FIFTY NINTH LEGISLATURE - REGULAR SESSION





FIFTY EIGHTH DAY





House Chamber, Olympia, Tuesday, March 7, 2006


       The House was called to order at 10:00 a.m. by the Speaker (Representative Lovick presiding). The Clerk called the roll and a quorum was present.


       The flags was escorted to the rostrum by members of the Bothell Police Department's Honor Guard, comprised of Detective Mike Stone, Officer Robert Hensley, Officer Less Brooks and Officer Ethan Nguyen. The Speaker (Representative Lovick presiding) led the Chamber in the Pledge of Allegiance. Prayer was offered by Chaplain Chuck Goodwin, Bothell Police Department.


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


RESOLUTION


       HOUSE RESOLUTION NO. 2006-4712, By Representative Ericks, McDonald, Holmquist, Rodne, Pearson, Ericksen, Kristiansen, Ahern, Hinkle, Shabro, Schindler, Bailey, Hudgins, Blake, Kretz, Skinner, Hankins, Conway, Williams, Kessler, Kirby, Simpson, Morrell, Sells, Springer, Kilmer, McCoy, Moeller, Roberts, Hunt, Haler, Lovick, Hunter, Takko, Chase, McDermott, Appleton, Clibborn, Dunshee, Darneille, Upthegrove, Lantz, Wallace, O'Brien, Talcott, Kenney and Newhouse


       WHEREAS, The safety and well-being of the people of the State of Washington are dependent upon the efforts of the women and men of local, county, and state law enforcement; and

       WHEREAS, Women and men in law enforcement risk their lives daily for the protection of others, often putting the safety of others above that of their own, which allows us to live in safer and healthier communities; and

       WHEREAS, In the State of Washington, over the last ten years, 3,021 law enforcement officers have been assaulted in the line of duty and 17 have given their lives to protect the citizens of this state; and

       WHEREAS, Law enforcement officers have been called to protect and serve the citizens of our community, while maintaining the highest level of integrity and honesty; and

       WHEREAS, Since 9/11 law enforcement officers are not only charged with protecting the people of this state from domestic crimes, but have increased responsibility to provide protection against the threat of foreign terrorism; and


       WHEREAS, The people of the State of Washington thank the women and men of law enforcement for their service and excellent protection against crime and corruption, and commend them for their bravery, devotion to the rule of law, and dedication to serving the public;

       NOW, THEREFORE BE IT RESOLVED, That the House of Representatives recognize and honor the women and men who have served and currently serve as law enforcement officers in the State of Washington; and

       BE IT FURTHER RESOLVED, That copies of this resolution be immediately transferred by the Chief Clerk of the House of Representatives to the Washington Council of Police and Sheriffs and the Washington Association of Sheriffs and Police Chiefs.


       Representative Ericks moved the adoption of the resolution.


       Representatives Ericks and McDonald spoke in favor of the adoption of the resolution.


{{43138}}       HOUSE RESOLUTION NO. 4712 was adopted.


{{43139}}                POINT OF PERSONAL PRIVILEGE


       Representative Hunt: "Thank you, Mr. Speaker. As we wind down to the end of the Session, I want to remind the members of some things that go on around here. We show up everyday for hearings, for floor action, for various events and everything is always there in place for us. We get to a cutoff resolution, we take a big sigh of relief and head to dinner or to home or to our offices to put our feet up on the chair or desk and relax. However, there is tons of work that needs to be done. And a lot of that work is done by our OPR staff who are here with us today. With your permission, Mr. Speaker, I would like to have you invite them out on the floor. We have wonderfully talented, hard-working staff who prepare the amendments, do the hearings, are always here to help us – when we go home at night, they are still here. When we come here in the morning, they are already here. When we are taking a little time off Sunday, most of them were here working and slaving to make sure our jobs gets down. I just want to say on behalf of the House, a big thank you to all of you on the OPR staff for all the work you do because we couldn't do our jobs without your help and without your high quality work. Thank you."


{{43140}}                POINT OF PERSONAL PRIVILEGE


       Representative Armstrong: "Thank you, Mr. Speaker. I too want to echo the thanks to the OPR staff. Boy, it is a great looking crew, isn't it? We are extremely fortunate to work in this environment but I have to tell you that we all recognize that without the role you play that we would not be successful in what we do. I don't think we say thank you enough to each and everyone of you. I just want to make sure that you know how strong we feel about the work and how important the work you do is for us and the citizens of Washington State. So thank you very much."


MESSAGES FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate concurred in the House amendment to the following bills and passed the bills as amended by the House:

ENGROSSED SUBSTITUTE SENATE BILL NO. 6428,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6508,

{{43899}}and the same are herewith transmitted.

Thomas Hoemann, Secretary


March 6, 2006

Mr. Speaker:


       The Senate has passed:

SUBSTITUTE HOUSE BILL NO. 3033,

SUBSTITUTE HOUSE BILL NO. 3164,

HOUSE JOINT RESOLUTION NO. 4223,

and the same are herewith transmitted.

Thomas Hoemann, Secretary


March 7, 2006

Mr. Speaker:


       The Senate has passed:

HOUSE BILL NO. 2879,

SUBSTITUTE HOUSE BILL NO. 2933,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 3222,

SUBSTITUTE HOUSE BILL NO. 3282,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 3316,

and the same are herewith transmitted.

Thomas Hoemann, Secretary


MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 2871, with the following amendment:


        Strike everything after the enacting clause and insert the following:



        "NEW SECTION. Sec. 1. The legislature finds that effective transportation planning in urbanized regions requires stronger and clearer lines of responsibility and accountability.

        The legislature further finds that integrated, multimodal transportation planning will help reduce transportation congestion and improve safety, and that streamlined decision making will help reduce political congestion.

        The legislature further finds that coordinated planning of, investment in, and operation of transportation systems will have significant benefit to the citizens of Washington, and that it is the will of the people to fund regional transportation solutions, including improving transit service in urbanized areas and among existing, fragmented transit agencies in the region. Although equity considerations must be respected, transportation problems are broader and deeper than the sum of geographic subareas.

        It is therefore the policy of the state of Washington to create a regional transportation commission to develop a proposal for a regional transportation governing entity more directly accountable to the public, and to develop a comprehensive regional transportation finance plan for the citizens of the Puget Sound metropolitan region.


        NEW SECTION. Sec. 2. (1) The regional transportation commission is established.

        (2) The commission shall consist of seven voting commissioners. The commissioners shall be appointed by the governor by June 1, 2006. In addition, the secretary of transportation or the secretary's designee shall serve as a nonvoting member. Appointments of commissioners shall reflect geographical balance and diversity of populations within the central Puget Sound region and, to the extent possible, include commissioners with special expertise in relevant fields such as funding, planning, and construction of transportation improvement projects, structural reorganizations, and operation of transportation systems. Appointees must be citizen members who do not hold public office. Vacancies for any appointed commission seat shall be filled in the same manner as the original appointments were made.

        (3) The term of office for a commissioner begins seven days following appointment by the governor. A commissioner must be a qualified elector under the state Constitution when his or her term of office begins.

        (4) The commission chair presides over the commission and sets the commission agenda subject to general rules established by the commission. Except as provided otherwise in this act, the commission chair appoints all members of the committees, councils, and boards created by the rules of the commission. The commission chair shall be designated by the governor from among the commissioners appointed under subsection (2) of this section.

        (5) Each member of the commission is eligible to receive compensation in an amount not to exceed two hundred fifty dollars for each day during which the member attends an official meeting of the group or performs statutorily prescribed duties approved by the chair. A commissioner may be compensated under this subsection only if the compensation is necessarily incurred in the course of authorized business, consistent with the responsibilities of the commission established by this act.

        (6) The commission may be entitled to state funding, as appropriated by the legislature, to pay for expenses incurred by the commission and the department of transportation and through contracts in carrying out the duties authorized in this act.

        (7) The department of transportation shall provide staff support to the commission and, upon request of the commission, contract with other parties for staff support to the commission.


        NEW SECTION. Sec. 3. The regional transportation commission has the following duties:

        (1) Evaluate transportation governance in the central Puget Sound area within the jurisdiction of the Puget Sound regional council. This evaluation must include an assessment of the current roles of regional transportation agencies, including regional transportation and metropolitan planning organizations, the regional transit authority, regional transportation investment districts, county and municipal agencies operating transit services, and cities, counties, and other public agencies providing transportation services or facilities. The commission shall assess and develop recommendations for what steps should be taken to:

        (a) Consolidate governance among agencies, including changes in institutional powers, structures, and relationships and governance needed to improve accountability for transportation decisions, while enhancing the regional focus for transportation decisions and maintaining equity among citizens in the region;

        (b) Improve coordination in the planning of transportation investments and services;

        (c) Improve investment strategies;

        (d) Coordinate transportation planning and investments with adopted land use policies within the region;

        (e) Enhance efficiency and coordination in the delivery of services provided;

        (f) Adjust boundaries for agencies or functions within the region to address existing and future transportation and land use issues; and

        (g) Improve coordination between regional investments and federal funds, and state funding, including those administered by the transportation improvement board, the county road administration board, and the freight mobility strategic investment board;

        (2) Develop options for a regional transportation governance proposal that include, at a minimum, an option providing for the formation of a regional transportation governing entity, of which all or a majority of its members must be directly elected, the revenue sources that will be available to such entity, and the scope of planning authority of such entity;

        (3) Publicize the commission's proposal referenced in subsection (2) of this section by November 15, 2006, and provide at least fifteen days for public comment;

        (4) Adopt the proposal referenced in subsection (2) of this section and submit it to the legislature by January 1, 2007, after which time the commission shall dissolve; and

        (5) Conduct public meetings to assure active public participation in the development of the recommendations, proposal, and finance plan under this section.


        Sec. 4. RCW 36.120.020 and 2002 c 56 s 102 are each amended to read as follows:

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

        (1) "Board" means the governing body of a regional transportation investment district.

        (2) "Department" means the Washington state department of transportation.

        (3) "Highway of statewide significance" means an existing or proposed state route or federal interstate designated as a highway of statewide significance by the transportation commission, its successor entity, or the legislature.

        (4) "Lead agency" means a public agency that by law can plan, design, and build a transportation project and has been so designated by the district.


        (5) "Regional transportation investment district" or "district" means a municipal corporation ((whose boundaries are coextensive with two or more contiguous counties and)) that has been created by county legislative authorities and a vote of the people under this chapter to implement a regional transportation investment plan.

        (6) "Regional transportation investment district planning committee" or "planning committee" means the advisory committee created under RCW 36.120.030 to create and propose to county legislative authorities a regional transportation investment plan to develop, finance, and construct transportation projects.

        (7) "Regional transportation investment plan" or "plan" means a plan to develop, construct, and finance a transportation project or projects.

        (8) "Transportation project" means:

        (a) A capital improvement or improvements to a highway that has been designated, in whole or in part, as a highway of statewide significance, including an extension, that:

        (i) Adds a lane or new lanes to an existing state or federal highway; or

        (ii) Repairs or replaces a lane or lanes damaged by an event declared an emergency by the governor before January 1, 2002.

        (b) A capital improvement or improvements to all or a portion of a highway of statewide significance, including an extension, and may include the following associated multimodal capital improvements:

        (i) Approaches to highways of statewide significance;

        (ii) High-occupancy vehicle lanes;

        (iii) Flyover ramps;

        (iv) Park and ride lots;

        (v) Bus pullouts;

        (vi) Vans for vanpools;

        (vii) Buses; and

        (viii) Signalization, ramp metering, and other transportation system management improvements.

        (c) A capital improvement or improvements to all or a portion of a city street, county road, or existing highway or the creation of a new highway that intersects with a highway of statewide significance, if all of the following conditions are met:

        (i) The project is included in a plan that makes highway improvement projects that add capacity to a highway or highways of statewide significance;

        (ii) The secretary of transportation determines that the project would better relieve traffic congestion than investing that same money in adding capacity to a highway of statewide significance;

        (iii) Matching money equal to ((one-third)) fifteen percent of the total cost of the project is provided by local entities, including but not limited to a metropolitan planning organization, county, city, port, or private entity in which a county participating in a plan is located. Local entities may use federal grants to meet this matching requirement;

        (iv) In no case may the cumulative regional transportation investment district contribution to all projects constructed under this subsection (8)(c) exceed ten percent of the revenues generated by the district;

        (v) In no case may the cumulative regional transportation investment district contribution to all projects constructed under this subsection (8)(c) exceed one billion dollars; and

        (vi) The specific projects are included within the plan and submitted as part of the plan to a vote of the people.

        (d) Operations, preservation, and maintenance are excluded from this definition and may not be included in a regional transportation investment plan. However, operations, preservation, and maintenance for the following purposes are expressly authorized and may be included in a regional transportation investment plan:

        (i) Tolled facilities where toll revenues have been pledged for the payment of contracts. The authority under this subsection includes operational expenses for toll enforcement;

        (ii) Operational expenses for traffic mitigation provided solely for transportation project construction mitigation directly related to specific projects as outlined in the plan; and

        (iii) Passenger-only ferry service supported by the taxes authorized under RCW 82.14.430.

        (9) "Weighted vote" means a vote that reflects the population each board or planning committee member represents relative to the population represented by the total membership of the board or planning committee. Population will be determined using the federal 2000 census or subsequent federal census data.


        Sec. 5. RCW 36.120.030 and 2002 c 56 s 103 are each amended to read as follows:

        Regional transportation investment district planning committees are advisory entities that are created, convened, and empowered as follows:

        (1) A county with a population over one million five hundred thousand persons and any adjoining counties with a population over five hundred thousand persons may create a regional transportation investment district and shall convene a regional transportation investment district planning committee.

(a) The boundaries of the district should include at least the contiguous areas within the regional transit authority serving the counties. The boundaries must be proposed by the planning committee and approved by the county legislative authorities before or in conjunction with approval of a regional transportation investment plan. Boundaries must follow complete parcels of land. However, any portion of a county that is located on a peninsula shall be exempt from a regional transportation investment district in which more than one county is included if (i) the portion of the county located on the peninsula is connected to the other portion of the county by a bridge improved under chapter 47.46 RCW, and (ii) the county has a national park and a population of more than five hundred thousand persons, but less than one million five hundred thousand persons.

        (b) After voters within the district boundaries have approved a plan under RCW 36.120.070, elections to add areas to the district boundaries may be called by a resolution of the board, after consultation with the regional transportation planning organization and affected transit agencies and with the concurrence of the legislative authority of the city or town if the area is incorporated or with the concurrence of the county legislative authority if the area is unincorporated. The election may include a single ballot measure providing annexation to the district, approval of the plan, and approval of revenue sources necessary to finance the plan. The electorate are the voters voting within the proposed area to be annexed. A simple majority of the persons voting on the single ballot measure is required for approval of the measure. This option for annexation applies to areas within the counties initially establishing a district and also to areas within a county having a population over two hundred thirty thousand persons and whose boundaries abut three counties eligible to form a district under this subsection.

        (2) The members of the legislative authorities participating in planning under this chapter shall serve as the district planning committee. Members of the planning committee receive no compensation, but may be reimbursed for travel and incidental expenses as the planning committee deems appropriate.


        The secretary of transportation, or the appropriate regional administrator of the department, as named by the secretary, shall serve on the committee as a nonvoting member.

        (3) A regional transportation investment district planning committee may be entitled to state funding, as appropriated by the legislature, for start-up funding to pay for salaries, expenses, overhead, supplies, and similar expenses ordinarily and necessarily incurred in selecting transportation projects and funding for those transportation projects under this chapter. Upon creation of a regional transportation investment district, the district shall within one year reimburse the state for any sums advanced for these start-up costs from the state.

        (4) The planning committee shall conduct its affairs and formulate a regional transportation investment plan as provided under RCW 36.120.040, except that it shall elect an executive board of seven members to discharge the duties of the planning committee and formulate a regional transportation investment plan, subject to the approval of the full committee.

        (5) At its first meeting, a regional transportation investment district planning committee may elect officers and provide for the adoption of rules and other operating procedures.

        (6) Governance of and decisions by a regional transportation investment district planning committee must be by a sixty-percent weighted majority vote of the total membership.

        (7) The planning committee may dissolve itself at any time by a two-thirds weighted majority vote of the total membership of the planning committee.

(8) If a multicounty regional transportation investment district is not formed by December 1, 2007, through approval by the voters voting on a regional transportation investment plan, then the authority under this chapter to create a district, and to fund and construct transportation projects, shall be available to each of the eligible counties described in subsection (1) of this section on an individual and independent basis.


        Sec. 6. RCW 36.120.040 and 2003 c 194 s 1 are each amended to read as follows:

        (1) A regional transportation investment district planning committee shall adopt a regional transportation investment plan providing for the development, construction, and financing of transportation projects. The planning committee may consider the following factors in formulating its plan:

        (a) Land use planning criteria;

        (b) The input of cities located within a participating county; and

        (c) The input of regional transportation planning organizations ((in)) of which a participating county is ((located)) a member. A regional transportation planning organization in which a participating county is located shall review its adopted regional transportation plan and submit, for the planning committee's consideration, its list of transportation improvement priorities.

        (2) The planning committee may coordinate its activities with the department, which shall provide services, data, and personnel to assist in this planning as desired by the planning committee. In addition, the planning committee may coordinate its activities with affected cities, towns, and other local governments, including any regional transit authority existing within the participating counties' boundaries, that engage in transportation planning.

        (3) The planning committee shall:

        (a) Conduct public meetings that are needed to assure active public participation in the development of the plan;

        (b) Adopt a plan proposing the:

        (i) Creation of a regional transportation investment district, including district boundaries; and

        (ii) Construction of transportation projects to improve mobility within each county and within the region. Operations, maintenance, and preservation of facilities or systems may not be part of the plan, except for the limited purposes provided under RCW 36.120.020(8)(d); and

        (c) Recommend sources of revenue authorized by RCW 36.120.050 and a financing plan to fund selected transportation projects. The overall plan of the district must leverage the district's financial contributions so that the federal, state, local, and other revenue sources continue to fund major congestion relief and transportation capacity improvement projects in each county and the district. A combination of local, state, and federal revenues may be necessary to pay for transportation projects, and the planning committee shall consider all of these revenue sources in developing a plan.

        (4) The plan must use tax revenues and related debt for projects that generally benefit a participating county in proportion to the general level of tax revenues generated within that participating county. This equity principle applies to all modifications to the plan, appropriation of contingency funds not identified within the project estimate, and future phases of the plan. During implementation of the plan, the board shall retain the flexibility to manage distribution of revenues, debt, and project schedules so that the district may effectively implement the plan. Nothing in this section should be interpreted to prevent the district from pledging district-wide tax revenues for payment of any contract or debt entered into under RCW 36.120.130.

        (5) Before adopting the plan, the planning committee, with assistance from the department, shall work with the lead agency to develop accurate cost forecasts for transportation projects. This project costing methodology must be integrated with revenue forecasts in developing the plan and must at a minimum include estimated project costs in constant dollars as well as year of expenditure dollars, the range of project costs reflected by the level of project design, project contingencies, identification of mitigation costs, the range of revenue forecasts, and project and plan cash flow and bond analysis. The plan submitted to the voters must provide cost estimates for each project, including reasonable contingency costs. Plans submitted to the voters must provide that the maximum amount possible of the funds raised will be used to fund projects in the plan, including environmental improvements and mitigation, and that administrative costs be minimized. If actual revenue exceeds actual plan costs, the excess revenues must be used to retire any outstanding debt associated with the plan.

        (6) If a county opts not to adopt the plan or participate in the regional transportation investment district, but two or more contiguous counties do choose to continue to participate, then the planning committee may, within ninety days, redefine the regional transportation investment plan and the ballot measure to be submitted to the people to reflect elimination of the county, and submit the redefined plan to the legislative authorities of the remaining counties for their decision as to whether to continue to adopt the redefined plan and participate. This action must be completed within sixty days after receipt of the redefined plan.

        (7) Once adopted by the planning committee, the plan must be forwarded to the participating county legislative authorities to initiate the election process under RCW 36.120.070. The planning committee shall at the same time provide notice to each city and town within the district, the governor, the chairs of the transportation committees of the legislature, the secretary of transportation, and each legislator whose legislative district is partially or wholly within the boundaries of the district.

        (8) If the ballot measure is not approved, the planning committee may redefine the selected transportation projects, financing plan, and the ballot measure. The county legislative authorities may approve the new plan and ballot measure, and may then submit the revised proposition to the voters at the next election or a special election. If no ballot measure is approved by the voters by the third vote, the planning committee is dissolved.


        Sec. 7. RCW 36.120.070 and 2002 c 56 s 107 are each amended to read as follows:

(1) Two or more contiguous county legislative authorities, upon receipt of the regional transportation investment plan under RCW 36.120.040, may ((certify the plan to the ballot, including identification of the tax options)) submit to the voters of the proposed district a single ballot measure that approves formation of the district, approves the regional transportation investment plan, and approves the revenue sources necessary to ((fund)) finance the plan. ((County legislative authorities)) The planning committee may draft ((a ballot title,)) the ballot measure on behalf of the county legislative authorities, and the county legislative authorities may give notice as required by law for ballot measures, and perform other duties as required to ((put the plan before)) submit the measure to the voters of the proposed district for their approval or rejection ((as a single ballot measure that both approves formation of the district and approves the plan)). Counties may negotiate interlocal agreements necessary to implement the plan. The electorate will be the voters voting within the boundaries of the ((participating counties)) proposed district. A simple majority of the total persons voting on the single ballot measure ((to approve theplan, establish the district, and approve the taxes and fees)) is required for approval.

(2) In conjunction with RCW 81.112.030(10), prior to December 1, 2007, the plan must be submitted to the voters on the same ballot along with a proposition to support additional implementation phases of a regional transit authority's system and financing plan.


        Sec. 8. RCW 29A.36.071 and 2004 c 271 s 169 are each amended to read as follows:

        (1) Except as provided to the contrary in RCW 82.14.036, 82.46.021, or 82.80.090, the ballot title of any referendum filed on an enactment or portion of an enactment of a local government and any other question submitted to the voters of a local government consists of three elements: (a) An identification of the enacting legislative body and a statement of the subject matter; (b) a concise description of the measure; and (c) a question. The ballot title must conform with the requirements and be displayed substantially as provided under RCW 29A.72.050, except that the concise description must not exceed seventy-five words; however, a concise description submitted on behalf of a proposed or existing regional transportation investment district may exceed seventy- five words. If the local governmental unit is a city or a town, the concise statement shall be prepared by the city or town attorney. If the local governmental unit is a county, the concise statement shall be prepared by the prosecuting attorney of the county. If the unit is a unit of local government other than a city, town, or county, the concise statement shall be prepared by the prosecuting attorney of the county within which the majority area of the unit is located.

        (2) A referendum measure on the enactment of a unit of local government shall be advertised in the manner provided for nominees for elective office.

        (3) Subsection (1) of this section does not apply if another provision of law specifies the ballot title for a specific type of ballot question or proposition.


        Sec. 9. RCW 36.120.080 and 2002 c 56 s 108 are each amended to read as follows:

        If the voters approve the plan, including creation of a regional transportation investment district and imposition of taxes and fees, the district will be declared formed. The county election officials of participating counties shall, within fifteen days of the final certification of the election results, publish a notice in a newspaper or newspapers of general circulation in the district declaring the district formed, and mail copies of the notice to the governor, the secretary of transportation, the executive director of the regional transit authority in which any part of the district is located, and the executive director of the regional transportation planning organization in which any part of the district is located. A party challenging the procedure or the formation of a voter-approved district must file the challenge in writing by serving the prosecuting attorney of the participating counties and the attorney general within thirty days after the final certification of the election. Failure to challenge within that time forever bars further challenge of the district's valid formation.


        Sec. 10. RCW 36.120.110 and 2002 c 56 s 111 are each amended to read as follows:

        (1) The governing board of the district is responsible for the execution of the voter-approved plan. The board shall:

        (a) Impose taxes and fees authorized by district voters;

        (b) Enter into agreements with state, local, and regional agencies and departments as necessary to accomplish district purposes and protect the district's investment in transportation projects;

        (c) Accept gifts, grants, or other contributions of funds that will support the purposes and programs of the district;

        (d) Monitor and audit the progress and execution of transportation projects to protect the investment of the public and annually make public its findings;

        (e) Pay for services and enter into leases and contracts, including professional service contracts;

        (f) Hire no more than ten employees, including a director or executive officer, a treasurer or financial officer, a project manager or engineer, a project permit coordinator, and clerical staff; and

        (g) Coordinate its activities with affected cities, towns, and other local governments, including any regional transit authority existing either partially or entirely within the district area, that engage in transportation planning; and

        (h) Exercise other powers and duties as may be reasonable to carry out the purposes of the district.

