provided the list from which the retiring member was appointed.

(15) Members of the board shall hire an executive director and an administrative assistant to reside in the office of the superintendent of public instruction for administrative purposes only.

NEW SECTION. Sec. 103. A new section is added to chapter 28A.410 RCW to read as follows:

POWERS AND DUTIES OF THE BOARD. The Washington professional educator standards board shall:

(1) Serve as an advisory body to the superintendent of public instruction and as the sole advisory body to the state board of education on issues related to educator recruitment, hiring, preparation, certification including high quality alternative routes to certification, mentoring and support, professional growth, retention, governance, prospective teacher pedagogy assessment, prospective principal assessment, educator evaluation including but not limited to peer evaluation, and revocation and suspension of licensure;

(2) Submit annual reports and recommendations, beginning December 1, 2000, to the governor, the education and fiscal committees of the legislature, the state board of education, and the superintendent of public instruction concerning duties and activities within the board's advisory capacity. The Washington professional educator standards board shall submit a separate report by December 1, 2000, to the governor, the education and fiscal committees of the legislature, the state board of education, and the superintendent of public instruction providing recommendations for at least two high quality alternative routes to teacher certification. In its deliberations, the board shall consider at least one route that permits persons with substantial subject matter expertise to achieve residency certification through an on-the-job training program provided by a school district; and

(3) Establish the prospective teacher assessment system for basic skills and subject knowledge that shall be required to obtain residency certification pursuant to sections 201 through 203 of this act.

PART 2

TEACHER ASSESSMENT

NEW SECTION. Sec. 201. A new section is added to chapter 28A.410 RCW to read as follows:

(1)(a) Beginning not later than September 1, 2001, the Washington professional educator standards board shall make available and pilot a means of assessing an applicant's knowledge in the basic skills. For the purposes of this section, "basic skills" means the subjects of at least reading, writing, and mathematics. Beginning September 1, 2002, except as provided in (c) of this subsection and subsection (3) of this section, passing this assessment shall be required for admission to approved teacher preparation programs and for persons from out-of-state applying for a Washington state residency teaching certificate.

(b) On an individual student basis, approved teacher preparation programs may admit into their programs a candidate who has not achieved the minimum basic skills assessment score established by the Washington professional educator standards board. Individuals so admitted may not receive residency certification without passing the basic skills assessment under this section.

(c) The Washington professional educator standards board may establish criteria to ensure that persons from out-of-state who are applying for residency certification and persons applying to master's degree level teacher preparation programs can demonstrate to the board's satisfaction that they have the requisite basic skills based upon having completed another basic skills assessment acceptable to the Washington professional educator standards board or by some other alternative approved by the Washington professional educator standards board.

(2) Beginning not later than September 1, 2002, the Washington professional educator standards board shall provide for the initial piloting and implementation of a means of assessing an applicant's knowledge in the subjects for which the applicant has applied for an endorsement to his or her residency or professional teaching certificate. The assessment of subject knowledge shall not include instructional methodology. Beginning September 1, 2003, passing this assessment shall be required to receive an endorsement for certification purposes.

(3) The Washington professional educator standards board may permit exceptions from the assessment requirements under subsections (1) and (2) of this section on a case-by-case basis.

(4) The Washington professional educator standards board shall provide for reasonable accommodations for individuals who are required to take the assessments in subsection (1) or (2) of this section if the individuals have learning or other disabilities.

(5) With the exception of applicants exempt from the requirements of subsections (1) and (2) of this section, an applicant must achieve a minimum assessment score or scores established by the Washington professional educator standards board on each of the assessments under subsections (1) and (2) of this section.

(6) The Washington professional educator standards board and superintendent of public instruction, as determined by the Washington professional educator standards board, may contract with one or more third parties for:

(a) The development, purchase, administration, scoring, and reporting of scores of the assessments established by the Washington professional educator standards board under subsections (1) and (2) of this section;

(b) Related clerical and administrative activities; or

(7) Applicants for admission to a Washington teacher preparation program and applicants for residency and professional certificates who are required to successfully complete one or more of the assessments under subsections (1) and (2) of this section, and who are charged a fee for the assessment by a third party contracted with under subsection (6) of this section, shall pay the fee charged by the contractor directly to the contractor. Such fees shall be reasonably related to the actual costs of the contractor in providing the assessment.

(8) The superintendent of public instruction is responsible for supervision and providing support services to administer this section.

(9) The Washington professional educator standards board shall collaboratively select or develop and implement the assessments and minimum assessment scores required under this section with the superintendent of public instruction and shall provide opportunities for representatives of other interested educational organizations to participate in the selection or development and implementation of such assessments in a manner deemed appropriate by the Washington professional educator standards board.

(10) The Washington professional educator standards board shall adopt rules under chapter 34.05 RCW that are reasonably necessary for the effective and efficient implementation of this section.

(11) On September 1, 2003, all duties relating to teacher assessments as provided in this section are transferred to the superintendent of public instruction.

NEW SECTION. Sec. 202. A new section is added to chapter 28A.410 RCW to read as follows:

The Washington professional educator standards board shall report the proposed assessments to the legislative education committees for review and comment prior to implementing the assessments by contractual agreement with the selected vendor or vendors.

NEW SECTION. Sec. 203. A new section is added to chapter 28A.410 RCW to read as follows:

(1) By December 1, 2003, and annually thereafter, the Washington professional educator standards board shall prepare a report that includes the following information:

(a) The range of scores on the basic skills assessment under section 201(1) of this act for persons who passed the assessment and were admitted to a Washington preparation program; and

(b) The range of scores on the subject assessments under section 201(2) of this act for persons who passed the assessments and earned an endorsement.

(2) The information under subsection (1) of this section shall be reported for the individual public and private colleges and universities in Washington, as well as reported on an aggregate basis. The report shall also include results disaggregated demographically. The report shall include information on the number and percentage of candidates exempted from assessments, demographic information on candidates exempted, institutions attended and endorsements sought by exempted candidates, and reasons for exclusion from the required assessments. The report shall be made available through the state library, on the website of the office of superintendent of public instruction, and placed on the legislative alert list.

NEW SECTION. Sec. 204. By January 1, 2001, the partnership for excellence in teaching shall report to the governor, the education and fiscal committees of the legislature, the state board of education, and the superintendent of public instruction on its findings and recommendations concerning the governance of educator certification, licensure, and preparation issues and the scope of authority of the Washington professional educator standards board for the issues listed in section 103(1) of this act.

NEW SECTION. Sec. 205. RCW 28A.410.020 (Requirements for admission to teacher preparation programs--Rules) and 1996 c 309 s 1, 1991 c 116 s 20, 1988 c 251 s 4, & 1987 c 525 s 202, as now or hereafter amended, are each repealed, effective September 1, 2002.

PART 3

MISCELLANEOUS

NEW SECTION. Sec. 301. PART HEADINGS AND SECTION CAPTIONS NOT LAW. Part headings and section captions used in this act are not any part of the law."

Correct the title.

Representative Talcott moved the adoption of the following amendment (698) to the amendment:

On page 6, line 31, strike subsection (11)

Representative Talcott spoke in favor of the adoption of the amendment to the amendment.

The amendment to the amendment was adopted.

Representative Talcott moved the adoption of the following amendment (694) to the amendment:

On page 7, line 25, strike "partnership for excellence in teaching" and insert "Washington state institute for public policy"

Representative Talcott spoke in favor of the adoption of the amendment to the amendment.

The amendment to the amendment was adopted.

Representatives Quall, Talcott and Rockefeller spoke in favor of the adoption of the amendment as amended.

The amendment as amended was adopted.

The bill was ordered engrossed.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representative Cox spoke in favor of passage of the bill.

Representative Schindler spoke against passage of the bill.