        (2) It is the intent of the legislature that existing staff resources of lead agencies be used in implementing this chapter. A district may coordinate its activities with the department, which shall provide services, data, and personnel to assist as desired by the regional transportation investment district. Lead agencies for transportation projects that are not state facilities shall also provide staff support for the board.

        (3) A district may not acquire, hold, or dispose of real property.

        (4) Except for the limited purposes provided under RCW 36.120.020(8)(d), a district may not own, operate, or maintain an ongoing facility, road, or transportation system.

        (5) A district may accept and expend or use gifts, grants, or donations.


        (6) It is the intent of the legislature that administrative and overhead costs of a regional transportation investment district be minimized. For transportation projects costing up to fifty million dollars, administrative and overhead costs may not exceed three percent of the total construction and design project costs per year. For transportation projects costing more than fifty million dollars, administrative and overhead costs may not exceed three percent of the first fifty million dollars in costs, plus an additional one-tenth of one percent of each additional dollar above fifty million. These limitations apply only to the district, and do not limit the administration or expenditures of the department.

        (7) A district may use the design-build procedure for transportation projects developed by it. As used in this section "design-build procedure" means a method of contracting under which the district contracts with another party for that party to both design and build the structures, facilities, and other items specified in the contract. The requirements and limitations of RCW 47.20.780 and 47.20.785 do not apply to the transportation projects under this chapter.


        Sec. 11. RCW 81.112.030 and 1994 c 44 s 1 are each amended to read as follows:

        Two or more contiguous counties each having a population of four hundred thousand persons or more may establish a regional transit authority to develop and operate a high capacity transportation system as defined in chapter 81.104 RCW.

        The authority shall be formed in the following manner:

        (1) The joint regional policy committee created pursuant to RCW 81.104.040 shall adopt a system and financing plan, including the definition of the service area. This action shall be completed by September 1, 1992, contingent upon satisfactory completion of the planning process defined in RCW 81.104.100. The final system plan shall be adopted no later than June 30, 1993. In addition to the requirements of RCW 81.104.100, the plan for the proposed system shall provide explicitly for a minimum portion of new tax revenues to be allocated to local transit agencies for interim express services. Upon adoption the joint regional policy committee shall immediately transmit the plan to the county legislative authorities within the adopted service area.

        (2) The legislative authorities of the counties within the service area shall decide by resolution whether to participate in the authority. This action shall be completed within forty-five days following receipt of the adopted plan or by August 13, 1993, whichever comes first.

        (3) Each county that chooses to participate in the authority shall appoint its board members as set forth in RCW 81.112.040 and shall submit its list of members to the secretary of the Washington state department of transportation. These actions must be completed within thirty days following each county's decision to participate in the authority.

        (4) The secretary shall call the first meeting of the authority, to be held within thirty days following receipt of the appointments. At its first meeting, the authority shall elect officers and provide for the adoption of rules and other operating procedures.

        (5) The authority is formally constituted at its first meeting and the board shall begin taking steps toward implementation of the system and financing plan adopted by the joint regional policy committee. If the joint regional policy committee fails to adopt a plan by June 30, 1993, the authority shall proceed to do so based on the work completed by that date by the joint regional policy committee. Upon formation of the authority, the joint regional policy committee shall cease to exist. The authority may make minor modifications to the plan as deemed necessary and shall at a minimum review local transit agencies' plans to ensure feeder service/high capacity transit service integration, ensure fare integration, and ensure avoidance of parallel competitive services. The authority shall also conduct a minimum thirty-day public comment period.

        (6) If the authority determines that major modifications to the plan are necessary before the initial ballot proposition is submitted to the voters, the authority may make those modifications with a favorable vote of two-thirds of the entire membership. Any such modification shall be subject to the review process set forth in RCW 81.104.110. The modified plan shall be transmitted to the legislative authorities of the participating counties. The legislative authorities shall have forty-five days following receipt to act by motion or ordinance to confirm or rescind their continued participation in the authority.

        (7) If any county opts to not participate in the authority, but two or more contiguous counties do choose to continue to participate, the authority's board shall be revised accordingly. The authority shall, within forty-five days, redefine the system and financing plan to reflect elimination of one or more counties, and submit the redefined plan to the legislative authorities of the remaining counties for their decision as to whether to continue to participate. This action shall be completed within forty-five days following receipt of the redefined plan.

        (8) The authority shall place on the ballot within two years of the authority's formation, a single ballot proposition to authorize the imposition of taxes to support the implementation of an appropriate phase of the plan within its service area. In addition to the system plan requirements contained in RCW 81.104.100(2)(d), the system plan approved by the authority's board before the submittal of a proposition to the voters shall contain an equity element which:

        (a) Identifies revenues anticipated to be generated by corridor and by county within the authority's boundaries;

        (b) Identifies the phasing of construction and operation of high capacity system facilities, services, and benefits in each corridor. Phasing decisions should give priority to jurisdictions which have adopted transit-supportive land use plans; and

        (c) Identifies the degree to which revenues generated within each county will benefit the residents of that county, and identifies when such benefits will accrue.

        A simple majority of those voting within the boundaries of the authority is required for approval. If the vote is affirmative, the authority shall begin implementation of the projects identified in the proposition. However, the authority may not submit any authorizing proposition for voter-approved taxes prior to July 1, 1993; nor may the authority issue bonds or form any local improvement district prior to July 1, 1993.

        (9) If the vote on a proposition fails, the board may redefine the proposition, make changes to the authority boundaries, and make corresponding changes to the composition of the board. If the composition of the board is changed, the participating counties shall revise the membership of the board accordingly. The board may then submit the revised proposition or a different proposition to the voters. No single proposition may be submitted to the voters more than twice.

(10) The authority may place additional propositions on the ballot to impose taxes to support additional phases of plan implementation. In conjunction with RCW 36.120.070, prior to December 1, 2007, the proposition must be submitted to the voters on the same ballot along with a proposed regional transportation investment plan.


        (11) If the authority is unable to achieve a positive vote on a proposition within two years from the date of the first election on a proposition, the board may, by resolution, reconstitute the authority as a single-county body. With a two-thirds vote of the entire membership of the voting members, the board may also dissolve the authority.


        Sec. 12. RCW 36.120.050 and 2003 c 350 s 4 are each amended to read as follows:

        (1) A regional transportation investment district planning committee may, as part of a regional transportation investment plan, recommend the imposition of some or all of the following revenue sources, which a regional transportation investment district may impose upon approval of the voters as provided in this chapter:

        (a) A regional sales and use tax, as specified in RCW 82.14.430, of up to 0.5 percent of the selling price, in the case of a sales tax, or value of the article used, in the case of a use tax, upon the occurrence of any taxable event in the regional transportation investment district;

        (b) A local option vehicle license fee, as specified under RCW 82.80.100, of up to one hundred dollars per vehicle registered in the district. As used in this subsection, "vehicle" means motor vehicle as defined in RCW 46.04.320. Certain classes of vehicles, as defined under chapter 46.04 RCW, may be exempted from this fee;

        (c) A parking tax under RCW 82.80.030;

        (d) A local motor vehicle excise tax under RCW 81.100.060 ((and chapter 81.104 RCW));

        (e) A local option fuel tax under RCW 82.80.120;

        (f) An employer excise tax under RCW 81.100.030; and

        (g) Vehicle tolls on new or reconstructed ((facilities.)) local or regional arterials or state or federal highways within the boundaries of the district, if the following conditions are met:

        (i) Any such toll must be approved by the state transportation commission or its successor;

        (ii) The regional transportation investment plan must identify the facilities that may be tolled; and

        (iii) Unless otherwise specified by law, the department shall administer the collection of vehicle tolls on designated facilities, and the state transportation commission, or its successor, shall be the tolling authority.

        (2) Taxes, fees, and tolls may not be imposed without an affirmative vote of the majority of the voters within the boundaries of the district voting on a ballot proposition as set forth in RCW 36.120.070. Revenues from these taxes and fees may be used only to implement the plan as set forth in this chapter. A district may contract with the state department of revenue or other appropriate entities for administration and collection of any of the taxes or fees authorized in this section.

        (3) Existing statewide motor vehicle fuel and special fuel taxes, at the distribution rates in effect on January 1, 2001, are not intended to be altered by this chapter.


        Sec. 13. RCW 81.100.080 and 1990 c 43 s 19 are each amended to read as follows:

        Funds collected under RCW 81.100.030 or 81.100.060 and any investment earnings accruing thereon shall be used by the county or the regional transportation investment district in a manner consistent with the regional transportation plan only for costs of collection, costs of preparing, adopting, and enforcing agreements under RCW 81.100.030(3), for construction of high occupancy vehicle lanes and related facilities, mitigation of environmental concerns that result from construction or use of high occupancy vehicle lanes and related facilities, by an investment district for projects contained in a plan developed under chapter 36.120 RCW, payment of principal and interest on bonds issued for the purposes of this section, for high occupancy vehicle programs as defined in RCW 81.100.020(5), and for commuter rail projects in accordance with RCW 81.104.120. Except for funds raised by an investment district, no funds collected under RCW 81.100.030 or 81.100.060 after June 30, 2000, may be pledged for the payment or security of the principal or interest on any bonds issued for the purposes of this section. Not more than ten percent of the funds may be used for transit agency high occupancy vehicle programs.

        Priorities for construction of high occupancy vehicle lanes and related facilities shall be as follows:

        (1)(a) To accelerate construction of high occupancy vehicle lanes on the interstate highway system, as well as related facilities;

        (b) To finance or accelerate construction of high occupancy vehicle lanes on the noninterstate state highway system, as well as related facilities.

        (2) To finance construction of high occupancy vehicle lanes on local arterials, as well as related facilities.

        Moneys received by ((an agency)) a county under this chapter shall be used in addition to, and not as a substitute for, moneys currently used by the ((agency)) county for the purposes specified in this section.

        Counties and investment districts may contract with cities or the state department of transportation for construction of high occupancy vehicle lanes and related facilities, and may issue general obligation bonds to fund such construction and use funds received under this chapter to pay the principal and interest on such bonds.


        Sec. 14. RCW 81.100.060 and 2002 c 56 s 411 are each amended to read as follows:

        A county with a population of one million or more and a county with a population of from two hundred ten thousand to less than one million that is adjoining a county with a population of one million or more, having within their boundaries existing or planned high-occupancy vehicle lanes on the state highway system, or a regional transportation investment district ((for capital improvements)), but only to the extent that the surcharge has not already been imposed by the county, may, with voter approval, impose a local surcharge of not more than three-tenths of one percent in the case of a county, or eight-tenths of one percent in the case of a regional transportation investment district, of the value on vehicles registered to a person residing within the county or investment district and not more than 13.64 percent on the state sales and use taxes paid under the rate in RCW 82.08.020(2) on retail car rentals within the county or investment district. A county may impose the surcharge only to the extent that it has not been imposed by the district. No surcharge may be imposed on vehicles licensed under RCW 46.16.070 except vehicles with an unladen weight of six thousand pounds or less, RCW 46.16.079, 46.16.085, or 46.16.090.

        Counties or investment districts imposing a ((tax)) surcharge under this section shall contract, before the effective date of the resolution or ordinance imposing a surcharge, administration and collection to the state department of licensing, and department of revenue, as appropriate, which shall deduct ((an)) a percentage amount, as provided by contract, not to exceed two percent of the taxes, for administration and collection expenses incurred by the department. All administrative provisions in chapters 82.03, 82.32, and 82.44 RCW shall, insofar as they are applicable to motor vehicle excise taxes, be applicable to surcharges imposed under this section. All administrative provisions in chapters 82.03, 82.08, 82.12, and 82.32 RCW shall, insofar as they are applicable to state sales and use taxes, be applicable to surcharges imposed under this section. A surcharge imposed under this section, or a change to the surcharge, shall take effect no sooner than seventy-five days after the department of licensing or the department of revenue receives notice of the surcharge or change to the surcharge, and shall take effect only on the first day of January, April, July, or October. Unless waived by the department of licensing or the department of revenue, notice includes providing the appropriate department with digital mapping and legal descriptions of areas in which the tax will be collected.

        If the tax authorized in RCW 81.100.030 is also imposed, the total proceeds from tax sources imposed under this section and RCW 81.100.030 each year shall not exceed the maximum amount which could be collected under this section.


        Sec. 15. RCW 82.14.0455 and 2005 c 336 s 15 are each amended to read as follows:

        (1) Subject to the provisions in RCW 36.73.065, a transportation benefit district under chapter 36.73 RCW may fix and impose a sales and use tax in accordance with the terms of this chapter. The tax authorized in this section is 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 boundaries of the district. The rate of tax shall not exceed two-tenths of one percent of the selling price in the case of a sales tax, or value of the article used, in the case of a use tax. The tax may not be imposed for a period exceeding ten years. This tax may be extended for a period not exceeding ten years with an affirmative vote of the voters voting at the election.

        (2) Money received from the tax imposed under this section must be spent in accordance with the requirements of chapter 36.73 RCW.

        (((3) A district may only levy the tax under this section if the district is comprised of boundaries coextensive with the boundaries of a county, counties, city or cities, a county transportation authority or authorities, a public transportation benefit area or areas, or any combination of these jurisdictions.))


        Sec. 16. RCW 82.14.430 and 2002 c 56 s 405 are each amended to read as follows:

        (1) If approved by the majority of the voters within its boundaries voting on the ballot proposition, a regional transportation investment district may impose a sales and use tax of up to 0.5 percent of the selling price or value of the article used in the case of a use tax. The tax authorized by this section is in addition to the tax authorized by RCW 82.14.030 and must 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 taxing district. Motor vehicles are exempt from the sales and use tax imposed under this subsection. In addition to being used for projects in a regional transportation investment plan under chapter 36.120 RCW, proceeds from the taxes under this section may be used for passenger-only ferry service.

        (2) If approved by the majority of the voters within its boundaries voting on the ballot proposition, a regional transportation investment district may impose a tax on the use of a motor vehicle within a regional transportation investment district. The tax applies to those persons who reside within the regional transportation investment district. The rate of the tax may not exceed ((0.5)) 0.1 percent of the value of the motor vehicle. The tax authorized by this subsection is in addition to the tax authorized under RCW 82.14.030 and must be imposed and collected at the time a taxable event under RCW 82.08.020(1) or 82.12.020 takes place. All revenue received under this subsection must be deposited in the local sales and use tax account and distributed to the regional transportation investment district according to RCW 82.14.050. The following provisions apply to the use tax in this subsection:

        (a) Where persons are taxable under chapter 82.08 RCW, the seller shall collect the use tax from the buyer using the collection provisions of RCW 82.08.050.

        (b) Where persons are taxable under chapter 82.12 RCW, the use tax must be collected using the provisions of RCW 82.12.045.

        (c) "Motor vehicle" has the meaning provided in RCW 46.04.320, but does not include farm tractors or farm vehicles as defined in RCW 46.04.180 and 46.04.181, off-road and nonhighway vehicles as defined in RCW 46.09.020, and snowmobiles as defined in RCW 46.10.010.

        (d) "Person" has the meaning given in RCW 82.04.030.

        (e) The value of a motor vehicle must be determined under RCW 82.12.010.

        (f) Except as specifically stated in this subsection (2), chapters 82.12 and 82.32 RCW apply to the use tax. The use tax is a local tax imposed under the authority of chapter 82.14 RCW, and chapter 82.14 RCW applies fully to the use tax.

(3) In addition to fulfilling the notice requirements under RCW 82.14.055(1), and unless waived by the department, a regional transportation investment district shall provide the department of revenue with digital mapping and legal descriptions of areas in which the tax will be collected.


        NEW SECTION. Sec. 17. A new section is added to chapter 36.120 RCW to read as follows:

        A regional transportation investment district may adopt system-wide pricing policies and an implementation plan for the regional transportation system within its boundaries. "System-wide pricing" includes the tolling authority provided in RCW 36.120.050, network value-pricing authority provided in section 19 of this act, the authority to set regional transit fares as provided in RCW 81.112.080(4), and other system pricing tools as determined by the district governing board. System-wide pricing charges authorized by this act may be imposed to improve performance of the regional transportation system, improve integration of transportation modes, finance transportation improvements, and measure needed investments. Pricing charges may vary for type of vehicle, time of day, traffic conditions, and other factors. System-wide pricing policies under this section are subject to the approval of the state transportation commission or its statutory successor.


        Sec. 18. RCW 82.80.120 and 2003 c 350 s 3 are each amended to read as follows:

        (1) For purposes of this section:

        (a) "Distributor" means every person who imports, refines, manufactures, produces, or compounds motor vehicle fuel and special fuel as defined in RCW 82.36.010 and 82.38.020, respectively, and sells or distributes the fuel into a county;

        (b) "Person" has the same meaning as in RCW 82.04.030;

        (c) "District" means a regional transportation investment district under chapter 36.120 RCW.

        (2) A regional transportation investment district under chapter 36.120 RCW, subject to the conditions of this section, may levy additional excise taxes equal to ten percent of the statewide motor vehicle fuel tax rate under RCW 82.36.025 on each gallon of motor vehicle fuel as defined in RCW 82.36.010 and on each gallon of special fuel as defined in RCW 82.38.020 sold within the boundaries of the district. The additional excise tax is subject to the approval of a majority of the voters within the district boundaries. Vehicles paying an annual license fee under RCW 82.38.075 are exempt from the district's fuel excise tax. The additional excise taxes are subject to the same exceptions and rights of refund as applicable to other motor vehicle fuel and special fuel excise taxes levied under chapters 82.36 and 82.38 RCW. The proposed tax may not be levied less than one month from the date the election results are certified. The commencement date for the levy of any tax under this section will be the first day of January, April, July, or October.

        (3) The local option motor vehicle fuel tax on each gallon of motor vehicle fuel and on each gallon of special fuel is imposed upon the distributor of the fuel.

        (4) A taxable event for the purposes of this section occurs upon the first distribution of the fuel within the boundaries of the district to a retail outlet, bulk fuel user, or ultimate user of the fuel.

        (5) All administrative provisions in chapters 82.01, 82.03, and 82.32 RCW, insofar as they are applicable, apply to local option fuel taxes imposed under this section.

        (6) Before the effective date of the imposition of the fuel taxes under this section, a district shall contract with the department of revenue for the administration and collection of the taxes. The contract must provide that a percentage amount, not to exceed one percent of the taxes imposed under this section, will be deposited into the local tax administration account created in the custody of the state treasurer. The department of revenue may spend money from this account, upon appropriation, for the administration of the local taxes imposed under this section.

        (7) The state treasurer shall distribute monthly to the district levying the tax as part of the regional transportation investment district plan, after the deductions for payments and expenditures as provided in RCW 46.68.090(1) (a) and (b).

        (8) The proceeds of the additional taxes levied by a district in this section, to be used as a part of a regional transportation investment district plan, must be used in accordance with chapter 36.120 RCW, but only for those areas that are considered "highway purposes" as that term is construed in Article II, section 40 of the state Constitution.

        (9) A district may only levy the tax under this section if the district is comprised of boundaries identical to the boundaries of a county or counties. A district may not levy the tax in this section if a member county is levying the tax in RCW 82.80.010 or 82.80.110.


        NEW SECTION. Sec. 19. A new section is added to chapter 36.120 RCW to read as follows:

        (1) A regional transportation investment district may impose a network value-pricing charge based upon vehicle travel. This charge may be, but is not limited to, a charge upon the vehicle miles traveled within the district by a vehicle, or upon vehicle miles traveled within certain corridors in the district, or upon total vehicle miles traveled by a vehicle registered to a person whose legal residence is within the district. Network value-pricing charges imposed may vary by type of vehicle, time of day, traffic conditions, and other factors.

        (2) Charges imposed may be collected either periodically in a manner prescribed by the district governing board or annually by the department of licensing upon renewal of the vehicle license. The district governing board may identify categories of miles driven that are subject to or exempt from the charge including, but not limited to, travel outside the district, travel in specified corridors, time of travel, or exempt or maximum mileage charges.

        (3) The mileage charge under this section is subject to the approval of the state transportation commission or its statutory successor.

        (4) A district governing board imposing a mileage charge collected annually by the state department of licensing upon renewal of the vehicle license shall enter into a contract with the department of licensing. The contract must contain provisions that fully recover the costs to the department of licensing for collection and administration of the charge. The district governing board imposing this charge or initiating an exemption process shall provide at least six months' notice to the department of licensing before the implementation of any changes in registration amounts or exemptions.


        Sec. 20. RCW 47.56.076 and 2005 c 335 s 3 are each amended to read as follows:

        Upon approval of a majority of the voters within its boundaries voting on the ballot proposition, and ((only for the purposes authorized in RCW 36.120.050(1)(g))) with the approval of the state transportation commission or its successor, a regional transportation investment district may authorize vehicle tolls on a local or regional arterial or a state ((routes where improvements financed in whole or in part by a regional transportation investment district add additional lanes to, or reconstruct lanes on, a highway of statewide significance)) or federal highway within the boundaries of the district. The department shall administer the collection of vehicle tolls authorized on designated facilities unless otherwise specified in law or by contract, and the ((state transportation)) commission((,)) or its successor((,)) shall ((be the tolling authority)) set and impose the tolls in amounts sufficient to implement the regional transportation investment plan under RCW 36.120.020.


        NEW SECTION. Sec. 21. A new section is added to chapter 47.56 RCW to read as follows:

        Notwithstanding any provision to the contrary in this chapter, a regional transportation investment district may authorize vehicle tolls on either Lake Washington bridge within its boundaries to implement a regional transportation investment plan as authorized in chapter 36.120 RCW and RCW 47.56.076.


        Sec. 22. RCW 43.79A.040 and 2005 c 424 s 18, 2005 c 402 s 8, 2005 c 215 s 10, and 2005 c 16 s 2 are each reenacted and amended to read as follows:

        (1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.

        (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.

        (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment 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)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.

        (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington promise scholarship account, the college savings program account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the foster care scholarship endowment fund, the foster care endowed scholarship trust fund, the students with dependents grant account, the basic health plan self-insurance reserve account, the contract harvesting revolving account, the Washington state combined fund drive account, the commemorative works account, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the fruit and vegetable inspection account, the future teachers conditional scholarship account, the game farm alternative account, the grain inspection revolving fund, the juvenile accountability incentive account, the law enforcement officers' and fire fighters' plan 2 expense fund, the local tourism promotion account, the produce railcar pool account, the regional transportation investment district account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the sulfur dioxide abatement account, the children's trust fund, the Washington horse racing commission Washington bred owners' bonus fund account, the Washington horse racing commission class C purse fund account, the individual development account program account, the Washington horse racing commission operating account (earnings from the Washington horse racing commission operating account must be credited to the Washington horse racing commission class C purse fund account), and the life sciences discovery fund. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

        (c) 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 advanced right of way revolving fund, the advanced environmental mitigation revolving account, the city and county advance right-of-way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.

        (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.


        Sec. 23. RCW 43.84.092 and 2005 c 514 s 1105, 2005 c 353 s 3, 2005 c 339 s 22, 2005 c 314 s 109, 2005 c 312 s 7, and 2005 c 94 s 1 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 developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the education legacy trust account, the election account, the emergency reserve fund, The Evergreen State College capital projects account, the federal forest revolving account, the freight mobility investment 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 high-occupancy toll lanes operations 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 multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land 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 public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the Puyallup tribal settlement account, the real estate appraiser commission account, ((the regional transportation investment district account,)) the resource management cost account, the rural Washington loan fund, the site closure account, the small city pavement and sidewalk 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 Tacoma Narrows toll bridge 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 transportation partnership 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 fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, 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 health insurance pool 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 2003 account (nickel 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.


        Sec. 24. RCW 43.84.092 and 2005 c 514 s 1106, 2005 c 353 s 4, 2005 c 339 s 23, 2005 c 314 s 110, 2005 c 312 s 8, and 2005 c 94 s 2 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 developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the education legacy trust account, the election account, the emergency reserve fund, The Evergreen State College capital projects account, the federal forest revolving account, the freight mobility investment 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 high-occupancy toll lanes operations 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 multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land 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 public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public works assistance account, the Puyallup tribal settlement account, the real estate appraiser commission account, ((the regional transportation investment district account,)) the resource management cost account, the rural Washington loan fund, the site closure account, the small city pavement and sidewalk 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 Tacoma Narrows toll bridge 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 transportation partnership 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 fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, 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 public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool 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 2003 account (nickel 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.


        Sec. 25. RCW 36.73.015 and 2005 c 336 s 1 are each amended to read as follows:

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

        (1) "District" means a transportation benefit district created under this chapter.

        (2) "City" means a city or town.

        (3) "Transportation improvement" means a project contained in the transportation plan of the state or a regional transportation planning organization ((that is of statewide or regional significance)). A project may include investment in new or existing highways of statewide significance, principal arterials of regional significance, high-capacity transportation, public transportation, and other transportation projects and programs of regional or statewide significance including transportation demand management. Projects may also include the operation, preservation, and maintenance of these facilities or programs. ((Not more than forty percent of the revenues generated by a district may be expended on city streets, county roads, existing highways other than highways of statewide significance, and the creation of a new highway that intersects with a highway of statewide significance.))


        Sec. 26. RCW 36.73.020 and 2005 c 336 s 3 are each amended to read as follows:

        (1) The legislative authority of a county or city may establish a transportation benefit district within the county or city area or within the area specified in subsection (2) of this section, for the purpose of acquiring, constructing, improving, providing, and funding a transportation improvement within the district that is consistent with any existing state, regional, and local transportation plans and necessitated by existing or reasonably foreseeable congestion levels. The transportation improvements shall be owned by the county of jurisdiction if located in an unincorporated area, by the city of jurisdiction if located in an incorporated area, or by the state in cases where the transportation improvement is or becomes a state highway. However, if deemed appropriate by the governing body of the transportation benefit district, a transportation improvement may be owned by a participating port district or transit district, unless otherwise prohibited by law. Transportation improvements shall be administered and maintained as other public streets, roads, highways, and transportation improvements. To the extent practicable, the district shall consider the following criteria when selecting transportation improvements:

        (a) Reduced risk of transportation facility failure and improved safety;

        (b) Improved travel time;

        (c) Improved air quality;

        (d) Increases in daily and peak period trip capacity;

        (e) Improved modal connectivity;

        (f) Improved freight mobility;

        (g) Cost-effectiveness of the investment;

        (h) Optimal performance of the system through time; and

        (i) Other criteria, as adopted by the governing body.

        (2) ((Subject to subsection (6) of this section,)) The district may include area within more than one county, city, port district, county transportation authority, or public transportation benefit area, if the legislative authority of each participating jurisdiction has agreed to the inclusion as provided in an interlocal agreement adopted pursuant to chapter 39.34 RCW. However, the boundaries of the district ((shall)) need not include all territory within the boundaries of the participating jurisdictions comprising the district.

        (3) The members of the legislative authority proposing to establish the district, acting ex officio and independently, shall constitute the governing body of the district: PROVIDED, That where a district includes area within more than one jurisdiction under subsection (2) of this section, the district shall be governed under an interlocal agreement adopted pursuant to chapter 39.34 RCW. However, the governing body shall be composed of at least five members including at least one elected official from the legislative authority of each participating jurisdiction.

        (4) The treasurer of the jurisdiction proposing to establish the district shall act as the ex officio treasurer of the district, unless an interlocal agreement states otherwise.


        (5) The electors of the district shall all be registered voters residing within the district.

        (((6) The authority under this section, regarding the establishment of or the participation in a district, shall not apply to:

        (a) Counties with a population greater than one million five hundred thousand persons and any adjoining counties with a population greater than five hundred thousand persons;

        (b) Cities with any area within the counties under (a) of this subsection; and

        (c) Other jurisdictions with any area within the counties under (a) of this subsection.))


        NEW SECTION. Sec. 27. A new section is added to chapter 47.01 RCW to read as follows:

        The department shall not commence construction on any part of the state route number 520 bridge replacement and HOV project until agreements have been reached with the incorporated towns or cities directly affected by the project. The agreements must provide reasonable assurance that any degradation in the citizens' current use and enjoyment of their properties as a result of repairs and improvements made to the state route number 520 bridge and its connecting roadways will be addressed through engineering design choices, mitigation measures, or a combination of both.


        NEW SECTION. Sec. 28. A new section is added to chapter 36.120 RCW to read as follows:

        (1) Prior to a regional transportation public vote conducted under this chapter, the department of transportation must complete all of the following requirements for both the Alaskan Way viaduct and Seattle Seawall replacement project, and the state route number 520 bridge replacement and HOV project: (a) In accordance with the national environmental policy act, the department must designate the preferred alternative, prepare a substantial project mitigation plan, and complete a comprehensive cost estimate review using the department's cost estimate validation process, for each project; (b) in accordance with all applicable federal highway administration planning and project management requirements, the department must prepare a project finance plan for each project that clearly identifies secured and anticipated fund sources, cash flow timing requirements, and project staging and phasing plans if applicable; and (c) the department must report these results for each project to the joint transportation committee.

        (2) The requirements of this section shall not apply to (a) utility relocation work, and related activities, on the Alaskan Way viaduct and Seattle Seawall replacement project and (b) off-site pontoon construction, and related activities, supporting the state route number 520 bridge replacement and HOV project.


        Sec. 29. RCW 81.112.050 and 1998 c 192 s 1 are each amended to read as follows:

        (1) At the time of formation, the area to be included within the boundary of the authority shall be that area set forth in the system plan adopted by the joint regional policy committee. Prior to submitting the system and financing plan to the voters, the authority may make adjustments to the boundaries as deemed appropriate but must assure that, to the extent possible, the boundaries: (a) Include the largest-population urban growth area designated by each county under chapter 36.70A RCW; and (b) follow election precinct boundaries. If a portion of any city is determined to be within the service area, the entire city must be included within the boundaries of the authority.

        (2) After voters within the authority boundaries have approved the system and financing plan, elections to add areas contiguous to the authority boundaries may be called by resolution of the regional transit authority, after consultation with affected transit agencies and with the concurrence of the legislative authority of the city or town if the area is incorporated, or with the concurrence of the county legislative authority if the area is unincorporated. Only those areas that would benefit from the services provided by the authority may be included and services or projects proposed for the area must be consistent with the regional transportation plan. The election may include a single ballot proposition providing for annexation to the authority boundaries and imposition of the taxes at rates already imposed within the authority boundaries. Alternatively, the annexation proposition may be submitted as part of a proposition to support additional implementation phases of the authority's system and financing plan as provided in RCW 81.112.030(10), in which case a simple majority of the combined electorate, voting within the existing boundaries and the proposed area to be annexed, is required to approve the annexation, along with approval of the plan and the revenue sources necessary to finance the plan.

        (3) Upon receipt of a resolution requesting exclusion from the boundaries of the authority from a city whose municipal boundaries cross the boundaries of an authority and thereby result in only a portion of the city being subject to local option taxes imposed by the authority under chapters 81.104 and 81.112 RCW in order to implement a high-capacity transit plan, and where the vote to approve the city's incorporation occurred simultaneously with an election approving the local option taxes, then upon a two-thirds majority vote of the governing board of the authority, the governing board shall redraw the boundaries of the authority to exclude that portion of the city that is located within the authority's boundaries, and the excluded area is no longer subject to local option taxes imposed by the authority. This subsection expires December 31, 1998.


        NEW SECTION. Sec. 30. Section 23 of this act expires July 1, 2006.


        NEW SECTION. Sec. 31. Section 24 of this act takes effect July 1, 2006."


        On page 1, line 1 of the title, after "governance;" strike the remainder of the title and insert "amending RCW 36.120.020, 36.120.030, 36.120.040, 36.120.070, 29A.36.071, 36.120.080, 36.120.110, 81.112.030, 36.120.050, 81.100.080, 81.100.060, 82.14.0455, 82.14.430, 82.80.120, 47.56.076, 36.73.015, 36.73.020, and 81.112.050; reenacting and amending RCW 43.79A.040, 43.84.092, and 43.84.092; adding new sections to chapter 36.120 RCW; adding a new section to chapter 47.56 RCW; adding a new section to chapter 47.01 RCW; creating new sections; providing an effective date; and providing an expiration date."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House refused to concur in the Senate amendment to ENGROSSED SUBSTITUTE HOUSE BILL NO. 2871 and asked the Senate to recede therefrom.



{{43142}}                   MESSAGE FROM THE SENATE


March 1, 2006

Mr. Speaker:


       The Senate has passed ENGROSSED HOUSE BILL NO. 3261, with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "Sec. 1. RCW 9.95.003 and 1997 c 350 s 2 are each amended to read as follows:

        The board shall consist of a ((chairman)) chair, a vice-chair, and ((two)) three other members, each of whom shall be appointed by the governor with the consent of the senate. Each member shall hold office for a term of five years, and until his or her successor is appointed and qualified. The terms shall expire on April 15th of the expiration year. Vacancies in the membership of the board shall be filled by appointment by the governor with the consent of the senate. In the event of the inability of any member to act, the governor shall appoint some competent person to act in his stead during the continuance of such inability. The members shall not be removable during their respective terms except for cause determined by the superior court of Thurston county. The governor in appointing the members shall designate one of them to serve as chairman at the governor's pleasure.

        The members of the board and its officers and employees shall not engage in any other business or profession or hold any other public office without the prior approval of the executive ethics board indicating compliance with RCW 42.52.020, 42.52.030, 42.52.040 and 42.52.120; nor shall they, at the time of appointment or employment or during their incumbency, serve as the representative of any political party on an executive committee or other governing body thereof, or as an executive officer or employee of any political committee or association. The members of the board shall each severally receive salaries fixed by the governor in accordance with the provisions of RCW 43.03.040, and in addition shall receive travel expenses incurred in the discharge of their official duties in accordance with RCW 43.03.050 and 43.03.060.

        The board may employ, and fix, with the approval of the governor, the compensation of and prescribe the duties of a secretary and such officers, employees, and assistants as may be necessary, and provide necessary quarters, supplies, and equipment.


        Sec. 2. RCW 9.95.420 and 2002 c 174 s 1 are each amended to read as follows:

        (1)(a) Except as provided in (c) of this subsection, before the expiration of the minimum term, as part of the end of sentence review process under RCW 72.09.340, 72.09.345, and where appropriate, 72.09.370, the department shall conduct, and the offender shall participate in, an examination of the offender, incorporating methodologies that are recognized by experts in the prediction of sexual dangerousness, and including a prediction of the probability that the offender will engage in sex offenses if released.

        (b) The board may contract for an additional, independent examination, subject to the standards in this section.

        (c) If at the time the sentence is imposed by the superior court the offender's minimum term has expired or will expire within one hundred twenty days of the sentencing hearing, the department shall conduct, within ninety days of the offender's arrival at a department of corrections facility, and the offender shall participate in, an examination of the offender, incorporating methodologies that are recognized by experts in the prediction of sexual dangerousness, and including a prediction of the probability that the offender will engage in sex offenses if released.

        (2) The board shall impose the conditions and instructions provided for in RCW 9.94A.720. The board shall consider the department's recommendations and may impose conditions in addition to those recommended by the department. The board may impose or modify conditions of community custody following notice to the offender.

        (3)(a) Except as provided in (b) of this subsection, no later than ninety days before expiration of the minimum term, but after the board receives the results from the end of sentence review process and the recommendations for additional or modified conditions of community custody from the department, the board shall conduct a hearing to determine whether it is more likely than not that the offender will engage in sex offenses if released on conditions to be set by the board. The board may consider an offender's failure to participate in an evaluation under subsection (1) of this section in determining whether to release the offender. The board shall order the offender released, under such affirmative and other conditions as the board determines appropriate, unless the board determines by a preponderance of the evidence that, despite such conditions, it is more likely than not that the offender will commit sex offenses if released. If the board does not order the offender released, the board shall establish a new minimum term, not to exceed an additional two years.

        (b) If at the time the offender's minimum term has expired or will expire within one hundred twenty days of the offender's arrival at a department of correction's facility, then no later than one hundred twenty days after the offender's arrival at a department of corrections facility, but after the board receives the results from the end of sentence review process and the recommendations for additional or modified conditions of community custody from the department, the board shall conduct a hearing to determine whether it is more likely than not that the offender will engage in sex offenses if released on conditions to be set by the board. The board may consider an offender's failure to participate in an evaluation under subsection (1) of this section in determining whether to release the offender. The board shall order the offender released, under such affirmative and other conditions as the board determines appropriate, unless the board determines by a preponderance of the evidence that, despite such conditions, it is more likely than not that the offender will commit sex offenses if released. If the board does not order the offender released, the board shall establish a new minimum term, not to exceed an additional two years.

(4) In a hearing conducted under subsection (3) of this section, the board shall provide opportunities for the victims of any crimes for which the offender has been convicted to present oral, video, written, or in-person testimony to the board. The procedures for victim input shall be developed by rule. To facilitate victim involvement, county prosecutor's offices shall ensure that any victim impact statements and known contact information for victims of record are forwarded as part of the judgment and sentence.


        NEW SECTION. Sec. 3. Section 1 of this act takes effect April 15, 2007. Section 2 of this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately."



        On page 1, line 4 of the title, after "9.94A.712;" strike the remainder of the title and insert "amending RCW 9.95.003 and 9.95.420; providing an effective date; and declaring an emergency."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House refused to concur in the Senate amendment to ENGROSSED HOUSE BILL NO. 3261 and asked the Senate to recede therefrom.


MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate refuses to concur in the House amendments to SUBSTITUTE SENATE BILL NO. 6241 and asks the House for a Conference thereon. The President has appointed the following members as Conferees: Senators Haugen, Jacobsen and Benson.

Thomas Hoemann, Secretary


APPOINTMENT OF CONFEREES


       There being no objection, the House granted the Senate's request for a conference on SUBSTITUTE SENATE BILL NO. 6241.


       The Speaker (Representative Lovick presiding) appointed Representatives Murray, Wallace and Woods.


{{43144}}                   MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate refuses to concur in the House amendments to ENGROSSED SUBSTITUTE SENATE BILL NO. 6839 and asks the House for a Conference thereon. The President has appointed the following members as Conferees: Senators Haugen, Jacobsen and Benson.

Tom Hoemann, Secretary


APPOINTMENT TO CONFEREES


       There being no objection, the House granted the Senate's request for a conference on ENGROSSED SUBSTITUTE SENATE BILL NO. 6839.


       The Speaker (Representative Lovick presiding) appointed Representatives Murray, Wallace and Woods.


{{43145}}                   MESSAGE FROM THE SENATE

March 2, 2006

Mr. Speaker:


       The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 3079, with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "NEW SECTION. Sec. 1. A new section is added to chapter 70.47 RCW to read as follows:

        (1) The health care authority, in coordination with the department of social and health services, shall by November 15th of each year report to the legislature:

        (a) The number of basic health plan enrollees who: (i) Upon enrollment or recertification had reported being employed, and the month and year they reported being hired; (ii) upon enrollment or recertification had reported being the dependent of someone who was employed, and the month and year they reported the employed person was hired; and (iii) the total cost to the state for these enrollees. The information shall be reported by employer for employers having more than fifty employees as enrollees or with dependents as enrollees. This information shall be provided for the preceding January and June of that year.

        (b) The following aggregated information: (i) The number of employees who are enrollees or with dependents as enrollees by private and governmental employers; (ii) the number of employees who are enrollees or with dependents as enrollees by employer size for employers with fifty or fewer employees, fifty-one to one hundred employees, one hundred one to one thousand employees, one thousand one to five thousand employees and more than five thousand employees; and (iii) the number of employees who are enrollees or with dependents as enrollees by industry type.

        For each aggregated classification, the report will include the number of hours worked and total cost to the state for these enrollees. This information shall be for each quarter of the preceding year.


        NEW SECTION. Sec. 2. A new section is added to chapter 74.09 RCW to read as follows:

        (1) The department of social and health services, in coordination with the health care authority, shall by November 15th of each year report to the legislature:

        (a) The number of medical assistance recipients who: (i) Upon enrollment or recertification had reported being employed, and the month and year they reported being hired; or (ii) upon enrollment or recertification had reported being the dependent of someone who was employed, and the month and year they reported the employed person was hired. For recipients identified under (a)(i) and (ii) of this subsection, the department shall report the basis for their medical assistance eligibility, including but not limited to family medical coverage, transitional medical assistance, children's medical or aged or disabled coverage; member months; and the total cost to the state for these recipients, expressed as general fund-state, health services account and general fund-federal dollars. The information shall be reported by employer for employers having more than fifty employees as recipients or with dependents as recipients. This information shall be provided for the preceding January and June of that year.

        (b) The following aggregated information: (i) The number of employees who are recipients or with dependents as recipients by private and governmental employers; (ii) The number of employees who are recipients or with dependents as recipients by employer size for employers with fifty or fewer employees, fifty-one to one hundred employees, one hundred one to one thousand employees, one thousand one to five thousand employees and more than five thousand employees; and (iii) the number of employees who are recipients or with dependents as recipients by industry type.

        For each aggregated classification, the report will include the number of hours worked, the number of department of social and health services covered lives, and the total cost to the state for these recipients. This information shall be for each quarter of the preceding year.


        NEW SECTION. Sec. 3. If specific funding for the purpose of this act, referencing this act by bill or chapter number, is not provided by June 30, 2006, in the omnibus appropriations act, this act is null and void."


        On page 1, line 1 of the title, after "services;" strike all material through "section." on line 3 and insert "adding a new section to chapter 70.47 RCW; adding a new section to chapter 74.09 RCW; and creating a new section."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House refused to concur in the Senate amendment to ENGROSSED SUBSTITUTE HOUSE BILL NO. 3079 and asked the Senate to recede therefrom.


       There being no objection, the Rules Committee was relieved of SUBSTITUTE SENATE BILL NO. 6787, and the bill was placed on the Second Reading calendar.


{{43146}}                 MESSAGES FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The President has signed:


ENGROSSED HOUSE BILL NO. 1069,

SECOND SUBSTITUTE HOUSE BILL NO. 1384,

FOURTH SUBSTITUTE HOUSE BILL NO. 1483,

HOUSE BILL NO. 1966,

SUBSTITUTE HOUSE BILL NO. 2033,

SUBSTITUTE HOUSE BILL NO. 2233,

SECOND SUBSTITUTE HOUSE BILL NO. 2342,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2352,

HOUSE BILL NO. 2386,

SUBSTITUTE HOUSE BILL NO. 2402,

SUBSTITUTE HOUSE BILL NO. 2407,

SUBSTITUTE HOUSE BILL NO. 2426,

SUBSTITUTE HOUSE BILL NO. 2446,

HOUSE BILL NO. 2477,

SECOND SUBSTITUTE HOUSE BILL NO. 2498,

SUBSTITUTE HOUSE BILL NO. 2500,

HOUSE BILL NO. 2501,

SUBSTITUTE HOUSE BILL NO. 2537,

HOUSE BILL NO. 2544,

HOUSE BILL NO. 2567,

ENGROSSED HOUSE BILL NO. 2579,

HOUSE BILL NO. 2606,

SUBSTITUTE HOUSE BILL NO. 2654,

HOUSE BILL NO. 2681,

HOUSE BILL NO. 2704,

SECOND SUBSTITUTE HOUSE BILL NO. 2789,

SUBSTITUTE HOUSE BILL NO. 2817,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2848,

SUBSTITUTE HOUSE BILL NO. 2867,

SUBSTITUTE HOUSE BILL NO. 2917,

SUBSTITUTE HOUSE BILL NO. 2958,

SECOND SUBSTITUTE HOUSE BILL NO. 2964,

SUBSTITUTE HOUSE BILL NO. 2973,

HOUSE BILL NO. 2991,

HOUSE BILL NO. 3041,

HOUSE BILL NO. 3048,

SUBSTITUTE HOUSE BILL NO. 3113,

HOUSE BILL NO. 3122,

HOUSE BILL NO. 3205,

and the same are herewith transmitted.

Thomas Hoemann, Secretary


March 7, 2006

Mr. Speaker:


       The President has signed:

SUBSTITUTE SENATE BILL NO. 5236,

SECOND ENGROSSED SENATE BILL NO. 5714,

SENATE BILL NO. 6059,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6106,

SUBSTITUTE SENATE BILL NO. 6141,

SECOND SUBSTITUTE SENATE BILL NO. 6172,

SUBSTITUTE SENATE BILL NO. 6188,

SUBSTITUTE SENATE BILL NO. 6234,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6244,

SUBSTITUTE SENATE BILL NO. 6246,

SUBSTITUTE SENATE BILL NO. 6247,

SENATE BILL NO. 6248,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6255,

SENATE BILL NO. 6264,

SENATE BILL NO. 6280,

SUBSTITUTE SENATE BILL NO. 6308,

SECOND SUBSTITUTE SENATE BILL NO. 6319,

SUBSTITUTE SENATE BILL NO. 6320,

SUBSTITUTE SENATE BILL NO. 6369,

SENATE BILL NO. 6373,

SUBSTITUTE SENATE BILL NO. 6377,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6396,

SENATE BILL NO. 6412,

SENATE BILL NO. 6418,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6427,

SENATE BILL NO. 6429,

SENATE BILL NO. 6453,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 6459,

SECOND SUBSTITUTE SENATE BILL NO. 6460,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6508,

SUBSTITUTE SENATE BILL NO. 6527,

SUBSTITUTE SENATE BILL NO. 6555,

SENATE BILL NO. 6568,

SUBSTITUTE SENATE BILL NO. 6613,

SUBSTITUTE SENATE BILL NO. 6617,

SENATE BILL NO. 6637,

ENGROSSED SENATE BILL NO. 6661,

SUBSTITUTE SENATE BILL NO. 6717,

SUBSTITUTE SENATE BILL NO. 6781,

SECOND SUBSTITUTE SENATE BILL NO. 6823,

SUBSTITUTE SENATE BILL NO. 6840,

and the same is herewith transmitted.

Thomas Hoemann, Secretary


March 6, 2006


Mr. Speaker:


       The President has signed:


ENGROSSED SUBSTITUTE HOUSE BILL NO. 1020,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1080,

SUBSTITUTE HOUSE BILL NO. 1107,

THIRD SUBSTITUTE HOUSE BILL NO. 1226,

SUBSTITUTE HOUSE BILL NO. 1257,

SUBSTITUTE HOUSE BILL NO. 1510,

SUBSTITUTE HOUSE BILL NO. 1650,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1850,

SECOND SUBSTITUTE HOUSE BILL NO. 2002,

ENGROSSED HOUSE BILL NO. 2322,

HOUSE BILL NO. 2348,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2353,

HOUSE BILL NO. 2381,

SUBSTITUTE HOUSE BILL NO. 2382,

SUBSTITUTE HOUSE BILL NO. 2384,

SUBSTITUTE HOUSE BILL NO. 2415,

SUBSTITUTE HOUSE BILL NO. 2457,

SUBSTITUTE HOUSE BILL NO. 2471,

SUBSTITUTE HOUSE BILL NO. 2543,

SUBSTITUTE HOUSE BILL NO. 2573,

SUBSTITUTE HOUSE BILL NO. 2596,

HOUSE BILL NO. 2617,

ENGROSSED THIRD SUBSTITUTE HOUSE BILL NO. 2939,

HOUSE BILL NO. 2972,

SUBSTITUTE HOUSE BILL NO. 2974,

HOUSE BILL NO. 2975,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2984,

SUBSTITUTE HOUSE BILL NO. 2985,

HOUSE BILL NO. 3139,

HOUSE BILL NO. 3156,

SUBSTITUTE HOUSE BILL NO. 3178,

SUBSTITUTE HOUSE BILL NO. 3182,

HOUSE BILL NO. 3277,

and the same are herewith transmitted.

Thomas Hoemann, Secretary


March 7, 2006

Mr. Speaker:


       The Senate has passed ENGROSSED SUBSTITUTE SENATE BILL NO. 6896, and the same is herewith transmitted.