Speaker Ballard stated the question before the House to be final passage of Engrossed House Bill No. 2760.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed House Bill No. 2760, and the bill passed the House by the following vote: Yeas - 88, Nays - 10, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Anderson, Ballasiotes, Barlean, Boldt, Buck, Bush, Cairnes, Campbell, Carlson, Carrell, B. Chandler, G. Chandler, Clements, Cody, Constantine, Conway, Cooper, Cox, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Edmonds, Edwards, Eickmeyer, Ericksen, Fisher, Fortunato, Gombosky, Grant, Haigh, Hankins, Hatfield, Huff, Hurst, Kagi, Kastama, Keiser, Kenney, Kessler, Lambert, Lantz, Linville, Lisk, Lovick, Mastin, McDonald, McIntire, McMorris, Mielke, Miloscia, Morris, Murray, O'Brien, Ogden, Pennington, Poulsen, Quall, Radcliff, Reardon, Regala, Rockefeller, Romero, Ruderman, Santos, Schmidt, Schoesler, Schual-Berke, Scott, Skinner, D. Sommers, H. Sommers, Stensen, Sullivan, Sump, Talcott, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 88.

Voting nay: Representatives Benson, Crouse, Esser, Koster, Mitchell, Mulliken, Parlette, Pflug, Schindler and Thomas - 10.

Engrossed House Bill No. 2760, having received the constitutional majority, was declared passed.

SENATE AMENDMENT TO HOUSE BILL

March 9, 2000

Mr. Speaker:

The Senate receded from the striking amendment(s) by the Transportation Committee to ENGROSSED SUBSTITUTE HOUSE BILL NO. 2675, adopted as amended on March 1, 2000. Under Suspension of Rules, the bill was returned to Second Reading for purpose of amendment(s). The Senate adopted amendment(s) #287, and passed the bill with the following amendment(s):

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature recognizes that fewer than five percent of all drivers use child booster seats for children over the age of four years. The legislature also recognizes that seventy-one percent of deaths resulting from car accidents could be eliminated if every child under the age of sixteen used an appropriate child safety seat, booster seat, or seat belt. The legislature further recognizes the National Transportation Safety Board's recommendations that promote the use of booster seats to increase the safety of children under eight years of age. Therefore, it is the legislature's intent to decrease deaths and injuries to children by promoting safety education and injury prevention measures, as well as increasing public awareness on ways to maximize the protection of children in vehicles.

Sec. 2. RCW 46.61.687 and 1994 c 100 s 1 are each amended to read as follows:

(1) Whenever a child who is less than ((ten)) sixteen years of age is being transported in a motor vehicle that is in operation and that is required by RCW 46.37.510 to be equipped with a safety belt system in a passenger seating position, the driver of the vehicle shall keep the child properly restrained as follows:

(a) If the child is less than six years old and/or sixty pounds and the passenger seating position equipped with a safety belt system allows sufficient space for installation, then the child will be restrained in a child restraint system that complies with standards of the United States department of transportation and that is secured in the vehicle in accordance with instructions of the manufacturer of the child restraint system;

(b) If the child is less than one year of age or weighs less than twenty pounds, the child shall be properly restrained in a rear-facing infant seat;

(c) If the child is more than one but less than ((three)) four years of age or weighs less than forty pounds but at least twenty pounds, the child shall be properly restrained in a forward facing child safety seat restraint system ((that complies with standards of the United States department of transportation and that is secured in the vehicle in accordance with instructions of the manufacturer of the child restraint system));

(((b))) (d) If the child is less than ((ten)) six but at least ((three)) four years of age or weighs less than sixty pounds but at least forty pounds, the child shall be properly restrained ((either as specified in (a) of this subsection or with a safety belt properly adjusted and fastened around the child's body.)) in a child booster seat;

(e) If the child is six years of age or older or weighs more than sixty pounds, the child shall be properly restrained with the motor vehicle's safety belt properly adjusted and fastened around the child's body or an appropriately fitting booster seat; and

(f) Enforcement of (a) through (e) of this subsection is subject to a visual inspection by law enforcement to determine if the child restraint system in use is appropriate for the child's individual height, weight, and age. The visual inspection for usage of a forward facing child safety seat must ensure that the seat in use is equipped with a four-point shoulder harness system. The visual inspection for usage of a booster seat must ensure that the seat belt properly fits across the child's lap and the shoulder strap crosses the center of the child's chest. The visual inspection for the usage of a seat belt by a child must ensure that the lap belt properly fits across the child's lap and the shoulder strap crosses the center of the child's chest. In determining violations, consideration to the above criteria must be given in conjunction with the provisions of (a) through (e) of this subsection. The driver of a vehicle transporting a child who is under the age of six years old or weighs less than sixty pounds, when the vehicle is equipped with a passenger side air bag supplemental restraint system, and the air bag system is activated, shall transport the child in the back seat positions in the vehicle where it is practical to do so.

(2) A person violating subsection (1)(a) through (e) of this section may be issued a notice of traffic infraction under chapter 46.63 RCW. If the person to whom the notice was issued presents proof of acquisition of an approved child passenger restraint system or a child booster seat, as appropriate, within seven days to the jurisdiction issuing the notice and the person has not previously had a violation of this section dismissed, the jurisdiction shall dismiss the notice of traffic infraction.

(3) Failure to comply with the requirements of this section shall not constitute negligence by a parent or legal guardian; nor shall failure to use a child restraint system be admissible as evidence of negligence in any civil action.

(4) This section does not apply to: (a) For hire vehicles, (b) vehicles designed to transport sixteen or less passengers, including the driver, operated by auto transportation companies, as defined in RCW 81.68.010, ((and)) (c) vehicles providing customer shuttle service between parking, convention, and hotel facilities, and airport terminals, and (d) school buses.

(5) As used in this section "child booster seat" means a child passenger restraint system that meets the Federal Motor Vehicle Safety Standards set forth in 49 C.F.R. 571.213 that is designed to elevate a child to properly sit in a federally approved lap/shoulder belt system.

(6) The requirements of subsection (1)(a) through (e) of this section do not apply in any seating position where there is only a lap belt available and the child weighs more than forty pounds.

Sec. 3. RCW 46.61.688 and 1990 c 250 s 58 are each amended to read as follows:

(1) For the purposes of this section, the term "motor vehicle" includes:

(a) "Buses," meaning motor vehicles with motive power, except trailers, designed to carry more than ten passengers;

(b) "Multipurpose passenger vehicles," meaning motor vehicles with motive power, except trailers, designed to carry ten persons or less that are constructed either on a truck chassis or with special features for occasional off-road operation;

(c) "Passenger cars," meaning motor vehicles with motive power, except multipurpose passenger vehicles, motorcycles, or trailers, designed for carrying ten passengers or less; and

(d) "Trucks," meaning motor vehicles with motive power, except trailers, designed primarily for the transportation of property.

(2) This section only applies to motor vehicles that meet the manual seat belt safety standards as set forth in federal motor vehicle safety standard 208. This section does not apply to a vehicle occupant for whom no safety belt is available when all designated seating positions as required by federal motor vehicle safety standard 208 are occupied.

(3) Every person sixteen years of age or older operating or riding in a motor vehicle shall wear the safety belt assembly in a properly adjusted and securely fastened manner.

(4) No person may operate a motor vehicle unless all child passengers under the age of sixteen years are either: (a) Wearing a safety belt assembly or (b) are securely fastened into an approved child restraint device.

(5) A person violating this section shall be issued a notice of traffic infraction under chapter 46.63 RCW. A finding that a person has committed a traffic infraction under this section shall be contained in the driver's abstract but shall not be available to insurance companies or employers.

(6) Failure to comply with the requirements of this section does not constitute negligence, nor may failure to wear a safety belt assembly be admissible as evidence of negligence in any civil action.