Thomas Hoemann, Secretary


March 7, 2006

Mr. Speaker:


       The Senate concurred in the House amendment to SENATE BILL NO. 6415 and passed the bill as amended.

Thomas Hoemann, Secretary


March 7, 2006

Mr. Speaker:


       The Senate receded from its amendment to ENGROSSED SUBSTITUTE HOUSE BILL NO. 2685, and passed the bill without said amendment, and the same is herewith transmitted.

Thomas Hoemann, Secretary


March 7 , 2006

Mr. Speaker:


       The Senate receded from its amendment to SUBSTITUTE HOUSE BILL NO. 2481, and passed the bill without said amendment, and the same is herewith transmitted.

Thomas Hoemann, Secretary


SIGNED BY THE SPEAKER


       The Speaker signed the following bills:


HOUSE BILL NO. 1439,

SUBSTITUTE HOUSE BILL NO. 2345,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2418,

HOUSE BILL NO. 2465,

SUBSTITUTE HOUSE BILL NO. 2481,

SUBSTITUTE HOUSE BILL NO. 2553,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2575,

SUBSTITUTE HOUSE BILL NO. 2678,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2680,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2685,

SUBSTITUTE HOUSE BILL NO. 2812,

SUBSTITUTE HOUSE BILL NO. 2836,

HOUSE BILL NO. 2879,

SUBSTITUTE HOUSE BILL NO. 2933,

SUBSTITUTE HOUSE BILL NO. 3033,

SUBSTITUTE HOUSE BILL NO. 3164,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 3222,

SUBSTITUTE HOUSE BILL NO. 3282,

HOUSE JOINT RESOLUTION NO. 4223,


POINT OF PERSONAL PRIVILEGE


       Representative Williams: "Thank you, Mr. Speaker. Earlier today we recognized the hard work of our staff in the Office of Program Resources. Certainly, each of us is grateful for the work that they do with respect to all of our policy committees. But laboring behind the scenes are the members and hard working staff of the Code Revisor's Office. This year we have been graced with a new Code Revisor – Kyle Thiessen – for the first time in decades – who has done a very able job of leading that office of hard working attorneys. I stand today, as a member myself of the Statute Law Committee, to recognize the work of the attorneys that comprise our Code Revisor's Office."

 

POINT OF PERSONAL PRIVILEGE


       Representative Priest: "Thank you, Mr. Speaker. We too would like to thank personally the members of the Code Revisor's Office for the wonderful work they do. A couple of personal comments – I'd like to thank them because they gave me a new office. Thank you very much for that. We thanked the staff of the OPR office this morning. And now we would like to thank you for your dedication. We know the hours you spend. We know the stress and trials we put you under. We know the importance of your work. So, on behalf of all of us thank you again for your devotion and wonderful service. It is much appreciated."


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


SECOND READING


{{43149}}       HOUSE BILL NO. 1672, By Representatives Conway, Hudgins, Green, Cody, Appleton, Morrell, Wood, McCoy, Kenney, Moeller and Chase


       Requiring hospitals to establish a safe patient handling committee.


       The bill was read the second time.


       There being no objection, Substitute House Bill No. 1672 was substituted for House Bill No. 1672 and the substitute bill was placed on the second reading calendar.


       SUBSTITUTE HOUSE BILL NO. 1672 was read the second time.


       With the consent of the House, amendment (909) was withdrawn.


{{43150}}       Representative Cody moved the adoption of amendment (1163):


        Strike everything after the enacting clause and insert the following:


        "NEW SECTION. Sec. 1. A new section is added to chapter 49.17 RCW to read as follows:

        The legislature finds that:

        (1) Patients are not at optimum levels of safety while being lifted, transferred, or repositioned manually. Mechanical lift programs can reduce skin tears suffered by patients by threefold. Nurses, thirty-eight percent of whom have previous back injuries, can drop patients if their pain thresholds are triggered.

        (2) According to the bureau of labor statistics, hospitals in Washington have a nonfatal employee injury incidence rate that exceeds the rate of construction, agriculture, manufacturing, and transportation.

        (3) The physical demands of the nursing profession lead many nurses to leave the profession. Research shows that the annual prevalence rate for nursing back injury is over forty percent and many nurses who suffer a back injury do not return to nursing. Considering the present nursing shortage in Washington, measures must be taken to protect nurses from disabling injury.

        (4) Washington hospitals have made progress toward implementation of safe patient handling programs that are effective in decreasing employee injuries. It is not the intent of this act to place an undue financial burden on hospitals.


        NEW SECTION. Sec. 2. A new section is added to chapter 70.41 RCW to read as follows:

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

        (a) "Lift team" means hospital employees specially trained to conduct patient lifts, transfers, and repositioning using lifting equipment when appropriate.

        (b) "Safe patient handling" means the use of engineering controls, lifting and transfer aids, or assistive devices, by lift teams or other staff, instead of manual lifting to perform the acts of lifting, transferring, and repositioning health care patients and residents.

        (c) "Musculoskeletal disorders" means conditions that involve the nerves, tendons, muscles, and supporting structures of the body.

        (2) By February 1, 2007, each hospital must establish a safe patient handling committee either by creating a new committee or assigning the functions of a safe patient handling committee to an existing committee. The purpose of the committee is to design and recommend the process for implementing a safe patient handling program. At least half of the members of the safe patient handling committee shall be frontline nonmanagerial employees who provide direct care to patients unless doing so will adversely affect patient care.

        (3) By December 1, 2007, each hospital must establish a safe patient handling program. As part of this program, a hospital must:

        (a) Implement a safe patient handling policy for all shifts and units of the hospital. Implementation of the safe patient handling policy may be phased-in with the acquisition of equipment under subsection (4) of this section;

        (b) Conduct a patient handling hazard assessment. This assessment should consider such variables as patient-handling tasks, types of nursing units, patient populations, and the physical environment of patient care areas;

        (c) Develop a process to identify the appropriate use of the safe patient handling policy based on the patient's physical and medical condition and the availability of lifting equipment or lift teams. The policy shall include a means to address circumstances under which it would be medically contraindicated to use lifting or transfer aids or assistive devices for particular patients;

        (d) Conduct an annual performance evaluation of the program to determine its effectiveness, with the results of the evaluation reported to the safe patient handling committee. The evaluation shall determine the extent to which implementation of the program has resulted in a reduction in musculoskeletal disorder claims and days of lost work attributable to musculoskeletal disorder caused by patient handling, and include recommendations to increase the program's effectiveness; and

        (e) When developing architectural plans for constructing or remodeling a hospital or a unit of a hospital in which patient handling and movement occurs, consider the feasibility of incorporating patient handling equipment or the physical space and construction design needed to incorporate that equipment at a later date.

        (4) By January 30, 2010, each hospital must complete, at a minimum, acquisition of their choice of: (a) One readily available lift per acute care unit on the same floor unless the safe patient handling committee determines a lift is unnecessary in the unit; (b) one lift for every ten acute care available inpatient beds; or (c) equipment for use by lift teams. Hospitals must train staff on policies, equipment, and devices at least annually.

        (5) Nothing in this section precludes lift team members from performing other duties as assigned during their shift.

        (6) A hospital shall develop procedures for hospital employees to refuse to perform or be involved in patient handling or movement that the hospital employee believes in good faith will expose a patient or a hospital employee to an unacceptable risk of injury. A hospital employee who in good faith follows the procedure developed by the hospital in accordance with this subsection shall not be the subject of disciplinary action by the hospital for the refusal to perform or be involved in the patient handling or movement.


        NEW SECTION. Sec. 3. A new section is added to chapter 72.23 RCW to read as follows:

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

        (a) "Lift team" means hospital employees specially trained to conduct patient lifts, transfers, and repositioning using lifting equipment when appropriate.

        (b) "Safe patient handling" means the use of engineering controls, lifting and transfer aids, or assistive devices, by lift teams or other staff, instead of manual lifting to perform the acts of lifting, transferring, and repositioning health care patients and residents.

        (c) "Musculoskeletal disorders" means conditions that involve the nerves, tendons, muscles, and supporting structures of the body.

        (2) By February 1, 2007, each hospital must establish a safe patient handling committee either by creating a new committee or assigning the functions of a safe patient handling committee to an existing committee. The purpose of the committee is to design and recommend the process for implementing a safe patient handling program. At least half of the members of the safe patient handling committee shall be frontline nonmanagerial employees who provide direct care to patients unless doing so will adversely affect patient care.

        (3) By December 1, 2007, each hospital must establish a safe patient handling program. As part of this program, a hospital must:

        (a) Implement a safe patient handling policy for all shifts and units of the hospital. Implementation of the safe patient handling policy may be phased-in with the acquisition of equipment under subsection (4) of this section;

        (b) Conduct a patient handling hazard assessment. This assessment should consider such variables as patient-handling tasks, types of nursing units, patient populations, and the physical environment of patient care areas;

        (c) Develop a process to identify the appropriate use of the safe patient handling policy based on the patient's physical and medical condition and the availability of lifting equipment or lift teams;

        (d) Conduct an annual performance evaluation of the program to determine its effectiveness, with the results of the evaluation reported to the safe patient handling committee. The evaluation shall determine the extent to which implementation of the program has resulted in a reduction in musculoskeletal disorder claims and days of lost work attributable to musculoskeletal disorder caused by patient handling, and include recommendations to increase the program's effectiveness; and

        (e) When developing architectural plans for constructing or remodeling a hospital or a unit of a hospital in which patient handling and movement occurs, consider the feasibility of incorporating patient handling equipment or the physical space and construction design needed to incorporate that equipment at a later date.

        (4) By January 30, 2010, hospitals must complete acquisition of their choice of: (a) One readily available lift per acute care unit on the same floor, unless the safe patient handling committee determines a lift is unnecessary in the unit; (b) one lift for every ten acute care available inpatient beds; or (c) equipment for use by lift teams. Hospitals must train staff on policies, equipment, and devices at least annually.

        (5) Nothing in this section precludes lift team members from performing other duties as assigned during their shift.

        (6) A hospital shall develop procedures for hospital employees to refuse to perform or be involved in patient handling or movement that the hospital employee believes in good faith will expose a patient or a hospital employee to an unacceptable risk of injury. A hospital employee who in good faith follows the procedure developed by the hospital in accordance with this subsection shall not be the subject of disciplinary action by the hospital for the refusal to perform or be involved in the patient handling or movement.


        NEW SECTION. Sec. 4. A new section is added to chapter 51.16 RCW to read as follows:

        (1) By January 1, 2007, the department shall develop rules to provide a reduced workers' compensation premium for hospitals that implement a safe patient handling program. The rules shall include any requirements for obtaining the reduced premium that must be met by hospitals.

        (2) The department shall complete an evaluation of the results of the reduced premium, including changes in claim frequency and costs, and shall report to the appropriate committees of the legislature by December 1, 2010, and 2012.


        NEW SECTION. Sec. 5. A new section is added to chapter 82.04 RCW to read as follows:

        (1) In computing the tax imposed under this chapter, a hospital may take a credit for the cost of purchasing mechanical lifting devices and other equipment that are primarily used to minimize patient handling by health care providers, consistent with a safe patient handling program developed and implemented by the hospital in compliance with section 2 of this act. The credit is equal to one hundred percent of the cost of the mechanical lifting devices or other equipment.

        (2) No application is necessary for the credit, however, a hospital taking a credit under this section must maintain records, as required by the department, necessary to verify eligibility for the credit under this section. The hospital is subject to all of the requirements of chapter 82.32 RCW. A credit earned during one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year. No refunds shall be granted for credits under this section.

        (3) The maximum credit that may be earned under this section for each hospital is limited to one thousand dollars for each acute care available inpatient bed.

        (4) Credits are available on a first in-time basis. The department shall disallow any credits, or portion thereof, that would cause the total amount of credits claimed statewide under this section to exceed ten million dollars. If the ten million dollar limitation is reached, the department shall notify hospitals that the annual statewide limit has been met. In addition, the department shall provide written notice to any hospital that has claimed tax credits after the ten million dollar limitation in this subsection has been met. The notice shall indicate the amount of tax due and shall provide that the tax be paid within thirty days from the date of such notice. The department shall not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.

        (5) Credit may not be claimed under this section for the acquisition of mechanical lifting devices and other equipment if the acquisition occurred before the effective date of this section.

        (6) Credit may not be claimed under this section for any acquisition of mechanical lifting devices and other equipment that occurs after December 30, 2010.


        (7) The department shall issue an annual report on the amount of credits claimed by hospitals under this section, with the first report due on July 1, 2008.

        (8) For the purposes of this section, "hospital" has the meaning provided in RCW 70.41.020."


        Correct the title.


       Representative Cody moved the adoption of amendment (1167) to amendment (1163):


        On page 1, line 3, after "Sec. 1." strike all material through "follows:" on line 4


        Correct the title.


       Representative Cody spoke in favor of the adoption of the amendment to the amendment.


       The amendment to the amendment was adopted. The amendment as amended was adopted. The bill was ordered engrossed.


{{43152}}       There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


       Representatives Green, Hinkle and Conway spoke in favor of passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Engrossed Substitute House Bill No. 1672.


ROLL CALL


       The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 1672 and the bill passed the House by the following vote: Yeas - 85, Nays - 13, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Appleton, Armstrong, Blake, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, O'Brien, Ormsby, Pettigrew, Priest, Quall, Roach, Roberts, Santos, Schindler, Schual-Berke, Sells, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Takko, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 85.

       Voting nay: Representatives Anderson, Bailey, Buck, Dunn, Kretz, Kristiansen, Nixon, Orcutt, Pearson, Rodne, Serben, Sump and Talcott - 13.


       ENGROSSED SUBSTITUTE HOUSE BILL NO. 1672, having received the necessary constitutional majority, was declared passed.


{{43153}}       HOUSE BILL NO. 2462, By Representatives Moeller, Wallace and Roberts


       Establishing work groups to periodically review and update the child support schedule.


       The bill was read the second time.


       There being no objection, Second Substitute House Bill No. 2462 was substituted for House Bill No. 2462 and the second substitute bill was placed on the second reading calendar.


       SECOND SUBSTITUTE HOUSE BILL NO. 2462 was read the second time.


{{43154}}       There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


       Representatives Moeller and Walsh spoke in favor of passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Second Substitute House Bill No. 2462.


ROLL CALL


       The Clerk called the roll on the final passage of Second Substitute House Bill No. 2462 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.


       SECOND SUBSTITUTE HOUSE BILL NO. 2462, having received the necessary constitutional majority, was declared passed.



{{43155}}       SENATE BILL NO. 6219, By Senators Keiser, Weinstein, Eide, Pridemore, Prentice, Berkey, Fraser and Kohl-Welles


       Providing for financial literacy education.


       The bill was read the second time.


       There being no objection, the committee amendment by the Committee on Education was adopted. (For Committee amendment, see Journal, 47th Day, February 24, 2006.)


{{43156}}       There being no objection, the rules were suspended, the second reading considered the third and the bill, as amended by the House, was placed on final passage.


       Representatives Quall and Anderson spoke in favor of passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Senate Bill No. 6219, as amended by the House.


ROLL CALL


       The Clerk called the roll on the final passage of Senate Bill No. 6219, as amended by the House, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.


       SENATE BILL NO. 6219, as amended by the House, having received the necessary constitutional majority, was declared passed.


{{43158}}       SUBSTITUTE SENATE BILL NO. 6671, By Senate Committee on Ways & Means (originally sponsored by Senators Doumit, Delvin, Rasmussen and Parlette)


       Clarifying the application of taxes to the financial activities of professional employer organizations.


       The bill was read the second time.


{{43159}}       There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


       Representatives McIntire and Orcutt spoke in favor of passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Substitute Senate Bill No. 6671.


ROLL CALL


       The Clerk called the roll on the final passage of Substitute Senate Bill No. 6671 and the bill passed the House by the following vote: Yeas - 97, Nays - 1, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 97.

       Voting nay: Representative Hasegawa - 1.


       SUBSTITUTE SENATE BILL NO. 6671, having received the necessary constitutional majority, was declared passed.


{{43160}}       SUBSTITUTE SENATE BILL NO. 6676, By Senate Committee on Judiciary (originally sponsored by Senators Roach, Kline, Mulliken, Fairley and Rasmussen)


       Prohibiting fraudulent filings of vehicle reports of sale.


       The bill was read the second time.


{{43161}}       There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


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



       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Substitute Senate Bill No. 6676.


ROLL CALL


       The Clerk called the roll on the final passage of Substitute Senate Bill No. 6676 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.


       SUBSTITUTE SENATE BILL NO. 6676, having received the necessary constitutional majority, was declared passed.


{{43162}}                   MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


       The Senate receded from its amendment to SUBSTITUTE HOUSE BILL NO. 1841, and under suspension of the rules returned the bill to second reading for purpose of amendment. The Senate further adopted the following amendment and passed the measure as amended.


        Strike everything after the enacting clause and insert the following:


        "Sec. 1. RCW 19.28.041 and 2002 c 249 s 2 are each amended to read as follows:

        (1) It is unlawful for any person, firm, partnership, corporation, or other entity to advertise, offer to do work, submit a bid, engage in, conduct, or carry on the business of installing or maintaining wires or equipment to convey electric current, or installing or maintaining equipment to be operated by electric current as it pertains to the electrical industry, without having an unrevoked, unsuspended, and unexpired electrical contractor license, issued by the department in accordance with this chapter. All electrical contractor licenses expire twenty-four calendar months following the day of their issue. The department may issue an electrical contractors license for a period of less than twenty-four months only for the purpose of equalizing the number of electrical contractor licenses that expire each month. Application for an electrical contractor license shall be made in writing to the department, accompanied by the required fee. The application shall state:

        (a) The name and address of the applicant; in case of firms or partnerships, the names of the individuals composing the firm or partnership; in case of corporations, the names of the managing officials thereof;

        (b) The location of the place of business of the applicant and the name under which the business is conducted;

        (c) Employer social security number;

        (d) Evidence of workers' compensation coverage for the applicant's employees working in Washington, as follows:

        (i) The applicant's industrial insurance account number issued by the department;

        (ii) The applicant's self-insurer number issued by the department; or

        (iii) For applicants domiciled in a state or province of Canada subject to an agreement entered into under RCW 51.12.120(7), as permitted by the agreement, filing a certificate of coverage issued by the agency that administers the workers' compensation law in the applicant's state or province of domicile certifying that the applicant has secured the payment of compensation under the other state's or province's workers' compensation law;

        (e) Employment security department number;

        (f) State excise tax registration number;

        (g) Unified business identifier (UBI) account number may was substituted for the information required by (d) of this subsection if the applicant will not employ employees in Washington, and by (e) and (f) of this subsection; and

        (h) Whether a general or specialty electrical contractor license is sought and, if the latter, the type of specialty. Electrical contractor specialties include, but are not limited to: Residential, pump and irrigation, limited energy system, signs, nonresidential maintenance, restricted nonresidential maintenance, appliance repair, and a combination specialty. A general electrical contractor license shall grant to the holder the right to engage in, conduct, or carry on the business of installing or maintaining wires or equipment to carry electric current, and installing or maintaining equipment, or installing or maintaining material to fasten or insulate such wires or equipment to be operated by electric current, in the state of Washington. A specialty electrical contractor license shall grant to the holder a limited right to engage in, conduct, or carry on the business of installing or maintaining wires or equipment to carry electrical current, and installing or maintaining equipment; or installing or maintaining material to fasten or insulate such wires or equipment to be operated by electric current in the state of Washington as expressly allowed by the license.

        (2) The department may verify the workers' compensation coverage information provided by the applicant under subsection (1)(d) of this section, including but not limited to information regarding the coverage of an individual employee of the applicant. If coverage is provided under the laws of another state, the department may notify the other state that the applicant is employing employees in Washington.

        (3) The application for an electrical contractor license shall be accompanied by a bond in the sum of four thousand dollars with the state of Washington named as obligee in the bond, with good and sufficient surety, to be approved by the department. The bond shall at all times be kept in full force and effect, and any cancellation or revocation thereof, or withdrawal of the surety therefrom, suspends the license issued to the principal until a new bond has been filed and approved as provided in this section. Upon approval of a bond, the department shall on the next business day deposit the fee accompanying the application in the electrical license fund and shall file the bond in the office. The department shall upon request furnish to any person, firm, partnership, corporation, or other entity a certified copy of the bond upon the payment of a fee that the department shall set by rule. The fee shall cover but not exceed the cost of furnishing the certified copy. The bond shall be conditioned that in any installation or maintenance of wires or equipment to convey electrical current, and equipment to be operated by electrical current, the principal will comply with the provisions of this chapter and with any electrical ordinance, building code, or regulation of a city or town adopted pursuant to RCW 19.28.010(3) that is in effect at the time of entering into a contract. The bond shall be conditioned further that the principal will pay for all labor, including employee benefits, and material furnished or used upon the work, taxes and contributions to the state of Washington, and all damages that may be sustained by any person, firm, partnership, corporation, or other entity due to a failure of the principal to make the installation or maintenance in accordance with this chapter or any applicable ordinance, building code, or regulation of a city or town adopted pursuant to RCW 19.28.010(3). In lieu of the surety bond required by this section the license applicant may file with the department a cash deposit or other negotiable security acceptable to the department. If the license applicant has filed a cash deposit, the department shall deposit the funds in a special trust savings account in a commercial bank, mutual savings bank, or savings and loan association and shall pay annually to the depositor the interest derived from the account.

        (4) The department shall issue general or specialty electrical contractor licenses to applicants meeting all of the requirements of this chapter. The provisions of this chapter relating to the licensing of any person, firm, partnership, corporation, or other entity including the requirement of a bond with the state of Washington named as obligee therein and the collection of a fee therefor, are exclusive, and no political subdivision of the state of Washington may require or issue any licenses or bonds or charge any fee for the same or a similar purpose. No person, firm, partnership, corporation, or other entity holding more than one specialty contractor license under this chapter may be required to pay an annual fee for more than one such license or to post more than one four thousand dollar bond, equivalent cash deposit, or other negotiable security.

        (5) To obtain a general or specialty electrical contractor license the applicant must designate an individual who currently possesses a valid master journeyman electrician's certificate of competency, master specialty electrician's certificate of competency in the specialty for which application has been made, or administrator's certificate as a general electrical contractor administrator or as a specialty electrical contractor administrator in the specialty for which application has been made.

        (6) Administrator certificate specialties include but are not limited to: Residential, pump and irrigation, limited energy system, signs, nonresidential maintenance, restricted nonresidential maintenance, appliance repair, and combination specialty. To obtain an administrator's certificate an individual must pass an examination as set forth in RCW 19.28.051 unless the applicant was a licensed electrical contractor at any time during 1974. Applicants who were electrical contractors licensed by the state of Washington at any time during 1974 are entitled to receive a general electrical contractor administrator's certificate without examination if the applicants apply prior to January 1, 1984. The board of electrical examiners shall certify to the department the names of all persons who are entitled to either a general or specialty electrical contractor administrator's certificate.


        Sec. 2. RCW 19.28.161 and 2002 c 249 s 4 are each amended to read as follows:

        (1) No person may engage in the electrical construction trade without having a valid master journeyman electrician certificate of competency, journeyman electrician certificate of competency, master specialty electrician certificate of competency, or specialty electrician certificate of competency issued by the department in accordance with this chapter. Electrician certificate of competency specialties include, but are not limited to: Residential, pump and irrigation, limited energy system, signs, nonresidential maintenance, restricted nonresidential maintenance, and appliance repair.

        (2) A person who is indentured in an apprenticeship program approved under chapter 49.04 RCW for the electrical construction trade or who is learning the electrical construction trade may work in the electrical construction trade if supervised by a certified master journeyman electrician, journeyman electrician, master specialty electrician in that electrician's specialty, or specialty electrician in that electrician's specialty. All apprentices and individuals learning the electrical construction trade shall obtain an electrical training certificate from the department. The certificate shall authorize the holder to learn the electrical construction trade while under the direct supervision of a master journeyman electrician, journeyman electrician, master specialty electrician working in that electrician's specialty, or specialty electrician working in that electrician's specialty. The holder of the electrical training certificate shall renew the certificate biennially. At the time of renewal, the holder shall provide the department with an accurate list of the holder's employers in the electrical construction industry for the previous biennial period and the number of hours worked for each employer, and proof of sixteen hours of approved classroom electrical continuing education courses covering this chapter, the national electrical code, or electrical theory, or the equivalent electrical training courses taken as part of an approved apprenticeship program under chapter 49.04 RCW or an approved electrical training program under RCW 19.28.191(1)(h). This education requirement is effective July 1, 2007. A biennial fee shall be charged for the issuance or renewal of the certificate. The department shall set the fee by rule. The fee shall cover but not exceed the cost of administering and enforcing the trainee certification and supervision requirements of this chapter. Apprentices and individuals learning the electrical construction trade shall have their electrical training certificates in their possession at all times that they are performing electrical work. They shall show their certificates to an authorized representative of the department at the representative's request.