(7) Except for subsection (4)(b) of this section, which must be enforced as a primary action, enforcement of this section by law enforcement officers may be accomplished only as a secondary action when a driver of a motor vehicle has been detained for a suspected violation of Title 46 RCW or an equivalent local ordinance or some other offense.

(8) This section does not apply to an operator or passenger who possesses written verification from a licensed physician that the operator or passenger is unable to wear a safety belt for physical or medical reasons.

(9) The state patrol may adopt rules exempting operators or occupants of farm vehicles, construction equipment, and vehicles that are required to make frequent stops from the requirement of wearing safety belts.

NEW SECTION. Sec. 4. A new section is added to chapter 46.61 RCW to read as follows:

The traffic safety commission shall conduct an educational campaign using all available methods to raise public awareness of the importance of properly restraining child passengers and the value of seatbelts to adult motorists. The traffic safety commission shall report to the transportation committees of the legislature on the campaign and results observed on the highways. The first report is due December 1, 2000, and annually thereafter.

NEW SECTION. Sec. 5. This act may be known and cited as the Anton Skeen Act.

NEW SECTION. Sec. 6. This act takes effect July 1, 2002."

On page 1, line 1 of the title, after "systems;" strike the remainder of the title and insert "amending RCW 46.61.687 and 46.61.688; adding a new section to chapter 46.61 RCW; creating new sections; and providing an effective date."

and the same is herewith transmitted.

Tony M. Cook, Secretary

Speaker Ballard called upon Representative Pennington to preside.

There being no objection, the House concurred in the Senate amendment(s) to Engrossed Substitute House Bill No. 2675 and advanced the bill as amended by the Senate to final passage.

Representatives Skinner, Schual-Berke, Morris, Fortunato, Mitchell, Lovick, Fisher and Skinner (again) spoke in favor of final passage of the bill.

Representative Lambert spoke against the passage of the bill.

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

The Speaker (Representative Pennington presiding) stated the question before the House to be final passage of Engrossed Substitute House Bill No. 2675 as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 2675 as amended by the Senate and the bill passed the House by the following vote: Yeas - 83, Nays - 15, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Anderson, Ballasiotes, Barlean, Boldt, Buck, Bush, Cairnes, Campbell, Carlson, Carrell, B. Chandler, Clements, Cody, Constantine, Conway, Cooper, Cox, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Edmonds, Edwards, Eickmeyer, Ericksen, Esser, Fisher, Fortunato, Gombosky, Grant, Haigh, Hankins, Hatfield, Hurst, Kagi, Kastama, Keiser, Kenney, Kessler, Koster, Lantz, Linville, Lisk, Lovick, Mastin, McDonald, McIntire, Miloscia, Mitchell, Morris, Murray, O'Brien, Ogden, Pflug, Poulsen, Quall, Radcliff, Reardon, Regala, Rockefeller, Romero, Ruderman, Santos, Schmidt, Schoesler, Schual-Berke, Scott, Skinner, D. Sommers, H. Sommers, Stensen, Sullivan, Talcott, Tokuda, Van Luven, Veloria, Wolfe, Wood, Woods and Mr. Speaker Chopp - 83.

Voting nay: Representatives Benson, G. Chandler, Crouse, Huff, Lambert, McMorris, Mielke, Mulliken, Parlette, Pennington, Schindler, Sump, Thomas, Wensman and Mr. Speaker Ballard - 15.

Engrossed Substitute House Bill No. 2675, as amended by the Senate, having received the constitutional majority, was declared passed.

Speaker Ballard assumed the chair.

There being no objection, the rules were suspended and Substitute Senate Bill No. 6062 was introduced, read the first time and placed on Second Reading.

SECOND READING

SUBSTITUTE SENATE BILL NO. 6062, by Senate Committee on Ways & Means (originally sponsored by Senators Gardner, Spanel, West and Oke)

Providing a sales and use tax deferral for natural gas-fired energy generating facilities sited in rural areas.

The bill was read the second time.

Representative Dunshee moved the adoption of the following amendment (690):

On page On page 2, line 3, after "operation," insert "statement of intent to pay prevailing wages,"

On page 2, after line 27, insert:

"(c) "Qualifying generating facility" means a generating facility constructed and operated by persons who are paid no less than the prevailing rate of wage.

(d) "Statement of intent to pay prevailing wages" means a statement that has been approved by the industrial statistician of the department of labor and industries. The statement must include information similar to the information required for statements of intent to pay prevailing wages used for public works projects under RCW 39.12.040.

(e) "Prevailing rate of wage" is as defined in RCW 39.12.010."

On page 2, at the beginning of line 38, strike "used for the generation of electricity" and insert "a qualifying generating facility"

Renumber subsections consecutively, correct any internal references accordingly.

Representative Dunshee spoke against the adoption of the amendment.

The amendment was not adopted.

Representative Thomas moved the adoption of the following amendment (680):

On page 2, line 20 after "east" strike "six hundred" and insert "three hundred and ninety-five"

Representatives Thomas spoke in favor of the adoption of the amendment.

Representatives Dunshee, Ericksen and Mastin spoke against the adoption of the amendment.

The amendment was not adopted.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Linville, DeBolt, Ericksen, Cooper, Pennington, Morris, Carrell, Dunshee and Delvin spoke in favor of passage of the bill.

Representatives McIntire and Dickerson spoke against passage of the bill.

Speaker Ballard stated the question before the House to be final passage of Substitute Senate Bill No. 6062.

ROLL CALL

The Clerk called the roll on the final passage of Substitute Senate Bill No. 6062, and the bill passed the House by the following vote: Yeas - 69, Nays - 29, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Ballasiotes, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carrell, B. Chandler, G. Chandler, Clements, Cody, Conway, Cooper, Crouse, DeBolt, Delvin, Doumit, Dunn, Dunshee, Edwards, Eickmeyer, Ericksen, Grant, Hankins, Hatfield, Huff, Hurst, Keiser, Kenney, Kessler, Koster, Lambert, Linville, Lisk, Mastin, McDonald, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, O'Brien, Parlette, Pennington, Pflug, Quall, Radcliff, Reardon, Romero, Ruderman, Santos, Schindler, Schmidt, Scott, Skinner, D. Sommers, Stensen, Sullivan, Sump, Talcott, Wensman, Wolfe, Wood, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 69.

Voting nay: Representatives Anderson, Barlean, Carlson, Constantine, Cox, Dickerson, Edmonds, Esser, Fisher, Fortunato, Gombosky, Haigh, Kagi, Kastama, Lantz, Lovick, McIntire, Murray, Ogden, Poulsen, Regala, Rockefeller, Schoesler, Schual-Berke, H. Sommers, Thomas, Tokuda, Van Luven and Veloria - 29.

Substitute Senate Bill No. 6062, having received the constitutional majority, was declared passed.

MESSAGE FROM THE SENATE

March 9, 2000

Mr. Speaker:

The Senate has concurred in the House amendment(s) and has passed the following bills as amended by the House:

SUBSTITUTE SENATE BILL NO. 6531,

SENATE BILL NO. 6534,

and the same are herewith transmitted.

Brad J. Hendrickson, Deputy Secretary

MOTION FOR RECONSIDERATION

Representative Wensman, having voted on the prevailing side, moved that the House immediately reconsider the vote on Substitute Senate Bill No. 6062. The motion was carried.

RECONSIDERATION

Speaker Ballard stated the question before the House to be final passage of Substitute Senate Bill No. 6062 on reconsideration.