        (3) Any person who has been issued an electrical training certificate under this chapter may work if that person is under supervision. Supervision shall consist of a person being on the same job site and under the control of either a certified master journeyman electrician, journeyman electrician, master specialty electrician working in that electrician's specialty, or specialty electrician working in that electrician's specialty. Either a certified master journeyman electrician, journeyman electrician, master specialty electrician working in that electrician's specialty, or specialty electrician working in that electrician's specialty shall be on the same job site as the noncertified individual for a minimum of seventy-five percent of each working day unless otherwise provided in this chapter.

        (4) The ratio of noncertified individuals to certified master journeymen electricians, journeymen electricians, master specialty electricians, or specialty electricians on any one job site is as follows:


        (a) When working as a specialty electrician, not more than two noncertified individuals for every certified master specialty electrician working in that electrician's specialty, specialty electrician working in that electrician's specialty, master journeyman electrician, or journeyman electrician, except that the ratio requirements are one certified master specialty electrician working in that electrician's specialty, specialty electrician working in that electrician's specialty, master journeyman electrician, or journeyman electrician working as a specialty electrician to no more than four students enrolled in and working as part of an electrical construction program at public community or technical colleges, or not-for-profit nationally accredited trade or technical schools licensed by the work force training and education coordinating board under chapter 28C.10 RCW. In meeting the ratio requirements for students enrolled in an electrical construction program at a trade school, a trade school may receive input and advice from the electrical board; and

        (b) When working as a journeyman electrician, not more than one noncertified individual for every certified master journeyman electrician or journeyman electrician, except that the ratio requirements shall be one certified master journeyman electrician or journeyman electrician to no more than four students enrolled in and working as part of an electrical construction program at public community or technical colleges, or not-for-profit nationally accredited trade or technical schools licensed by the work force training and education coordinating board under chapter 28C.10 RCW. In meeting the ratio requirements for students enrolled in an electrical construction program at a trade school, a trade school may receive input and advice from the electrical board.

        An individual who has a current training certificate and who has successfully completed or is currently enrolled in an approved apprenticeship program or in an electrical construction program at public community or technical colleges, or not-for-profit nationally accredited technical or trade schools licensed by the work force training and education coordinating board under chapter 28C.10 RCW, may work without direct on-site supervision during the last six months of meeting the practical experience requirements of this chapter.

        (5) For the residential (as specified in WAC 296-46A-930(2)(a)), pump and irrigation (as specified in WAC 296-46A-930(2)(b)(i)), sign (as specified in WAC 296-46A-930(2)(c)), limited energy (as specified in WAC 296-46A-930(2)(e)(i)), nonresidential maintenance (as specified in WAC 296-46A-930(2)(f)(i)), restricted nonresidential maintenance as determined by the department in rule, or other new nonresidential specialties, not including appliance repair, as determined by the department in rule, either a master journeyman electrician, journeyman electrician, master specialty electrician working in that electrician's specialty, or specialty electrician working in that electrician's specialty must be on the same job site as the noncertified individual for a minimum of seventy-five percent of each working day. Other specialties must meet the requirements specified in RCW 19.28.191(1)(((f)(ii))) (g)(ii). When the ratio of certified electricians to noncertified individuals on a job site is one certified electrician to three or four noncertified individuals, the certified electrician must:

        (a) Directly supervise and instruct the noncertified individuals and the certified electrician may not directly make or engage in an electrical installation; and

        (b) Be on the same job site as the noncertified individual for a minimum of one hundred percent of each working day.

        (6) The electrical contractor shall accurately verify and attest to the electrical trainee hours worked by electrical trainees on behalf of the electrical contractor."


        On page 1, line 1 of the title, after "trainees" strike the remainder of the title and insert "and contractor licenses; and amending RCW 19.28.041 and 19.28.161."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House concurred in the Senate amendment to SUBSTITUTE HOUSE BILL NO. 1841 and advanced the bill as amended by the Senate to final passage.


{{43163}}                FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


       Representatives Wood and Condotta spoke in favor of the passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Substitute House Bill No. 1841, as amended by the Senate.


{{43164}}                                    ROLL CALL


       The Clerk called the roll on the final passage of Substitute House Bill No. 1841, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.

  

       SUBSTITUTE HOUSE BILL NO. 1841, as amended by the Senate, having received the constitutional majority, was declared passed.


{{43165}}                   MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:



       The Senate has passed SUBSTITUTE HOUSE BILL NO. 2155, with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "NEW SECTION. Sec. 1. The state of Washington recognizes that an informed citizenry is indispensable to the proper functioning of a democratic society. It is the basic right of citizens to know about the activities of their government, to benefit from the information developed at public expense, and to have permanent access to the information published by state agencies.

        The secretary of state through the state library must ensure permanent public access to public state government publications, regardless of the format, and prescribe the conditions for use of state publications in depository libraries.


        Sec. 2. RCW 27.04.045 and 2002 c 342 s 3 are each amended to read as follows:

        The state librarian shall be responsible and accountable for the following functions:

        (1) Establishing content-related standards for common formats and agency indexes for state agency-produced information. In developing these standards, the state librarian is encouraged to seek involvement of, and comments from, public and private entities with an interest in such standards;

        (2) Managing and administering the state library;

        (3) Exerting leadership in information access and the development of library services;

        (4) Acquiring library materials, equipment, and supplies by purchase, exchange, gift, or otherwise; and, as appropriate, assisting the legislature, other state agencies, and other libraries in the cost-effective purchase of information resources;

        (5) Employing and terminating personnel in accordance with chapter 41.06 RCW as may be necessary to implement the purposes of this chapter;

        (6) Entering into agreements with other public or private entities as a means of implementing the mission, goals, and objectives of the state library and the entity with which it enters such agreements. In agreements for services between the library and other state agencies, the library may negotiate an exchange of services in lieu of monetary reimbursement for the library's indirect or overhead costs, when such an arrangement facilitates the delivery of library services;

        (7) Maintaining a library at the state capitol grounds to effectively provide library and information services to members of the legislature, state officials, and state employees in connection with their official duties;

        (8) Serving as the depository for newspapers published in the state of Washington thus providing a central location for a valuable historical record for scholarly, personal, and commercial reference and circulation;

        (9) Promoting and facilitating electronic access to public information and services, including providing, or providing for, a service that identifies, describes, and provides location information for government information through electronic means, and that assists government agencies in making their information more readily available to the public;

        (10) Collecting and distributing copies of state publications, as defined in RCW 40.06.010, prepared by any state agency for distribution. The state library shall maintain the state publications distribution center, as provided in chapter 40.06 RCW((. The office of the secretary of state, on recommendation of the state librarian, may provide by rule for deposit with the state library of up to three copies of each publication)) to provide copies of materials that are not available in electronic format to state depository libraries;

        (11) Providing for the sale of library material in accordance with RCW 27.12.305;

        (12) Providing advisory services to state agencies regarding their information needs;

        (13) Providing for library and information service to residents and staff of state-supported residential institutions;

        (14) Providing for library and information services to persons throughout the state who are blind and/or physically handicapped;

        (15) Assisting individuals and groups such as libraries, library boards, governing bodies, and citizens throughout the state toward the establishment and development of library services;

        (16) Making studies and surveys of library needs in order to provide, expand, enlarge, and otherwise improve access to library facilities and services throughout the state;

        (17) Serving as an interlibrary loan, information, reference, and referral resource for all libraries in the state. The state library may charge lending fees to other libraries that charge the state library for similar services. Money paid as fees shall be retained by the state library as a recovery of costs; and

        (18) Accepting and expending in accordance with the terms thereof grants of federal, state, local, or private funds. For the purpose of qualifying to receive such grants, the state librarian is authorized to make applications and reports required by the grantor.


        Sec. 3. RCW 40.06.010 and 1977 ex.s. c 232 s 8 are each amended to read as follows:

        As used in this chapter:

        (1) (("Print" includes all forms of reproducing multiple copies, with the exception of typewritten correspondence and interoffice memoranda.

        (2))) "Electronic repository" means a collection of publicly accessible electronic publications stored in a secure digital environment with redundant backup to preserve the collection.

        (2) "Format" includes any media used in the publication of state information including electronic, print, audio, visual, and microfilm.

        (3) "State agency" includes every state office, officer, department, division, bureau, board, commission and agency of the state, and, where applicable, all subdivisions of each.

        (((3))) (4) "State publication" means information published by state agencies, regardless of format, intended for distribution to state government or the public. Examples may include((s)) annual, biennial, and special reports required by law, state agency newsletters, periodicals, and magazines, ((books, pamphlets, leaflets, and all other materials, other than news releases sent exclusively to the news media, typewritten correspondence and interoffice memoranda, issued in print by the state, the legislature, constitutional officers, or any state department, committee, or other state agency supported wholly or in part by state funds)) and other informational material intended for general dissemination to state agencies, the public, or the legislature.


        Sec. 4. RCW 40.06.020 and 2002 c 342 s 5 are each amended to read as follows:

        There is hereby created as a division of the state library, and under the direction of the state librarian, a state publications distribution center. The center shall utilize the depository library system to permit citizens economical and convenient access to state publications, regardless of format. To this end the secretary of state shall make such rules as may be deemed necessary to carry out the provisions of this chapter.


        Sec. 5. RCW 40.06.030 and 1977 ex.s. c 232 s 10 are each amended to read as follows:

        (1) Every state agency shall promptly ((deposit copies of each of its state publications with the state library in quantities as certified by the state librarian as required to meet the needs of the depository library system. Upon consent of the issuing state agency such state publications as are printed by the public printer shall be delivered directly to the center.

        (2))) submit to the state library copies of published information that are state publications.

        (a) For state publications available only in print format, each state agency shall deposit, at a minimum, two copies of each of its publications with the state library. For the purposes of broad public access, state agencies may deposit additional copies with the state library for distribution to additional depository libraries.

        (b) For state publications available only in electronic format, each state agency shall deposit one copy of each of its publications with the state library.

        (c) For state publications available in both print and electronic format, each state agency shall deposit two print copies and one electronic copy of the publication with the state library.

        (2) Annually, each state agency shall provide the state library with a listing of all its publications made available to state government and the public during the preceding year, including those published in electronic form. The secretary of state shall, by rule, establish the annual date by which state agencies must provide the list of its publications to the state library.

        (3) In the interest of economy and efficiency, the state librarian may specifically or by general rule exempt a given state publication or class of publications from the requirements of this section in full or in part.

(4) Upon consent of the issuing state agency, such state publications as are printed by the public printer shall be delivered directly to the center.


        Sec. 6. RCW 40.06.040 and 2002 c 342 s 6 are each amended to read as follows:

(1) To provide economical public access to state publications, the center may enter into depository contracts with any free public library, The Evergreen State College, regional university, or state university library, or, if needed, the library of any privately incorporated college or university in this state. The requirements for eligibility to contract as a depository library shall be established by the secretary of state upon recommendations of the state librarian. The standards shall include and take into consideration the type of library, available housing and space for the publications, the number and qualifications of personnel, and availability for public use. The center may also contract with public, out-of-state libraries for the exchange of state and other publications on a reciprocal basis. Any state publication to be distributed to the public and the legislature shall be mailed at the lowest available postal rate.

(2) The office of the secretary of state through the state librarian shall preserve and make accessible state agency electronic publications deposited with the state library through an electronic repository.


        Sec. 7. RCW 40.06.050 and 1963 c 233 s 5 are each amended to read as follows:

        The center shall publish and distribute regularly a list of available state publications, and may publish and distribute such other descriptive ((printed)) matter as will facilitate the distribution of and access to state publications."


        On page 1, line 2 of the title, after "state;" strike the remainder of the title and insert "amending RCW 27.04.045, 40.06.010, 40.06.020, 40.06.030, 40.06.040, and 40.06.050; and creating a new section."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House concurred in the Senate amendment to SUBSTITUTE HOUSE BILL NO. 2155 and advanced the bill as amended by the Senate to final passage.


{{43166}}                FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


       Representatives Haigh and Nixon spoke in favor the passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Substitute House Bill No. 2155, as amended by the Senate.


{{43167}}                                    ROLL CALL


       The Clerk called the roll on the final passage of Substitute House Bill No. 2155, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.

  

       SUBSTITUTE HOUSE BILL NO. 2155, as amended by the Senate, having received the constitutional majority, was declared passed.


{{43168}}                   MESSAGE FROM THE SENATE


March 6, 2006

Mr. Speaker:


       The Senate has passed HOUSE BILL NO. 2466, with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "NEW SECTION. Sec. 1. A new section is added to chapter 82.08 RCW to read as follows:

        (1) The tax levied by RCW 82.08.020 does not apply to sales of computer hardware, computer peripherals, or software, not otherwise eligible for exemption under RCW 82.08.02565 or 82.08.975, used primarily in the development, design, and engineering of commercial airplanes or components of such airplanes, or to sales of or charges made for labor and services rendered in respect to installing the computer hardware, computer peripherals, or software. The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller shall retain a copy of the certificate for the seller's files.

        (2) As used in this section:

        (a) "Commercial airplane" and "component" have the meanings in RCW 82.32.550.

        (b) "Peripherals" includes keyboards, monitors, mouse devices, and other accessories that operate outside of the computer, excluding cables, conduit, wiring, and other similar property.

        (3) This section expires July 1, 2024.


        NEW SECTION. Sec. 2. A new section is added to chapter 82.12 RCW to read as follows:

        (1) The provisions of this chapter do not apply in respect to the use of computer hardware, computer peripherals, or software, not otherwise eligible for exemption under RCW 82.12.02565 or 82.12.975, used primarily in the development, design, and engineering of commercial airplanes or components of such airplanes, or to the use of labor and services rendered in respect to installing the computer hardware, computer peripherals, or software.

        (2) As used in this section:

        (a) "Commercial airplane" and "component" have the meanings in RCW 82.32.550.

        (b) "Peripherals" includes keyboards, monitors, mouse devices, and other accessories that operate outside of the computer, excluding cables, conduit, wiring, and other similar property.

        (3) This section expires July 1, 2024.


        NEW SECTION. Sec. 3. A new section is added to chapter 82.04 RCW to read as follows:

        (1) In computing the tax imposed under this chapter, a credit is allowed for each person for qualified preproduction development expenditures occurring after the effective date of this section.

        (2) The credit is equal to the amount of qualified preproduction development expenditures of a person, multiplied by the rate of 1.5 percent.

        (3) The credit shall be taken against taxes due for the same calendar year in which the qualified preproduction development expenditures are incurred. Credits may not be carried over. The credit for each calendar year may not exceed the amount of tax otherwise due under this chapter for the calendar year. Refunds may not be granted in the place of a credit.

        (4) Any person entitled to the credit in this section as a result of qualified preproduction development conducted under contract may assign all or any portion of the credit to the person contracting for the performance of the qualified preproduction development. 

        (5) The definitions in this subsection apply throughout this section.

        (a) "Aeronautics" means the study of flight and the science of building and operating commercial aircraft.

        (b) "Preproduction development" means research, design, and engineering activities performed in relation to the development of a product, product line, model, or model derivative, including prototype development, testing, and certification. The term includes the discovery of technological information, the translating of technological information into new or improved products, processes, techniques, formulas, or inventions, and the adaptation of existing products and models into new products or new models, or derivatives of products or models. The term does not include manufacturing activities or other production-oriented activities. The term does not include surveys and studies, social science and humanities research, market research or testing, quality control, sale promotion and service, computer software developed for internal use, and research in areas such as improved style, taste, and seasonal design.

        (c) "Qualified preproduction development" means preproduction development performed within this state in the field of aeronautics.

        (d) "Qualified preproduction development expenditures" means operating expenses, including wages, compensation of a proprietor or a partner in a partnership as determined by the department, benefits, supplies, and computer expenses, directly incurred in qualified preproduction development by a person claiming the credit provided in this section. The term does not include amounts paid to a person other than a public educational or research institution to conduct qualified preproduction development. The term does not include capital costs and overhead, such as expenses for land, structures, or depreciable property.

        (6) Credit may not be claimed for expenditures for which a credit is claimed under RCW 82.04.4452 or 82.04.4461.

        (7) This section expires July 1, 2024.


        NEW SECTION. Sec. 4. A new section is added to chapter 82.32 RCW to read as follows:

        (1) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources the legislature needs information on how a tax incentive is used.

        (2)(a) A person claiming the credit under section 3 of this act shall file a complete annual survey with the department. The survey is due by March 31st following any year in which a credit is claimed. The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590. The survey shall include the amount of the tax credit claimed, the qualified preproduction development expenditures during the calendar year for which the credit is claimed, whether the credit has been assigned under section 3(4) of this act and who assigned the credit, the number of new products or research projects by general classification, and the number of trademarks, patents, and copyrights associated with the qualified preproduction development activities for which a credit was claimed. The survey shall also include the following information for employment positions in Washington:

        (i) The number of total employment positions;

        (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;


        (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and

        (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.

        (b) As part of the annual survey, the department may request additional information necessary to measure the results of, or determine eligibility for, the tax credit program.

        (c) All information collected under this section, except the amount of the tax credit claimed, is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax credit claimed is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request, except as provided in (d) of this subsection. If the amount of the tax credit as reported on the survey is different than the amount actually claimed on the taxpayer's tax returns or otherwise allowed by the department, the amount actually claimed or allowed may be disclosed.

        (d) Persons for whom the actual amount of the tax credit claimed on the taxpayer's returns or otherwise allowed by the department is less than ten thousand dollars during the period covered by the survey may request the department to treat the tax credit amount as confidential under RCW 82.32.330.

        (3) If a person fails to submit a complete annual survey under subsection (2) of this section by the due date or any extension under RCW 82.32.590, the department shall declare the amount of taxes against which a credit was claimed for that year to be immediately due and payable. The department shall assess interest, but not penalties, on the taxes against which the credit was claimed. Interest shall be assessed at the rate provided for delinquent excise taxes under this chapter, retroactively to the date the credit was claimed, and shall accrue until the taxes against which the credit was claimed are repaid.

        (4) The department shall use the information from the annual survey required under subsection (2) of this section to prepare summary descriptive statistics by category. No fewer than three taxpayers shall be included in any category. The department shall report these statistics to the legislature each year by September 1st.

        (5) In conjunction with the reports due under RCW 82.32.545, by November 1, 2010, and November 1, 2023, the fiscal committees of the house of representatives and the senate, in consultation with the department, shall report to the legislature on the effectiveness of the credit authorized in section 3 of this act in regard to keeping Washington competitive. The report shall measure the effect of the credit authorized in section 3 of this act on job retention, net jobs created for Washington residents, company growth, diversification of the state's economy, cluster dynamics, and other factors as the committees select. The reports shall include a discussion of principles to apply in evaluating whether the legislature should reenact the credit authorized in section 3 of this act.

        (6) A person who is subject to the requirements in RCW 82.32.545 is not required to file a complete annual survey under this section if the person timely files the annual report required by RCW 82.32.545.


        Sec. 5. RCW 82.04.250 and 2003 2nd sp.s. c 1 s 2 are each amended to read as follows:

        (1) Upon every person ((except persons taxable under RCW 82.04.260 (5) or (13), 82.04.272, or subsection (2) of this section)) engaging within this state in the business of making sales at retail, except persons taxable as retailers under other provisions of this chapter, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of 0.471 percent.

        (2) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, except persons taxable under RCW 82.04.260(((13))) (11) or subsection (3) of this section, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of 0.484 percent.

(3) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, that is classified by the federal aviation administration as a FAR part 145 certificated repair station with airframe and instrument ratings and limited ratings for nondestructive testing, radio, Class 3 Accessory, and specialized services, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of .2904 percent.


        NEW SECTION. Sec. 6. A new section is added to chapter 82.32 RCW to read as follows:

        (1) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information on how a tax incentive is used.

        (2)(a) A person who reports taxes under RCW 82.04.250(3) shall file a complete annual survey with the department. The survey is due by March 31st following any year in which a person reports taxes under RCW 82.04.250(3). The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590. The survey shall include the amount of tax reduced under the preferential rate in RCW 82.04.250(3). The survey shall also include the following information for employment positions in Washington:

        (i) The number of total employment positions;

        (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;

        (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and

        (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.

        (b) As part of the annual survey, the department may request additional information necessary to measure the results of, or determine eligibility for, the preferential tax rate in RCW 82.04.250(3).

        (c) All information collected under this section, except the amount of the tax reduced under the preferential rate in RCW 82.04.250(3), is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax reduced is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request, except as provided in (d) of this subsection. If the amount of the tax reduced as reported on the survey is different than the amount actually reduced based on the taxpayer's excise tax returns or otherwise allowed by the department, the amount actually reduced may be disclosed.

        (d) Persons for whom the actual amount of the tax reduction is less than ten thousand dollars during the period covered by the survey may request the department to treat the amount of the tax reduction as confidential under RCW 82.32.330.

        (3) If a person fails to submit a complete annual survey under subsection (2) of this section by the due date or any extension under RCW 82.32.590, the department shall declare the amount of taxes reduced under the preferential rate in RCW 82.04.250(3) for that year to be immediately due and payable. The department shall assess interest, but not penalties, on the taxes. Interest shall be assessed at the rate provided for delinquent excise taxes under this chapter, retroactively to the date the reduced taxes were due, and shall accrue until the amount of the reduced taxes is repaid.

        (4) The department shall use the information from the annual survey required under subsection (2) of this section to prepare summary descriptive statistics by category. The department shall report these statistics to the legislature each year by September 1st.

        (5) By November 1, 2010, the fiscal committees of the house of representatives and the senate, in consultation with the department, shall report to the legislature on the effectiveness of the preferential tax rate provided in RCW 82.04.250(3) in regard to keeping Washington competitive. The report shall measure the effect of the preferential tax rate provided in RCW 82.04.250(3) on job retention, net jobs created for Washington residents, company growth, diversification of the state's economy, cluster dynamics, and other factors as the committees select. The report shall include a discussion of principles to apply in evaluating whether the legislature should extend the preferential tax rate provided in RCW 82.04.250(3).

        (6) This section expires December 31, 2012.


        Sec. 7. RCW 82.32.330 and 2005 c 326 s 1 and 2005 c 274 s 361 are each reenacted and amended to read as follows:

        (1) For purposes of this section:

        (a) "Disclose" means to make known to any person in any manner whatever a return or tax information;

        (b) "Return" means a tax or information return or claim for refund required by, or provided for or permitted under, the laws of this state which is filed with the department of revenue by, on behalf of, or with respect to a person, and any amendment or supplement thereto, including supporting schedules, attachments, or lists that are supplemental to, or part of, the return so filed;

        (c) "Tax information" means (i) a taxpayer's identity, (ii) the nature, source, or amount of the taxpayer's income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability deficiencies, overassessments, or tax payments, whether taken from the taxpayer's books and records or any other source, (iii) whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, (iv) a part of a written determination that is not designated as a precedent and disclosed pursuant to RCW 82.32.410, or a background file document relating to a written determination, and (v) other data received by, recorded by, prepared by, furnished to, or collected by the department of revenue with respect to the determination of the existence, or possible existence, of liability, or the amount thereof, of a person under the laws of this state for a tax, penalty, interest, fine, forfeiture, or other imposition, or offense: PROVIDED, That data, material, or documents that do not disclose information related to a specific or identifiable taxpayer do not constitute tax information under this section. Except as provided by RCW 82.32.410, nothing in this chapter shall require any person possessing data, material, or documents made confidential and privileged by this section to delete information from such data, material, or documents so as to permit its disclosure;

        (d) "State agency" means every Washington state office, department, division, bureau, board, commission, or other state agency;

        (e) "Taxpayer identity" means the taxpayer's name, address, telephone number, registration number, or any combination thereof, or any other information disclosing the identity of the taxpayer; and

        (f) "Department" means the department of revenue or its officer, agent, employee, or representative.

        (2) Returns and tax information shall be confidential and privileged, and except as authorized by this section, neither the department of revenue nor any other person may disclose any return or tax information.

        (3) This section does not prohibit the department of revenue from:

        (a) Disclosing such return or tax information in a civil or criminal judicial proceeding or an administrative proceeding:

        (i) In respect of any tax imposed under the laws of this state if the taxpayer or its officer or other person liable under Title 82 RCW is a party in the proceeding; or

        (ii) In which the taxpayer about whom such return or tax information is sought and another state agency are adverse parties in the proceeding;

        (b) Disclosing, subject to such requirements and conditions as the director shall prescribe by rules adopted pursuant to chapter 34.05 RCW, such return or tax information regarding a taxpayer to such taxpayer or to such person or persons as that taxpayer may designate in a request for, or consent to, such disclosure, or to any other person, at the taxpayer's request, to the extent necessary to comply with a request for information or assistance made by the taxpayer to such other person: PROVIDED, That tax information not received from the taxpayer shall not be so disclosed if the director determines that such disclosure would compromise any investigation or litigation by any federal, state, or local government agency in connection with the civil or criminal liability of the taxpayer or another person, or that such disclosure would identify a confidential informant, or that such disclosure is contrary to any agreement entered into by the department that provides for the reciprocal exchange of information with other government agencies which agreement requires confidentiality with respect to such information unless such information is required to be disclosed to the taxpayer by the order of any court;

        (c) Disclosing the name of a taxpayer with a deficiency greater than five thousand dollars and against whom a warrant under RCW 82.32.210 has been either issued or filed and remains outstanding for a period of at least ten working days. The department shall not be required to disclose any information under this subsection if a taxpayer: (i) Has been issued a tax assessment; (ii) has been issued a warrant that has not been filed; and (iii) has entered a deferred payment arrangement with the department of revenue and is making payments upon such deficiency that will fully satisfy the indebtedness within twelve months;

        (d) Disclosing the name of a taxpayer with a deficiency greater than five thousand dollars and against whom a warrant under RCW 82.32.210 has been filed with a court of record and remains outstanding;

        (e) Publishing statistics so classified as to prevent the identification of particular returns or reports or items thereof;


        (f) Disclosing such return or tax information, for official purposes only, to the governor or attorney general, or to any state agency, or to any committee or subcommittee of the legislature dealing with matters of taxation, revenue, trade, commerce, the control of industry or the professions;

        (g) Permitting the department of revenue's records to be audited and examined by the proper state officer, his or her agents and employees;

        (h) Disclosing any such return or tax information to a peace officer as defined in RCW 9A.04.110 or county prosecuting attorney, for official purposes. The disclosure may be made only in response to a search warrant, subpoena, or other court order, unless the disclosure is for the purpose of criminal tax enforcement. A peace officer or county prosecuting attorney who receives the return or tax information may disclose that return or tax information only for use in the investigation and a related court proceeding, or in the court proceeding for which the return or tax information originally was sought;

        (i) Disclosing any such return or tax information to the proper officer of the internal revenue service of the United States, the Canadian government or provincial governments of Canada, or to the proper officer of the tax department of any state or city or town or county, for official purposes, but only if the statutes of the United States, Canada or its provincial governments, or of such other state or city or town or county, as the case may be, grants substantially similar privileges to the proper officers of this state;

        (j) Disclosing any such return or tax information to the Department of Justice, including the Bureau of Alcohol, Tobacco ((and)), Firearms ((of the Department of the Treasury)) and Explosives within the Department of Justice, the Department of Defense, the Immigration and Customs Enforcement and the Customs and Border Protection agencies of the United States ((Customs Service)) Department of Homeland Security, the Coast Guard of the United States, and the United States Department of Transportation, or any authorized representative thereof, for official purposes;

        (k) Publishing or otherwise disclosing the text of a written determination designated by the director as a precedent pursuant to RCW 82.32.410;

        (l) Disclosing, in a manner that is not associated with other tax information, the taxpayer name, entity type, business address, mailing address, revenue tax registration numbers, North American industry classification system or standard industrial classification code of a taxpayer, and the dates of opening and closing of business. This subsection shall not be construed as giving authority to the department to give, sell, or provide access to any list of taxpayers for any commercial purpose;

        (m) Disclosing such return or tax information that is also maintained by another Washington state or local governmental agency as a public record available for inspection and copying under the provisions of chapter 42.56 RCW or is a document maintained by a court of record not otherwise prohibited from disclosure;

        (n) Disclosing such return or tax information to the United States department of agriculture for the limited purpose of investigating food stamp fraud by retailers;

        (o) Disclosing to a financial institution, escrow company, or title company, in connection with specific real property that is the subject of a real estate transaction, current amounts due the department for a filed tax warrant, judgment, or lien against the real property;

        (p) Disclosing to a person against whom the department has asserted liability as a successor under RCW 82.32.140 return or tax information pertaining to the specific business of the taxpayer to which the person has succeeded; ((or))

        (q) Disclosing such return or tax information in the possession of the department relating to the administration or enforcement of the real estate excise tax imposed under chapter 82.45 RCW, including information regarding transactions exempt or otherwise not subject to tax; or

        (r) Disclosing the least amount of return or tax information necessary for the reports required in section 6 (4) and (5) of this act when the number of taxpayers included in the reports or any part of the reports cannot be classified to prevent the identification of taxpayers or particular returns, reports, tax information, or items in the possession of the department.

        (4)(a) The department may disclose return or taxpayer information to a person under investigation or during any court or administrative proceeding against a person under investigation as provided in this subsection (4). The disclosure must be in connection with the department's official duties relating to an audit, collection activity, or a civil or criminal investigation. The disclosure may occur only when the person under investigation and the person in possession of data, materials, or documents are parties to the return or tax information to be disclosed. The department may disclose return or tax information such as invoices, contracts, bills, statements, resale or exemption certificates, or checks. However, the department may not disclose general ledgers, sales or cash receipt journals, check registers, accounts receivable/payable ledgers, general journals, financial statements, expert's workpapers, income tax returns, state tax returns, tax return workpapers, or other similar data, materials, or documents.

        (b) Before disclosure of any tax return or tax information under this subsection (4), the department shall, through written correspondence, inform the person in possession of the data, materials, or documents to be disclosed. The correspondence shall clearly identify the data, materials, or documents to be disclosed. The department may not disclose any tax return or tax information under this subsection (4) until the time period allowed in (c) of this subsection has expired or until the court has ruled on any challenge brought under (c) of this subsection.

        (c) The person in possession of the data, materials, or documents to be disclosed by the department has twenty days from the receipt of the written request required under (b) of this subsection to petition the superior court of the county in which the petitioner resides for injunctive relief. The court shall limit or deny the request of the department if the court determines that:

        (i) The data, materials, or documents sought for disclosure are cumulative or duplicative, or are obtainable from some other source that is more convenient, less burdensome, or less expensive;

        (ii) The production of the data, materials, or documents sought would be unduly burdensome or expensive, taking into account the needs of the department, the amount in controversy, limitations on the petitioner's resources, and the importance of the issues at stake; or

        (iii) The data, materials, or documents sought for disclosure contain trade secret information that, if disclosed, could harm the petitioner.

        (d) The department shall reimburse reasonable expenses for the production of data, materials, or documents incurred by the person in possession of the data, materials, or documents to be disclosed.

        (e) Requesting information under (b) of this subsection that may indicate that a taxpayer is under investigation does not constitute a disclosure of tax return or tax information under this section.

        (5) Any person acquiring knowledge of any return or tax information in the course of his or her employment with the department of revenue and any person acquiring knowledge of any return or tax information as provided under subsection (3)(f), (g), (h), (i), (j), or (n) of this section, who discloses any such return or tax information to another person not entitled to knowledge of such return or tax information under the provisions of this section, is guilty of a misdemeanor. If the person guilty of such violation is an officer or employee of the state, such person shall forfeit such office or employment and shall be incapable of holding any public office or employment in this state for a period of two years thereafter.


        Sec. 8. RCW 82.32.590 and 2005 c 514 s 1001 are each amended to read as follows:

        (1) If the department finds that the failure of a taxpayer to file an annual survey under RCW 82.04.4452, section 4 of this act, or section 6 of this act by the due date was the result of circumstances beyond the control of the taxpayer, the department shall extend the time for filing the survey. Such extension shall be for a period of thirty days from the date the department issues its written notification to the taxpayer that it qualifies for an extension under this section. The department may grant additional extensions as it deems proper.

        (2) In making a determination whether the failure of a taxpayer to file an annual survey by the due date was the result of circumstances beyond the control of the taxpayer, the department shall be guided by rules adopted by the department for the waiver or cancellation of penalties when the underpayment or untimely payment of any tax was due to circumstances beyond the control of the taxpayer.


        Sec. 9. RCW 82.32.600 and 2005 c 514 s 1002 are each amended to read as follows:

        (1) Persons required to file surveys under RCW 82.04.4452, section 4 of this act, or section 6 of this act must electronically file with the department all surveys, returns, and any other forms or information the department requires in an electronic format as provided or approved by the department((, unless the department grants relief under subsection (2) of this section)). As used in this section, "returns" has the same meaning as "return" in RCW 82.32.050.

        (2) ((Upon request, the department may relieve a person of the obligations in subsection (1) of this section if the person's taxes have been reduced a cumulative total of less than one thousand dollars from all of the credits, exemptions, or preferential business and occupation tax rates, for which a person is required to file an annual survey under RCW 82.04.4452, 82.32.535, 82.32.545, 82.32.570, 82.32.560, 82.60.070, or 82.63.020.

        (3) Persons who no longer qualify for relief under subsection (2) of this section will be notified in writing by the department and must comply with subsection (1) of this section by the date provided in the notice.

        (4))) Any survey, return, or any other form or information required to be filed in an electronic format under subsection (1) of this section is not filed until received by the department in an electronic format.

(3) The department may waive the electronic filing requirement in subsection (1) of this section for good cause shown.


        Sec. 10. RCW 82.04.4463 and 2005 c 514 s 501 are each amended to read as follows:

        (1) In computing the tax imposed under this chapter, a credit is allowed for property taxes and leasehold excise taxes paid during the calendar year.

        (2) The credit is equal to:

        (a)(i)(A) Property taxes paid on new buildings, and land upon which this property is located, built after December 1, 2003, and used exclusively in manufacturing commercial airplanes or components of such airplanes; and

        (B) Leasehold excise taxes paid with respect to a building built after January 1, 2006, the land upon which the building is located, or both, if the building is used exclusively in manufacturing commercial airplanes or components of such airplanes; or

        (ii) Property taxes attributable to an increase in assessed value due to the renovation or expansion, after December 1, 2003, of a building used exclusively in manufacturing commercial airplanes or components of such airplanes; and

        (b) An amount equal to property taxes paid on machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 and acquired after December 1, 2003, multiplied by a fraction. The numerator of the fraction is the total taxable amount subject to the tax imposed under RCW 82.04.260(((13))) (11) and the denominator of the fraction is the total taxable amount subject to the tax imposed under all manufacturing classifications in chapter 82.04 RCW, required to be reported on the person's returns for the calendar year before the calendar year in which the credit under this section is earned. No credit is available under this subsection (2)(b) if either the numerator or the denominator of the fraction is zero. If the fraction is greater than or equal to nine-tenths, then the fraction is rounded to one. For purposes of this subsection, "returns" means the combined excise tax returns for the calendar year.

        (3) For the purposes of this section, "commercial passenger airplane" and "component" have the meanings given in RCW 82.32.550.

        (4) A person taking the credit under this section is subject to all the requirements of chapter 82.32 RCW. In addition, the person must report as required under RCW 82.32.545. A credit earned during one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year, but may not be carried over a second year. No refunds may be granted for credits under this section.

        (5) In addition to all other requirements under this title, a person taking the credit under this section must report as required under RCW 82.32.545.

        (6) This section expires July 1, 2024.


        NEW SECTION. Sec. 11. Section 10 of this act applies with respect to leasehold excise taxes paid on or after January 1, 2007.


        NEW SECTION. Sec. 12. Sections 1 through 9 of this act take effect July 1, 2006.


        NEW SECTION. Sec. 13. Sections 10 and 11 of this act take effect January 1, 2007.


        NEW SECTION. Sec. 14. Section 5 of this act expires July 1, 2011."


        On page 1, line 2 of the title, after "businesses;" strike the remainder of the title and insert "amending RCW 82.04.250, 82.32.590, 82.32.600, and 82.04.4463; reenacting and amending RCW 82.32.330; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; adding a new section to chapter 82.04 RCW; adding new sections to chapter 82.32 RCW; creating a new section; providing effective dates; and providing expiration dates."



and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House concurred in the Senate amendment to HOUSE BILL NO. 2466 and advanced the bill as amended by the Senate to final passage.


{{43169}}                FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


       Representatives McIntire and Orcutt spoke in favor the passage of the bill.


       The Speaker (Representative Morris presiding) stated the question before the House to be final passage of House Bill No. 2466, as amended by the Senate.


{{43170}}                                    ROLL CALL


       The Clerk called the roll on the final passage of House Bill No. 2466, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 95, Nays - 3, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 95.

       Voting nay: Representatives Cody, Hasegawa and Moeller - 3.

  

       HOUSE BILL NO. 2466, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


       The Senate receded from the amendment by Committee on Ways & Means to ENGROSSED SUBSTITUTE HOUSE BILL NO. 2475. Under suspension of the rules the bill was returned to second reading for purpose of amendment. The Senate passed the bill with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "Sec. 1. RCW 74.39A.270 and 2004 c 3 s 1 are each amended to read as follows:

        (1) Solely for the purposes of collective bargaining and as expressly limited under subsections (2) and (3) of this section, the governor is the public employer, as defined in chapter 41.56 RCW, of individual providers, who, solely for the purposes of collective bargaining, are public employees as defined in chapter 41.56 RCW. To accommodate the role of the state as payor for the community-based services provided under this chapter and to ensure coordination with state employee collective bargaining under chapter 41.80 RCW and the coordination necessary to implement RCW 74.39A.300, the public employer shall be represented for bargaining purposes by the governor or the governor's designee appointed under chapter 41.80 RCW. The governor or governor's designee shall periodically consult with the authority during the collective bargaining process to allow the authority to communicate issues relating to the long-term in-home care services received by consumers. The governor or the governor's designee shall consult the authority on all issues for which the exclusive bargaining representative requests to engage in collective bargaining under subsection (6) of this section. The authority shall work with the developmental disabilities council, the governor's committee on disability issues and employment, the state council on aging, and other consumer advocacy organizations to obtain informed input from consumers on their interests, including impacts on consumer choice, for all issues proposed for collective bargaining under subsection (6) of this section.

        (2) Chapter 41.56 RCW governs the collective bargaining relationship between the governor and individual providers, except as otherwise expressly provided in this chapter and except as follows:

        (a) The only unit appropriate for the purpose of collective bargaining under RCW 41.56.060 is a statewide unit of all individual providers;

        (b) The showing of interest required to request an election under RCW 41.56.060 is ten percent of the unit, and any intervener seeking to appear on the ballot must make the same showing of interest;

        (c) The mediation and interest arbitration provisions of RCW 41.56.430 through 41.56.470 and 41.56.480 apply, except that:

        (i) With respect to commencement of negotiations between the governor and the bargaining representative of individual providers, negotiations shall be commenced by May 1st of any year prior to the year in which an existing collective bargaining agreement expires;

        (ii) With respect to factors to be taken into consideration by an interest arbitration panel, the panel shall consider the financial ability of the state to pay for the compensation and fringe benefit provisions of a collective bargaining agreement; and

        (iii) The decision of the arbitration panel is not binding on the legislature and, if the legislature does not approve the request for funds necessary to implement the compensation and fringe benefit provisions of the arbitrated collective bargaining agreement, is not binding on the authority or the state;

        (d) Individual providers do not have the right to strike; and

        (e) Individual providers who are related to, or family members of, consumers or prospective consumers are not, for that reason, exempt from this chapter or chapter 41.56 RCW.

        (3) Individual providers who are public employees solely for the purposes of collective bargaining under subsection (1) of this section are not, for that reason, employees of the state, its political subdivisions, or an area agency on aging for any purpose. Chapter 41.56 RCW applies only to the governance of the collective bargaining relationship between the employer and individual providers as provided in subsections (1) and (2) of this section.

        (4) Consumers and prospective consumers retain the right to select, hire, supervise the work of, and terminate any individual provider providing services to them. Consumers may elect to receive long-term in-home care services from individual providers who are not referred to them by the authority.

        (5) In implementing and administering this chapter, neither the authority nor any of its contractors may reduce or increase the hours of service for any consumer below or above the amount determined to be necessary under any assessment prepared by the department or an area agency on aging.

        (6) Except as expressly limited in this section and RCW 74.39A.300, the wages, hours, and working conditions of individual providers are determined solely through collective bargaining as provided in this chapter. No agency or department of the state((, other than the authority,)) may establish policies or rules governing the wages or hours of individual providers. However, this subsection does not modify:

        (a) The department's authority to establish a plan of care for each consumer ((and to determine the hours)) or its core responsibility to manage long-term in-home care services under this chapter, including determination of the level of care that each consumer is eligible to receive. However, at the request of the exclusive bargaining representative, the governor or the governor's designee appointed under chapter 41.80 RCW shall engage in collective bargaining, as defined in RCW 41.56.030(4), with the exclusive bargaining representative over how the department's core responsibility affects hours of work for individual providers. This subsection shall not be interpreted to require collective bargaining over an individual consumer's plan of care;

        (b) The department's authority to terminate its contracts with individual providers who are not adequately meeting the needs of a particular consumer, or to deny a contract under RCW 74.39A.095(8);

        (c) The consumer's right to assign hours to one or more individual providers selected by the consumer within the maximum hours determined by his or her plan of care;

        (d) The consumer's right to select, hire, terminate, supervise the work of, and determine the conditions of employment for each individual provider providing services to the consumer under this chapter;

        (e) The department's obligation to comply with the federal medicaid statute and regulations and the terms of any community-based waiver granted by the federal department of health and human services and to ensure federal financial participation in the provision of the services; and

        (f) The legislature's right to make programmatic modifications to the delivery of state services under this title, including standards of eligibility of consumers and individual providers participating in the programs under this title, and the nature of services provided. The governor shall not enter into, extend, or renew any agreement under this chapter that does not expressly reserve the legislative rights described in this subsection (6)(f).

        (7)(a) The state, the department, the authority, the area agencies on aging, or their contractors under this chapter may not be held vicariously or jointly liable for the action or inaction of any individual provider or prospective individual provider, whether or not that individual provider or prospective individual provider was included on the authority's referral registry or referred to a consumer or prospective consumer. The existence of a collective bargaining agreement, the placement of an individual provider on the referral registry, or the development or approval of a plan of care for a consumer who chooses to use the services of an individual provider and the provision of case management services to that consumer, by the department or an area agency on aging, does not constitute a special relationship with the consumer.

        (b) The members of the board are immune from any liability resulting from implementation of this chapter.

        (8) Nothing in this section affects the state's responsibility with respect to unemployment insurance for individual providers. However, individual providers are not to be considered, as a result of the state assuming this responsibility, employees of the state.


        NEW SECTION. Sec. 2. 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 2 of the title, after "providers;" strike the remainder of the title and insert "amending RCW 74.39A.270; and declaring an emergency."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House concurred in the Senate amendment to ENGROSSED SUBSTITUTE HOUSE BILL NO. 2475 and advanced the bill as amended by the Senate to final passage.


{{43172}}                FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


       Representatives Conway and Condotta spoke in favor the passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Engrossed Substitute House Bill No. 2475, as amended by the Senate.


{{43173}}                                    ROLL CALL


       The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 2475, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 95, Nays - 3, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Blake, Buck, Buri, Campbell, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 95.

       Voting nay: Representatives Bailey, Chandler and Talcott - 3.

  

       ENGROSSED SUBSTITUTE HOUSE BILL NO. 2475, as amended by the Senate, having received the constitutional majority, was declared passed.


{{43174}}                   MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate has passed SECOND SUBSTITUTE HOUSE BILL NO. 2754, with the following amendment:


        On page 4, after line 7, insert the following:


        "Sec. 9. RCW 70.47.060 and 2004 c 192 s 3 are each amended to read as follows:

        The administrator has the following powers and duties:

        (1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care. In addition, the administrator may, to the extent that funds are available, offer as basic health plan services chemical dependency services, mental health services and organ transplant services; however, no one service or any combination of these three services shall increase the actuarial value of the basic health plan benefits by more than five percent excluding inflation, as determined by the office of financial management. All subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive covered basic health care services in return for premium payments to the plan. The schedule of services shall emphasize proven preventive and primary health care and shall include all services necessary for prenatal, postnatal, and well-child care. However, with respect to coverage for subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that such services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. The schedule of services shall also include a separate schedule of basic health care services for children, eighteen years of age and younger, for those subsidized or nonsubsidized enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services, the administrator shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.47.030, and such other factors as the administrator deems appropriate.

        (2)(a) To design and implement a structure of periodic premiums due the administrator from subsidized enrollees that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members. The enrollment of children shall not require the enrollment of their parent or parents who are eligible for the plan. The structure of periodic premiums shall be applied to subsidized enrollees entering the plan as individuals pursuant to subsection (11) of this section and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (12) of this section.

        (b) To determine the periodic premiums due the administrator from nonsubsidized enrollees. Premiums due from nonsubsidized enrollees shall be in an amount equal to the cost charged by the managed health care system provider to the state for the plan plus the administrative cost of providing the plan to those enrollees and the premium tax under RCW 48.14.0201.

        (c) To determine the periodic premiums due the administrator from health coverage tax credit eligible enrollees. Premiums due from health coverage tax credit eligible enrollees must be in an amount equal to the cost charged by the managed health care system provider to the state for the plan, plus the administrative cost of providing the plan to those enrollees and the premium tax under RCW 48.14.0201. The administrator will consider the impact of eligibility determination by the appropriate federal agency designated by the Trade Act of 2002 (P.L. 107-210) as well as the premium collection and remittance activities by the United States internal revenue service when determining the administrative cost charged for health coverage tax credit eligible enrollees.

        (d) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator. The administrator shall establish a mechanism for receiving premium payments from the United States internal revenue service for health coverage tax credit eligible enrollees.

        (e) To develop, as an offering by every health carrier providing coverage identical to the basic health plan, as configured on January 1, 2001, a basic health plan model plan with uniformity in enrollee cost-sharing requirements.

        (3) To evaluate, with the cooperation of participating managed health care system providers, the impact on the basic health plan of enrolling health coverage tax credit eligible enrollees. The administrator shall issue to the appropriate committees of the legislature preliminary evaluations on June 1, 2005, and January 1, 2006, and a final evaluation by June 1, 2006. The evaluation shall address the number of persons enrolled, the duration of their enrollment, their utilization of covered services relative to other basic health plan enrollees, and the extent to which their enrollment contributed to any change in the cost of the basic health plan.

        (4) To end the participation of health coverage tax credit eligible enrollees in the basic health plan if the federal government reduces or terminates premium payments on their behalf through the United States internal revenue service.

        (5) To design and implement a structure of enrollee cost-sharing due a managed health care system from subsidized, nonsubsidized, and health coverage tax credit eligible enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services.

        (6) To limit enrollment of persons who qualify for subsidies so as to prevent an overexpenditure of appropriations for such purposes. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists. Such a closure does not apply to health coverage tax credit eligible enrollees who receive a premium subsidy from the United States internal revenue service as long as the enrollees qualify for the health coverage tax credit program.

        (7) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020. The level of subsidy provided to persons who qualify may be based on the lowest cost plans, as defined by the administrator.

        (8) To adopt a schedule for the orderly development of the delivery of services and availability of the plan to residents of the state, subject to the limitations contained in RCW 70.47.080 or any act appropriating funds for the plan.

        (9) To solicit and accept applications from managed health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan for subsidized enrollees, nonsubsidized enrollees, or health coverage tax credit eligible enrollees. The administrator shall endeavor to assure that covered basic health care services are available to any enrollee of the plan from among a selection of two or more participating managed health care systems. In adopting any rules or procedures applicable to managed health care systems and in its dealings with such systems, the administrator shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several areas of the state. Contracts with participating managed health care systems shall ensure that basic health plan enrollees who become eligible for medical assistance may, at their option, continue to receive services from their existing providers within the managed health care system if such providers have entered into provider agreements with the department of social and health services.

        (10) To receive periodic premiums from or on behalf of subsidized, nonsubsidized, and health coverage tax credit eligible enrollees, deposit them in the basic health plan operating account, keep records of enrollee status, and authorize periodic payments to managed health care systems on the basis of the number of enrollees participating in the respective managed health care systems.

        (11) To accept applications from individuals residing in areas served by the plan, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan as subsidized, nonsubsidized, or health coverage tax credit eligible enrollees, to give priority to members of the Washington national guard and reserves who served in operation enduring freedom, operation Iraqi freedom, or operation noble eagle, and their spouses and dependents, for enrollment in the Washington basic health plan, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and on a reasonable schedule defined by the authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. Funds received by a family as part of participation in the adoption support program authorized under RCW 26.33.320 and 74.13.100 through 74.13.145 shall not be counted toward a family's current gross family income for the purposes of this chapter. When an enrollee fails to report income or income changes accurately, the administrator shall have the authority either to bill the enrollee for the amounts overpaid by the state or to impose civil penalties of up to two hundred percent of the amount of subsidy overpaid due to the enrollee incorrectly reporting income. The administrator shall adopt rules to define the appropriate application of these sanctions and the processes to implement the sanctions provided in this subsection, within available resources. No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they will be allowed to reenroll in the plan.

        (12) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a managed health care system. The administrator may require that a business owner pay at least an amount equal to what the employee pays after the state pays its portion of the subsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a managed care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating managed health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes.

        (13) To determine the rate to be paid to each participating managed health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same or actuarially equivalent for similar enrollees, the rates negotiated with participating managed health care systems may vary among the systems. In negotiating rates with participating systems, the administrator shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area, the need to conserve the resources of the basic health plan trust account, and other factors the administrator finds relevant.

        (14) To monitor the provision of covered services to enrollees by participating managed health care systems in order to assure enrollee access to good quality basic health care, to require periodic data reports concerning the utilization of health care services rendered to enrollees in order to provide adequate information for evaluation, and to inspect the books and records of participating managed health care systems to assure compliance with the purposes of this chapter. In requiring reports from participating managed health care systems, including data on services rendered enrollees, the administrator shall endeavor to minimize costs, both to the managed health care systems and to the plan. The administrator shall coordinate any such reporting requirements with other state agencies, such as the insurance commissioner and the department of health, to minimize duplication of effort.

        (15) To evaluate the effects this chapter has on private employer-based health care coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state.

        (16) To develop a program of proven preventive health measures and to integrate it into the plan wherever possible and consistent with this chapter.

        (17) To provide, consistent with available funding, assistance for rural residents, underserved populations, and persons of color.

        (18) In consultation with appropriate state and local government agencies, to establish criteria defining eligibility for persons confined or residing in government-operated institutions.


        (19) To administer the premium discounts provided under RCW 48.41.200(3)(a) (i) and (ii) pursuant to a contract with the Washington state health insurance pool."


        Renumber the remaining sections consecutively and correct internal references accordingly.


        On page 1, line 2 of the title, after "43.60A.010" insert "and 70.47.060"


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House concurred in the Senate amendment to SECOND SUBSTITUTE HOUSE BILL NO. 2754 and advanced the bill as amended by the Senate to final passage.


{{43175}}                FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


       Representatives Morrell and Alexander spoke in favor the passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Second Substitute House Bill No. 2754, as amended by the Senate.


{{43176}}                                    ROLL CALL


       The Clerk called the roll on the final passage of Second Substitute House Bill No. 2754, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.

  

       SECOND SUBSTITUTE HOUSE BILL NO. 2754, as amended by the Senate, having received the constitutional majority, was declared passed.


{{43177}}                   MESSAGE FROM THE SENATE

March 1, 2006

Mr. Speaker:


       The Senate has passed ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2572, with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "NEW SECTION. Sec. 1. FINDINGS AND INTENT. (1) The legislature finds that many small employers struggle with the cost of providing employer-sponsored health insurance coverage to their employees, while others are unable to offer employer-sponsored health insurance due to its high cost. Low-wage workers also struggle with the burden of paying their share of the costs of employer-sponsored health insurance, while others turn down their employer's offer of coverage due to its costs. A small employer health insurance program that provides subsidies for employers who want to purchase one type of insurance and allows other employers to choose more kinds of low-cost insurance products would help more small employers provide health insurance for their employees.

        (2) The legislature intends, through establishment of a small employer health insurance partnership program, to remove economic barriers to health insurance coverage for low-wage employees of small employers by building on the private sector health benefit plan system and encouraging employer and employee participation in employer-sponsored health benefit plan coverage.


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

        (1) "Administrator" means the administrator of the Washington state health care authority, established under chapter 41.05 RCW.

        (2) "Eligible employee" means an individual who:

        (a) Is a resident of the state of Washington;

        (b) Has family income less than two hundred percent of the federal poverty level, as determined annually by the federal department of health and human services; and

        (c) Is employed by a small employer.

        (3) "Health benefit plan" has the same meaning as defined in RCW 48.43.005 or any plan provided by a self-funded multiple employer welfare arrangement as defined in RCW 48.125.010 or by a self-insured employer-sponsored health benefit arrangement under the federal employee retirement income security act of 1974, as amended.

        (4) "Program" means the small employer health insurance partnership program established in section 3 of this act.

        (5) "Small employer" has the same meaning as defined in RCW 48.43.005.

        (6) "Subsidy" means payment or reimbursement to an eligible employee toward the purchase of a health benefit plan, and may include a net billing arrangement with insurance carriers or a prospective or retrospective payment for health benefit plan premiums.


        NEW SECTION. Sec. 3. SMALL EMPLOYER HEALTH INSURANCE PARTNERSHIP PROGRAM ESTABLISHED. To the extent funding is appropriated in the operating budget for this purpose, the small employer health insurance partnership program is established. The administrator shall be responsible for the implementation and operation of the small employer health insurance partnership program, directly or by contract. The administrator shall offer premium subsidies to eligible employees under section 5 of this act, subsidies to fund a health savings account under section 4 of this act, or a business and occupation tax deduction under section 6 of this act.


        NEW SECTION. Sec. 4. HEALTH SAVINGS ACCOUNT SUBSIDIES TO ELIGIBLE EMPLOYEES. (1) Beginning July 1, 2007, the administrator shall accept applications from eligible employees, on behalf of themselves, their spouses, and their dependent children, to receive subsidies to fund a health savings account through the small employer health insurance partnership program.

        (2) Health savings account subsidy payments may be provided to eligible employees if:

        (a) The eligible employee is employed by a small employer; and

        (b) The eligible employee participates in an employer sponsored high deductible health plan and health savings account that conforms to section 223, Part VII of subchapter B of chapter 1 of the internal revenue code of 1986.

        (3) The amount of an eligible employee's health savings account subsidy shall be determined by the legislature in the biennial operating budget.

        (4) After an eligible individual has enrolled in the program, the program shall issue subsidies in an amount determined pursuant to subsection (3) of this section to either the eligible employee or to the carrier designated by the eligible employee.

        (5) An eligible employee must agree to provide verification of continued enrollment in his or her small employer's health benefit plan on a semiannual basis or to notify the administrator whenever his or her enrollment status changes, whichever is earlier. Verification or notification may be made directly by the employee, or through his or her employer or the carrier providing the small employer health benefit plan. When necessary, the administrator has the authority to perform retrospective audits on health savings account subsidy accounts. The administrator may suspend or terminate an employee's participation in the program and seek repayment of any subsidy amounts paid due to the omission or misrepresentation of an applicant or enrolled employee. The administrator shall adopt rules to define the appropriate application of these sanctions and the processes to implement the sanctions provided in this subsection, within available resources.


        NEW SECTION. Sec. 5. PREMIUM SUBSIDIES TO ELIGIBLE EMPLOYEES. (1) Beginning July 1, 2007, the administrator shall accept applications from eligible employees, on behalf of themselves, their spouses, and their dependent children, to receive premium subsidies through the small employer health insurance partnership program.

        (2) Premium subsidy payments may be provided to eligible employees if:

        (a) The eligible employee is employed by a small employer; and

        (b) The small employer will pay at least forty percent of the monthly premium cost for health benefit plan coverage of the eligible employee.

        (3) The amount of an eligible employee's premium subsidy shall be determined by applying the sliding scale subsidy schedule developed for subsidized basic health plan enrollees under RCW 70.47.060 to the employee's premium obligation for his or her employer's health benefit plan. However, in no case shall the amount of an eligible employee's monthly premium subsidy exceed the amount he or she would have received as a basic health plan enrollee.

        (4) After an eligible individual has enrolled in the program, the program shall issue subsidies in an amount determined pursuant to subsection (3) of this section to either the eligible employee or to the carrier designated by the eligible employee.

        (5) An eligible employee must agree to provide verification of continued enrollment in his or her small employer's health benefit plan on a semiannual basis or to notify the administrator whenever his or her enrollment status changes, whichever is earlier. Verification or notification may be made directly by the employee, or through his or her employer or the carrier providing the small employer health benefit plan. When necessary, the administrator has the authority to perform retrospective audits on premium subsidy accounts. The administrator may suspend or terminate an employee's participation in the program and seek repayment of any subsidy amounts paid due to the omission or misrepresentation of an applicant or enrolled employee. The administrator shall adopt rules to define the appropriate application of these sanctions and the processes to implement the sanctions provided in this subsection, within available resources.


        NEW SECTION. Sec. 6. A new section is added to chapter 82.04 RCW to read as follows:

        (1) In computing tax there may be deducted from the measure of tax the amount paid by small employers to provide health care services for its employees. Payments made by employees are not eligible for deduction under this subsection.

        (2) For the purposes of this section, the following definitions apply:

        (a) "Small employer" has the meaning provided in RCW 48.43.005;

        (b) "Health care services" means a health benefit plan as defined in RCW 48.43.005, contributions to health savings accounts as defined by the United States internal revenue service, or other health care services purchased by the small employer for its employees.


        NEW SECTION. Sec. 7. ENROLLMENT LIMITS TO REMAIN WITHIN APPROPRIATION. Enrollment in the small employer health insurance partnership program is not an entitlement and shall not result in expenditures that exceed the amount that has been appropriated for the program in the operating budget. If it appears that continued enrollment will result in expenditures exceeding the appropriated level for a particular fiscal year, the administrator may freeze new enrollment in the program and establish a waiting list of eligible employees who shall receive subsidies only when sufficient funds are available.


        NEW SECTION. Sec. 8. COLLABORATION WITH COMMUNITY ORGANIZATIONS. In implementing the small employer health insurance partnership program, the administrator shall work with organizations awarded grants through the community health care collaborative grant program established under Engrossed Second Substitute Senate Bill No. 6459, if enacted. The administrator may use funds appropriated for the small employer health insurance partnership program to enhance a grant otherwise awarded to a community-based organization. The grant enhancement shall be used by the organization specifically to provide a premium subsidy to eligible employees within the geographic region it serves.


        NEW SECTION. Sec. 9. RULES. The administrator shall adopt all rules necessary for the implementation and operation of the small employer health insurance partnership program. As part of the rule development process, the administrator shall consult with small employers, carriers, employee organizations, and the office of the insurance commissioner under Title 48 RCW to determine an effective and efficient method for the payment of subsidies under this chapter, including methods for electronic funds transfers of the subsidy. All rules shall be adopted in accordance with chapter 34.05 RCW.


        NEW SECTION. Sec. 10. REPORTS TO THE LEGISLATURE. The administrator shall report biennially to the relevant policy and fiscal committees of the legislature on the effectiveness and efficiency of the small employer health insurance partnership program, including the services and benefits covered under the purchased health benefit plans, consumer satisfaction, and other program operational issues.


        NEW SECTION. Sec. 11. STATE CHILDREN'S HEALTH INSURANCE PROGRAM--FEDERAL WAIVER REQUEST. The department of social and health services shall submit a request to the federal department of health and human services by October 1, 2006, for a state children's health insurance program section 1115 demonstration waiver. The waiver request shall seek authorization from the federal government to draw down Washington state's unspent state children's health insurance program allotment to finance basic health plan coverage, as provided in chapter 70.47 RCW, for parents of children enrolled in medical assistance or the state children's health insurance program. The waiver also shall seek authorization from the federal government to utilize the resulting state savings to finance expanded basic health plan enrollment, or subsidies provided to low-wage workers through the small employer health insurance partnership program established in this chapter.


        NEW SECTION. Sec. 12. The joint legislative audit and review committee shall conduct a program and fiscal review of the small employer health insurance partnership program and report their findings and recommendation to the appropriate committees of the legislature no later than November 2009. The review shall include an assessment of at least the following issues:

        (1) The extent to which eligible employees' employers were providing health insurance coverage prior to their entry into the program, and whether their employer modified their contribution to health plan premium costs or the scope of coverage provided prior to the employee's entry into the program;

        (2) The extent to which eligible employees are employed by an employer who began providing health insurance coverage to its employees due at least in part to the availability of the program;

        (3) The average percentage and dollar amount of employer contributions to premiums for eligible employees and dependents participating in the program;

        (4) The scope of covered benefits and the cost of employer-sponsored health plans being subsidized through the program; and

        (5) The amount of the state premium subsidy per participating employee and their dependents, in comparison to the cost that the state would have incurred if the eligible employees and their dependents were enrolled in the basic health plan.


        Sec. 13. RCW 48.21.045 and 2004 c 244 s 1 are each amended to read as follows:

        (1)(((a))) An insurer offering any health benefit plan to a small employer, either directly or through an association or member-governed group formed specifically for the purpose of purchasing health care, may offer and actively market to the small employer ((a)) no more than one health benefit plan featuring a limited schedule of covered health care services. ((Nothing in this subsection shall preclude an insurer from offering, or a small employer from purchasing, other health benefit plans that may have more comprehensive benefits than those included in the product offered under this subsection. An insurer offering a health benefit plan under this subsection shall clearly disclose all covered benefits to the small employer in a brochure filed with the commissioner.

        (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.21.130, 48.21.140, 48.21.141, 48.21.142, 48.21.144, 48.21.146, 48.21.160 through 48.21.197, 48.21.200, 48.21.220, 48.21.225, 48.21.230, 48.21.235, 48.21.240, 48.21.244, 48.21.250, 48.21.300, 48.21.310, or 48.21.320.

        (2))) (a) The plan offered under this subsection may be offered with a choice of cost-sharing arrangements, and may, but is not required to, comply with: RCW 48.21.130 through 48.21.240, 48.21.244 through 48.21.280, 48.21.300 through 48.21.320, 48.43.045(1) except as required in (b) of this subsection, 48.43.093, 48.43.115 through 48.43.185, 48.43.515(5), or 48.42.100.

        (b) In offering the plan under this subsection, the insurer must offer the small employer the option of permitting every category of health care provider to provide health services or care for conditions covered by the plan pursuant to RCW 48.43.045(1).

        (2) An insurer offering the plan under subsection (1) of this section must also offer and actively market to the small employer at least one additional health benefit plan.

        (3) Nothing in this section shall prohibit an insurer from offering, or a purchaser from seeking, health benefit plans with benefits in excess of the health benefit plan offered under subsection (1) of this section. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

        (((3))) (4) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

        (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

        (i) Geographic area;

        (ii) Family size;

        (iii) Age; and

        (iv) Wellness activities.

        (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

        (c) The insurer shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (((3))) (4).

        (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.


        (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.

        (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

        (i) Changes to the enrollment of the small employer;

        (ii) Changes to the family composition of the employee;

        (iii) Changes to the health benefit plan requested by the small employer; or

        (iv) Changes in government requirements affecting the health benefit plan.

        (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

        (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. A carrier may develop its rates based on claims costs ((due to network provider reimbursement schedules or type of network)) for a plan. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

        (i) Except for small group health benefit plans that qualify as insurance coverage combined with a health savings account as defined by the United States internal revenue service, adjusted community rates established under this section shall pool the medical experience of all small groups purchasing coverage. However, annual rate adjustments for each small group health benefit plan may vary by up to plus or minus ((four)) eight percentage points from the overall adjustment of a carrier's entire small group pool((, such overall adjustment to be approved by the commissioner, upon a showing by the carrier, certified by a member of the American academy of actuaries that: (i) The variation is a result of deductible leverage, benefit design, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than four percentage points are subject to review by the commissioner, and must be approved or denied within sixty days of submittal)) if certified by a member of the American academy of actuaries, that: (i) The variation is a result of deductible leverage, benefit design, claims cost trend for the plan, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than eight percentage points are subject to review by the commissioner, and must be approved or denied within thirty days of submittal. A variation that is not denied within ((sixty)) thirty days shall be deemed approved. The commissioner must provide to the carrier a detailed actuarial justification for any denial ((within thirty days)) at the time of the denial.

        (((4))) (5) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

        (((5))) (6)(a) Except as provided in this subsection, requirements used by an insurer in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

        (b) An insurer shall not require a minimum participation level greater than:

        (i) One hundred percent of eligible employees working for groups with three or less employees; and

        (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

        (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

        (d) An insurer may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

        (((6))) (7) An insurer must offer coverage to all eligible employees of a small employer and their dependents. An insurer may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. An insurer may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

        (((7))) (8) As used in this section, "health benefit plan," "small employer," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.


        Sec. 14. RCW 48.44.023 and 2004 c 244 s 7 are each amended to read as follows:

        (1)(((a))) A health care services contractor offering any health benefit plan to a small employer, either directly or through an association or member-governed group formed specifically for the purpose of purchasing health care, may offer and actively market to the small employer ((a)) no more than one health benefit plan featuring a limited schedule of covered health care services. ((Nothing in this subsection shall preclude a contractor from offering, or a small employer from purchasing, other health benefit plans that may have more comprehensive benefits than those included in the product offered under this subsection. A contractor offering a health benefit plan under this subsection shall clearly disclose all covered benefits to the small employer in a brochure filed with the commissioner.

        (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460.

        (2))) (a) The plan offered under this subsection may be offered with a choice of cost-sharing arrangements, and may, but is not required to, comply with: RCW 48.44.210, 48.44.212, 48.44.225, 48.44.240 through 48.44.245, 48.44.290 through 48.44.340, 48.44.344, 48.44.360 through 48.44.380, 48.44.400, 48.44.420, 48.44.440 through 48.44.460, 48.44.500, 48.43.045(1) except as required in (b) of this subsection, 48.43.093, 48.43.115 through 48.43.185, 48.43.515(5), or 48.42.100.

        (b) In offering the plan under this subsection, the health care service contractor must offer the small employer the option of permitting every category of health care provider to provide health services or care for conditions covered by the plan pursuant to RCW 48.43.045(1).


        (2) A health care service contractor offering the plan under subsection (1) of this section must also offer and actively market to the small employer at least one additional health benefit plan.

        (3) Nothing in this section shall prohibit a health care service contractor from offering, or a purchaser from seeking, health benefit plans with benefits in excess of the health benefit plan offered under subsection (1) of this section. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

        (((3))) (4) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

        (a) The contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

        (i) Geographic area;

        (ii) Family size;

        (iii) Age; and

        (iv) Wellness activities.

        (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

        (c) The contractor shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (((3))) (4).

        (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

        (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.

        (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

        (i) Changes to the enrollment of the small employer;

        (ii) Changes to the family composition of the employee;

        (iii) Changes to the health benefit plan requested by the small employer; or

        (iv) Changes in government requirements affecting the health benefit plan.

        (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

        (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. A carrier may develop its rates based on claims costs ((due to network provider reimbursement schedules or type of network)) for a plan. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

        (i) Except for small group health benefit plans that qualify as insurance coverage combined with a health savings account as defined by the United States internal revenue service, adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage. However, annual rate adjustments for each small group health benefit plan may vary by up to plus or minus ((four)) eight percentage points from the overall adjustment of a carrier's entire small group pool((, such overall adjustment to be approved by the commissioner, upon a showing by the carrier, certified by a member of the American academy of actuaries that: (i) The variation is a result of deductible leverage, benefit design, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than four percentage points are subject to review by the commissioner, and must be approved or denied within sixty days of submittal)) if certified by a member of the American academy of actuaries, that: (i) The variation is a result of deductible leverage, benefit design, claims cost trend for the plan, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than eight percentage points are subject to review by the commissioner, and must be approved or denied within thirty days of submittal. A variation that is not denied within ((sixty)) thirty days shall be deemed approved. The commissioner must provide to the carrier a detailed actuarial justification for any denial ((within thirty days)) at the time of the denial.

        (((4))) (5) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

        (((5))) (6)(a) Except as provided in this subsection, requirements used by a contractor in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

        (b) A contractor shall not require a minimum participation level greater than:

        (i) One hundred percent of eligible employees working for groups with three or less employees; and

        (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

        (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

        (d) A contractor may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

        (((6))) (7) A contractor must offer coverage to all eligible employees of a small employer and their dependents. A contractor may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. A contractor may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.


        Sec. 15. RCW 48.46.066 and 2004 c 244 s 9 are each amended to read as follows:

        (1)(((a))) A health maintenance organization offering any health benefit plan to a small employer, either directly or through an association or member-governed group formed specifically for the purpose of purchasing health care, may offer and actively market to the small employer ((a)) no more than one health benefit plan featuring a limited schedule of covered health care services. ((Nothing in this subsection shall preclude a health maintenance organization from offering, or a small employer from purchasing, other health benefit plans that may have more comprehensive benefits than those included in the product offered under this subsection. A health maintenance organization offering a health benefit plan under this subsection shall clearly disclose all the covered benefits to the small employer in a brochure filed with the commissioner.

        (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530.

        (2))) (a) The plan offered under this subsection may be offered with a choice of cost-sharing arrangements, and may, but is not required to, comply with: RCW 48.46.250, 48.46.272 through 48.46.290, 48.46.320, 48.46.350, 48.46.375, 48.46.440 through 48.46.460, 48.46.480, 48.46.490, 48.46.510, 48.46.520, 48.46.530, 48.46.565, 48.46.570, 48.46.575, 48.43.045(1) except as required in (b) of this subsection, 48.43.093, 48.43.115 through 48.43.185, 48.43.515(5), or 48.42.100.

        (b) In offering the plan under this subsection, the health maintenance organization must offer the small employer the option of permitting every category of health care provider to provide health services or care for conditions covered by the plan pursuant to RCW 48.43.045(1).

        (2) A health maintenance organization offering the plan under subsection (1) of this section must also offer and actively market to the small employer at least one additional health benefit plan.

        (3) Nothing in this section shall prohibit a health maintenance organization from offering, or a purchaser from seeking, health benefit plans with benefits in excess of the health benefit plan offered under subsection (1) of this section. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

        (((3))) (4) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

        (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

        (i) Geographic area;

        (ii) Family size;

        (iii) Age; and

        (iv) Wellness activities.

        (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

        (c) The health maintenance organization shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (((3))) (4).

        (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

        (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.

        (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

        (i) Changes to the enrollment of the small employer;

        (ii) Changes to the family composition of the employee;

        (iii) Changes to the health benefit plan requested by the small employer; or

        (iv) Changes in government requirements affecting the health benefit plan.

        (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

        (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. A carrier may develop its rates based on claims costs ((due to network provider reimbursement schedules or type of network)) for a plan. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

        (i) Except for small group health benefit plans that qualify as insurance coverage combined with a health savings account as defined by the United States internal revenue service, adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage. However, annual rate adjustments for each small group health benefit plan may vary by up to plus or minus ((four)) eight percentage points from the overall adjustment of a carrier's entire small group pool((, such overall adjustment to be approved by the commissioner, upon a showing by the carrier, certified by a member of the American academy of actuaries that: (i) The variation is a result of deductible leverage, benefit design, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than four percentage points are subject to review by the commissioner, and must be approved or denied within sixty days of submittal)) if certified by a member of the American academy of actuaries, that: (i) The variation is a result of deductible leverage, benefit design, claims cost trend for the plan, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the health maintenance organization's small group pool. Variations of greater than eight percentage points are subject to review by the commissioner, and must be approved or denied within thirty days of submittal. A variation that is not denied within ((sixty)) thirty days shall be deemed approved. The commissioner must provide to the carrier a detailed actuarial justification for any denial ((within thirty days)) at the time of the denial.

        (((4))) (5) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

        (((5))) (6)(a) Except as provided in this subsection, requirements used by a health maintenance organization in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.


        (b) A health maintenance organization shall not require a minimum participation level greater than:

        (i) One hundred percent of eligible employees working for groups with three or less employees; and

        (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

        (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

        (d) A health maintenance organization may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

        (((6))) (7) A health maintenance organization must offer coverage to all eligible employees of a small employer and their dependents. A health maintenance organization may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. A health maintenance organization may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.


        NEW SECTION. Sec. 16. Captions used in this act are not part of the law.


        NEW SECTION. Sec. 17. Sections 1 through 5, 7 through 11, and 16 of this act constitute a new chapter in Title 70 RCW.


        NEW SECTION. Sec. 18. Section 6 of this act takes effect July 1, 2006."


        On page 1, line 2 of the title, after "program;" strike the remainder of the title and insert "amending RCW 48.21.045, 48.44.023, and 48.46.066; adding a new section to chapter 82.04 RCW; adding a new chapter to Title 70 RCW; creating a new section; and providing an effective date."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


       Representative Hinkle moved the House concur in the Senate amendment to ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2572 and advance the bill as amended by the Senate to final passage.


POINT OF ORDER


       Representative Hunt requested a scope and object ruling on the Senate amendment to Engrossed Second Substitute House Bill No. 2572.


SPEAKER'S RULING


       The Speaker (Representative Lovick presiding): "ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2572 is an acting relating to "establishment of the small employer health insurance partnership program." The bill as it passed the House created a new chapter in Title 70 RCW and established a premium assistance program for small businesses through the Health Care Authority. The premium assistance program was limited to subsidies to low-wage employees of small employers who pay for at least 40% of health care benefit plan coverage. The bill did not make any changes to the insurance code in Title 48 or the tax code in Title 82.

       The Senate amendment makes various changes to the House bill.

       The part of the Senate amendment originally numbered 296 changes insurance regulations for carriers participating in the small group market and amends the insurance code in Title 48.

       The part of the Senate amendment originally numbered 297 provides a business and occupation tax credit for small employers providing health care coverage and amends the tax code in Title 82.

       These provisions in the Senate amendment are unrelated to the establishment of a premium assistance program for small businesses through the Health Care Authority as specified in the bill that passed the House and are therefore beyond the scope and object of the House bill.

       Representative Hunt, your point of order is well taken."


{{43180}}       Representative Cody moved that the House refuse to concur in the Senate amendment to ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2572 and ask the Senate to recede therefrom.


       Representatives Cody, Simpson, Clibborn and Morrell spoke in favor of adoption of the motion.


       Representatives Curtis, Armstrong, Hinkle, Condotta, Bailey, Shabro, Ahern, Anderson, Ericksen, Buck, Nixon, Sump, Orcutt, McDonald, Buri, Roach, Dunn, Walsh and DeBolt spoke against the adoption of the motion.


{{43181}}       An electronic roll call vote was requested and the request was granted.


       The Speaker (Representative Lovick presiding) stated the question before the House to be adoption of the motion not to concur in the Senate amendment to Engrossed Second Substitute House Bill No. 2572.


ROLL CALL


       The Clerk called the roll on the adoption of the motion not to concur in the Senate amendment to Engrossed Second Substitute House Bill No. 2572, and the amendment was adopted by the following vote: Yeas - 56, Nays - 42, Excused - 0.

       Voting yea: Representatives Appleton, Blake, Campbell, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Green, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kilmer, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Wallace, Williams, Wood and Mr. Speaker - 56.

       Voting nay: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kretz, Kristiansen, McCune, McDonald, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Walsh and Woods - 42.


MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


       The Senate refuses to concur in the House amendment to ENGROSSED SENATE BILL NO. 5330 and asks the House to recede therefrom.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


       There being no objection, the House insisted on its position in its amendments to ENGROSSED SENATE BILL NO. 5330 and asked the Senate to concur therein.


{{43184}}                   MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:

       The Senate refuses to concur in the House amendments to SUBSTITUTE SENATE BILL NO. 6330 and asks the House to recede therefrom.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


       There being no objection, the House insisted on its position in its amendments to SUBSTITUTE SENATE BILL NO. 6330 and asked the Senate to concur therein.


MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:

       The Senate refuses to concur in the House amendments to SENATE BILL NO. 6680 and asks the House to recede therefrom.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


       There being no objection, the House insisted on its position in its amendments to SENATE BILL NO. 6680 and asked the Senate to concur therein.


{{43186}}                   MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate refuses to concur in the House amendment to ENGROSSED SUBSTITUTE SENATE BILL NO. 5305 and asks the House to recede therefrom, and the same is herewith transmitted.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


       There being no objection, the rules were suspended and ENGROSSED SUBSTITUTE SENATE BILL NO. 5305 was returned to second reading for purpose of amendment.


{{43187}}SECOND READING


{{43188}}       ENGROSSED SUBSTITUTE SENATE BILL NO. 5305, By Senate Committee on Health & Long-Term Care (originally sponsored by Senators Rasmussen, Benton, Roach, Swecker, Zarelli, Regala, Stevens, Shin, Delvin, Franklin and Mulliken)


       Prohibiting vaccinating pregnant women and children with mercury-containing vaccines.


{{43189}}       Representative Cody moved the adoption of amendment (1142):


        Strike everything after the enacting clause and insert the following:

        "NEW SECTION. Sec. 1. The legislature finds that vaccinations and immunizations are among the most important public health innovations of the last one hundred years. The centers for disease control and prevention placed vaccinations at the top of its list of the ten greatest public health achievements of the twentieth century. In its efforts to improve public health in the world's poorest countries, the Bill and Melinda Gates foundation has identified childhood immunization as a cost-effective method of improving public health and saving the lives of millions of children around the world.

        Fortunately, in Washington, safe and cost-effective vaccinations against childhood diseases are widely available through both public and private resources. The vaccines that the Washington state department of health provides to meet the requirements for the recommended childhood vaccination schedule through its universal childhood vaccine program are screened for thimerosal and preference is given toward the purchase of thimerosal-free products. The department of health currently provides thimerosal-free products for all routinely recommended childhood vaccines. Regardless of the absence of thimerosal in childhood vaccines in Washington, scientifically reputable organizations such as the centers for disease control and prevention, the national institute of medicine, the American academy of pediatrics, the food and drug administration, and the world health organization have all determined that there is no credible evidence that the use of thimerosal in vaccines poses a threat to the health and safety of children.

        Notwithstanding these assurances of the safety of the vaccine supply, the legislature finds that where there is public concern over the safety of vaccines, vaccination rates may be reduced to the point that deadly, vaccine-preventable, childhood diseases return. This measure is being enacted to maintain public confidence in vaccine programs, so that the public will continue to seek vaccinations and their health benefits may continue to protect the people of Washington.


        NEW SECTION. Sec. 2. A new section is added to chapter 70.95M RCW to read as follows:

        (1) Beginning July 1, 2007, a person who is known to be pregnant or who is under three years of age shall not be vaccinated with a mercury-containing vaccine or injected with a mercury-containing product that contains more than 0.5 micrograms of mercury per 0.5 milliliter dose.

        (2) Notwithstanding subsection (1) of this section, an influenza vaccine may contain up to 1.0 micrograms of mercury per 0.5 milliliter dose.

(3) The secretary of the department of health may, upon declaration of a public health emergency, suspend the requirements of this section for the duration of the emergency.

        (4) All vaccines and products referenced under this section must meet food and drug administration licensing requirements."


       Representatives Cody and Hinkle spoke in favor of the adoption of the amendment.


       The amendment was adopted.


{{43190}}       There being no objection, the rules were suspended, the second reading considered the third and the bill, as amended by the House, was placed on final passage.


       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Engrossed Substitute Senate Bill No. 5305, as amended by the House.


ROLL CALL


       The Clerk called the roll on the final passage of Engrossed Substitute Senate Bill No. 5305, as amended by the House, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.


       ENGROSSED SUBSTITUTE SENATE BILL NO. 5305, as amended by the House, having received the necessary constitutional majority, was declared passed.


{{43191}}                   MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate refuses to concur in the House amendment to SUBSTITUTE SENATE BILL NO. 6257 and asks the House to recede therefrom, and the same is herewith transmitted.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL



       There being no objection, the rules were suspended and SUBSTITUTE SENATE BILL NO. 6257 was returned to second reading for purpose of amendment.


SECOND READING


{{43193}}       SUBSTITUTE SENATE BILL NO. 6257, By Senate Committee on Labor, Commerce, Research & Development (originally sponsored by Senator Delvin)


       Exempting guest services or crowd management employees from the requirements of chapter 18.170 RCW.



{{43194}}       Representative Hudgins moved the adoption of amendment (1161):


        Strike everything after the enacting clause and insert the following:


        "Sec. 1. RCW 18.170.020 and 1991 c 334 s 2 are each amended to read as follows:

        The requirements of this chapter do not apply to:

        (1) A person who is employed exclusively or regularly by one employer and performs the functions of a private security guard solely in connection with the affairs of that employer, if the employer is not a private security company;

        (2) A sworn peace officer while engaged in the performance of the officer's official duties; ((or))

        (3) A sworn peace officer while employed by any person to engage in off-duty employment as a private security guard, but only if the employment is approved by the chief law enforcement officer of the jurisdiction where the employment takes place and the sworn peace officer does not employ, contract with, or broker for profit other persons to assist him or her in performing the duties related to his or her private employer; or

        (4) Guest services or crowd management employees who do not perform the duties of a private security guard."


        Correct the title.


       Representative Hudgins spoke in favor of the adoption of the amendment.


       The amendment was adopted.


{{43195}}       There being no objection, the rules were suspended, the second reading considered the third and the bill, as amended by the House, was placed on final passage.


       Representatives Hudgins and Condotta spoke in favor of passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Substitute Senate Bill No. 6257, as amended by the House.


ROLL CALL


       The Clerk called the roll on the final passage of Substitute Senate Bill No. 6257, as amended by the House, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.


       SUBSTITUTE SENATE BILL NO. 6257, as amended by the House, having received the necessary constitutional majority, was declared passed.


{{43196}}                   MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


       The Senate refuses to concur in the House amendment to SUBSTITUTE SENATE BILL NO. 6362 and asks the House to recede therefrom, and the same is herewith transmitted.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


       There being no objection, the rules were suspended and SUBSTITUTE SENATE BILL NO. 6362 was returned to second reading for purpose of amendment.


{{43197}}                              SECOND READING


{{43198}}       SUBSTITUTE SENATE BILL NO. 6362, By Senate Committee on Government Operations & Elections (originally sponsored by Senators Kohl-Welles, Keiser, Jacobsen and Kline)


       Modifying voter registration provisions.


{{43199}}       Representative Nixon moved the adoption of amendment (1165):


        Strike everything after the enacting clause and insert the following:



        "Sec. 1. RCW 18.170.020 and 1991 c 334 s 2 are each amended to read as follows:

        The requirements of this chapter do not apply to:

        (1) A person who is employed exclusively or regularly by one employer and performs the functions of a private security guard solely in connection with the affairs of that employer, if the employer is not a private security company;

        (2) A sworn peace officer while engaged in the performance of the officer's official duties; ((or))

        (3) A sworn peace officer while employed by any person to engage in off-duty employment as a private security guard, but only if the employment is approved by the chief law enforcement officer of the jurisdiction where the employment takes place and the sworn peace officer does not employ, contract with, or broker for profit other persons to assist him or her in performing the duties related to his or her private employer; or

        (4) Guest services or crowd management employees who do not perform the duties of a private security guard."


        Correct the title.


       Representatives Nixon and Haigh spoke in favor of the adoption of the amendment.


       The amendment was adopted.


{{43200}}       There being no objection, the rules were suspended, the second reading considered the third and the bill, as amended by the House, was placed on final passage.


       Representatives Nixon and Haigh spoke in favor of passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Substitute Senate Bill No. 6362, as amended by the House.


ROLL CALL


       The Clerk called the roll on the final passage of Substitute Senate Bill No. 6362, as amended by the House, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.


       SUBSTITUTE SENATE BILL NO. 6362, as amended by the House, having received the necessary constitutional majority, was declared passed.


{{43201}}                   MESSAGE FROM THE SENATE

March 6, 2006

Mr. Speaker:


       The Senate refuses to concur in the House amendment to SUBSTITUTE SENATE BILL NO. 6144 and asks the House to recede therefrom, and the same is herewith transmitted.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


       There being no objection, the House receded from its amendment to SUBSTITUTE SENATE BILL NO. 6144 and passed the bill to final passage without the House amendment.


       The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 6144 without the House amendment.


ROLL CALL


       The Clerk called the roll on the final passage of Substitute Senate Bill No. 6144, without the House amendment and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.

  

       SUBSTITUTE SENATE BILL NO. 6144, without the House amendment, having received the constitutional majority, was declared passed.


{{43203}}                   MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:



       The Senate receded from the amendment by Committee on Ways & Means to SUBSTITUTE HOUSE BILL NO. 2416. Under suspension of the rules the bill was returned to second reading for purpose of amendment. The Senate passed the bill with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "Sec. 1. RCW 79A.05.070 and 2003 c 186 s 1 are each amended to read as follows:

        The commission may:

        (1) Make rules and regulations for the proper administration of its duties;

        (2) Accept any grants of funds made with or without a matching requirement by the United States, or any agency thereof, for purposes in keeping with the purposes of this chapter; accept gifts, bequests, devises and endowments for purposes in keeping with such purposes; enter into cooperative agreements with and provide for private nonprofit groups to use state park property and facilities to raise money to contribute gifts, grants, and support to the commission for the purposes of this chapter. The commission may assist the nonprofit group in a cooperative effort by providing necessary agency personnel and services, if available. However, none of the moneys raised may inure to the benefit of the nonprofit group, except in furtherance of its purposes to benefit the commission as provided in this chapter. The agency and the private nonprofit group shall agree on the nature of any project to be supported by such gift or grant prior to the use of any agency property or facilities for raising money. Any such gifts may be in the form of recreational facilities developed or built in part or in whole for public use on agency property, provided that the facility is consistent with the purposes of the agency;

        (3) Require certification by the commission of all parks and recreation workers employed in state aided or state controlled programs;

        (4) Act jointly, when advisable, with the United States, any other state agencies, institutions, departments, boards, or commissions in order to carry out the objectives and responsibilities of this chapter;

        (5) Grant franchises and easements for any legitimate purpose on parks or parkways, for such terms and subject to such conditions and considerations as the commission shall specify;

        (6) Charge such fees for services, utilities, and use of facilities as the commission shall deem proper. The commission may not charge fees for general park access or parking;

        (7) Enter into agreements whereby individuals or companies may rent undeveloped parks or parkway land for grazing, agricultural, or mineral development purposes upon such terms and conditions as the commission shall deem proper, for a term not to exceed forty years;

        (8) Determine the qualifications of and employ a director of parks and recreation who shall receive a salary as fixed by the governor in accordance with the provisions of RCW 43.03.040 and determine the qualifications and salary of and employ such other persons as may be needed to carry out the provisions hereof; and

        (9) Without being limited to the powers hereinbefore enumerated, the commission shall have such other powers as in the judgment of a majority of its members are deemed necessary to effectuate the purposes of this chapter: PROVIDED, That the commission shall not have power to supervise directly any local park or recreation district, and no funds shall be made available for such purpose.


        NEW SECTION. Sec. 2. 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 April 9, 2006."


        On page 1, line 1 of the title, after "fees;" strike the remainder of the title and insert "amending RCW 79A.05.070; providing an effective date; and declaring an emergency."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


       There being no objection, the House concurred in the Senate amendment to SUBSTITUTE HOUSE BILL NO. 2416 and advanced the bill as amended by the Senate to final passage.


{{43204}}                FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


       Representatives B. Sullivan and Buck spoke in favor the passage of the bill.


       The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Substitute House Bill No. 2416, as amended by the Senate.


{{43205}}                                    ROLL CALL


       The Clerk called the roll on the final passage of Substitute House Bill No. 2416, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 96, Nays - 2, Excused - 0.

       Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 96.

       Voting nay: Representatives Hudgins and Murray - 2.

  


       SUBSTITUTE HOUSE BILL NO. 2416, as amended by the Senate, having received the constitutional majority, was declared passed.


{{43206}}                   MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


       The Senate receded from its amendment to ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 3098. Under suspension of the rules the bill was returned to second reading for purpose of amendment. The Senate passed the bill with the following amendment:


        Strike everything after the enacting clause and insert the following:


        "NEW SECTION. Sec. 1. In 2005, the legislature reconstituted the state board of education to refocus its purpose; abolished the academic achievement and accountability commission; and assigned policy and rule-making authority for educator preparation and certification to the professional educator standards board. The purpose of this act is to address the remaining statutory responsibilities of the state board of education held before 2005. The legislature finds that some duties should be retained with the reconstituted board; many duties should be transferred to other agencies or organizations, primarily but not exclusively to the superintendent of public instruction; and some duties should be repealed. This act also corrects statutes to implement fully the transfer of responsibilities authorized in 2005.


PART 1

NEW STATE BOARD OF EDUCATION


        NEW SECTION. Sec. 101. The legislature encourages the members of the new state board of education to review the transfer of duties from the state board to other entities made in this act and if any of the duties that were transferred away from the state board are necessary for the board to accomplish the purpose set out in this act then the state board shall come back to the legislature to request those necessary duties to be returned to the state board of education. The state board of education is encouraged to make such a request by January 15, 2007.


        Sec. 102. RCW 28A.305.130 and 2005 c 497 s 104 are each amended to read as follows:

        The purpose of the state board of education is to ((adopt statewide policies that promote achievement of the goals of RCW 28A.150.210; implement a standards-based accountability system; and provide leadership in the creation of an education system that respects the diverse cultures, abilities, and learning styles of all students)) provide advocacy and strategic oversight of public education; implement a standards-based accountability system to improve student academic achievement; provide leadership in the creation of a system that personalizes education for each student and respects diverse cultures, abilities, and learning styles; and promote achievement of the goals of RCW 28A.150.210. In addition to any other powers and duties as provided by law, the state board of education shall:

        (1) ((Until January 1, 2006, approve or disapprove the program of courses leading to teacher, school administrator, and school specialized personnel certification offered by all institutions of higher education within the state which may be accredited and whose graduates may become entitled to receive such certification.

        (2) Until January 1, 2006, conduct every five years a review of the program approval standards, including the minimum standards for teachers, administrators, and educational staff associates, to reflect research findings and assure continued improvement of preparation programs for teachers, administrators, and educational staff associates.

        (3) Until January 1, 2006, investigate the character of the work required to be performed as a condition of entrance to and graduation from any institution of higher education in this state relative to such certification as provided for in subsection (1) of this section, and prepare a list of accredited institutions of higher education of this and other states whose graduates may be awarded such certificates.

        (4) Until January 1, 2006:

        (a) Adopt rules to allow a teacher certification candidate to fulfill, in part, teacher preparation program requirements through work experience as a classified teacher's aide in a public school or private school meeting the requirements of RCW 28A.195.010. The rules shall include, but are not limited to, limitations based upon the recency of the teacher preparation candidate's teacher aide work experience, and limitations based on the amount of work experience that may apply toward teacher preparation program requirements under this chapter; and

        (b) Require that at the time of the individual's enrollment in a teacher preparation program, the supervising teacher and the building principal shall jointly provide to the teacher preparation program of the higher education institution at which the teacher candidate is enrolled, a written assessment of the performance of the teacher candidate. The assessment shall contain such information as determined by the state board of education and shall include: Evidence that at least fifty percent of the candidate's work as a classified teacher's aide was involved in instructional activities with children under the supervision of a certificated teacher and that the candidate worked a minimum of six hundred thirty hours for one school year; the type of work performed by the candidate; and a recommendation of whether the candidate's work experience as a classified teacher's aide should was substituted for teacher preparation program requirements. In compliance with such rules as may be established by the state board of education under this section, the teacher preparation programs of the higher education institution where the candidate is enrolled shall make the final determination as to what teacher preparation program requirements may be fulfilled by teacher aide work experience.

        (5) Until January 1, 2006, supervise the issuance of such certificates as provided for in subsection (1) of this section and specify the types and kinds of certificates necessary for the several departments of the common schools by rule or regulation in accordance with RCW 28A.410.010.

        (6))) Hold regularly scheduled meetings at such time and place within the state as the board shall determine and may hold such special meetings as may be deemed necessary for the transaction of public business((.));

        (((7))) (2) Form committees as necessary to effectively and efficiently conduct the work of the board((.));

        (((8))) (3) Seek advice from the public and interested parties regarding the work of the board((.));

        (((9))) (4) For purposes of statewide accountability((, the board shall)):


        (a) Adopt and revise performance improvement goals in reading, writing, science, and mathematics, by subject and grade level, once assessments in these subjects are required statewide; academic and technical skills, as appropriate, in secondary career and technical education programs; and student attendance, as the board deems appropriate to improve student learning. The goals shall be consistent with student privacy protection provisions of RCW 28A.655.090(7) and shall not conflict with requirements contained in Title I of the federal elementary and secondary education act of 1965, or the requirements of the Carl D. Perkins vocational education act of 1998, each as amended. The goals may be established for all students, economically disadvantaged students, limited English proficient students, students with disabilities, and students from disproportionately academically underachieving racial and ethnic backgrounds. The board may establish school and school district goals addressing high school graduation rates and dropout reduction goals for students in grades seven through twelve. The board shall adopt the goals by rule. However, before each goal is implemented, the board shall present the goal to the education committees of the house of representatives and the senate for the committees' review and comment in a time frame that will permit the legislature to take statutory action on the goal if such action is deemed warranted by the legislature;

        (b) Identify the scores students must achieve in order to meet the standard on the Washington assessment of student learning and, for high school students, to obtain a certificate of academic achievement. The board shall also determine student scores that identify levels of student performance below and beyond the standard. The board shall consider the incorporation of the standard error of measurement into the decision regarding the award of the certificates. The board shall set such performance standards and levels in consultation with the superintendent of public instruction and after consideration of any recommendations that may be developed by any advisory committees that may be established for this purpose. The initial performance standards and any changes recommended by the board in the performance standards for the tenth grade assessment shall be presented to the education committees of the house of representatives and the senate by November 30th of the school year in which the changes will take place to permit the legislature to take statutory action before the changes are implemented if such action is deemed warranted by the legislature. The legislature shall be advised of the initial performance standards and any changes made to the elementary level performance standards and the middle school level performance standards;

        (c) Adopt objective, systematic criteria to identify successful schools and school districts and recommend to the superintendent of public instruction schools and districts to be recognized for two types of accomplishments, student achievement and improvements in student achievement. Recognition for improvements in student achievement shall include consideration of one or more of the following accomplishments:

        (i) An increase in the percent of students meeting standards. The level of achievement required for recognition may be based on the achievement goals established by the legislature and by the board under (a) of this subsection;

        (ii) Positive progress on an improvement index that measures improvement in all levels of the assessment; and

        (iii) Improvements despite challenges such as high levels of mobility, poverty, English as a second language learners, and large numbers of students in special populations as measured by either the percent of students meeting the standard, or the improvement index. When determining the baseline year or years for recognizing individual schools, the board may use the assessment results from the initial years the assessments were administered, if doing so with individual schools would be appropriate;

        (d) Adopt objective, systematic criteria to identify schools and school districts in need of assistance and those in which significant numbers of students persistently fail to meet state standards. In its deliberations, the board shall consider the use of all statewide mandated criterion-referenced and norm-referenced standardized tests;

        (e) Identify schools and school districts in which state intervention measures will be needed and a range of appropriate intervention strategies after the legislature has authorized a set of intervention strategies. After the legislature has authorized a set of intervention strategies, at the request of the board, the superintendent shall intervene in the school or school district and take corrective actions. This chapter does not provide additional authority for the board or the superintendent of public instruction to intervene in a school or school district;

        (f) Identify performance incentive systems that have improved or have the potential to improve student achievement;

        (g) Annually review the