ROLL CALL

The Clerk called the roll on the final passage of Substitute Senate Bill No. 6062 on reconsideration and the bill passed the House by the following vote: Yeas - 67, Nays - 31, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Ballasiotes, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carrell, B. Chandler, G. Chandler, Clements, Cody, Conway, Cooper, Crouse, DeBolt, Delvin, Doumit, Dunn, Dunshee, Edwards, Eickmeyer, Ericksen, Grant, Hankins, Hatfield, Huff, Hurst, Keiser, Kenney, Kessler, Koster, Lambert, Linville, Lisk, Mastin, McDonald, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, O'Brien, Parlette, Pennington, Pflug, Quall, Radcliff, Reardon, Ruderman, Santos, Schindler, Schmidt, Scott, Skinner, D. Sommers, Stensen, Sullivan, Sump, Talcott, Wolfe, Wood, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 67.

Voting nay: Representatives Anderson, Barlean, Carlson, Constantine, Cox, Dickerson, Edmonds, Esser, Fisher, Fortunato, Gombosky, Haigh, Kagi, Kastama, Lantz, Lovick, McIntire, Murray, Ogden, Poulsen, Regala, Rockefeller, Romero, Schoesler, Schual-Berke, H. Sommers, Thomas, Tokuda, Van Luven, Veloria and Wensman - 31.

Substitute Senate Bill No. 6062, on reconsideration having received the constitutional majority, was declared passed.

SIGNED BY THE SPEAKERS

The Speakers signed:

SUBSTITUTE HOUSE BILL NO. 2392,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2420,

SUBSTITUTE HOUSE BILL NO. 2491,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2675,

SUBSTITUTE HOUSE BILL NO. 2850,

MESSAGE FROM THE SENATE

March 9, 2000

Mr. Speaker:

The Senate has passed:

ENGROSSED SENATE BILL NO. 6858,

and the same is herewith transmitted.

Tony M. Cook, Secretary

There being no objection, the rules were suspended, Engrossed Senate Bill No. 6858 was introduced and read the first time, and advanced to Second Reading.

SECOND READING

ENGROSSED SENATE BILL NO. 6858, by Senators Kohl-Welles, Heavey, Horn, Goings, Rasmussen, Eide and Winsley

Providing financing mechanisms to fund local government services.

The bill was read the second time.

There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Dickerson and Radcliff spoke in favor of passage of the bill.

Speaker Ballard stated the question before the House to be final passage of Engrossed Senate Bill No. 6858.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Senate Bill No. 6858 and the bill passed the House by the following vote: Yeas - 97, Nays - 1, Absent - 0, Excused - 0.

Voting yea: Representatives Alexander, Anderson, Ballasiotes, Barlean, Benson, Boldt, Buck, Bush, Cairnes, Campbell, Carlson, Carrell, B. Chandler, G. Chandler, Clements, Cody, Constantine, Conway, Cooper, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Edmonds, Edwards, Eickmeyer, Ericksen, Esser, Fisher, Fortunato, Gombosky, Grant, Haigh, Hankins, Hatfield, Huff, Hurst, Kagi, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Lovick, Mastin, McDonald, McIntire, McMorris, Mielke, Miloscia, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Pflug, Poulsen, Quall, Radcliff, Reardon, Regala, Rockefeller, Romero, Ruderman, Santos, Schindler, Schmidt, Schoesler, Schual-Berke, Scott, Skinner, D. Sommers, H. Sommers, Stensen, Sullivan, Sump, Talcott, Thomas, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Woods, Mr. Speaker Ballard and Mr. Speaker Chopp - 97.

Voting nay: Representative Cox - 1.

Engrossed Senate Bill No. 6858, having received the constitutional majority, was declared passed.

SENATE AMENDMENTS TO HOUSE BILL

March 9, 2000

Mr. Speaker:

The Senate receded from the Ways and Means Committee amendment(s) to SUBSTITUTE HOUSE BILL NO. 2460, adopted on March 8, 2000. Under Suspension of Rules, the bill was returned to Second Reading for purpose of amendment(s). The Senate adopted amendment(s) #291, and passed the bill with the following amendment(s):

On page 1, strike everything after the enacting clause and insert the following: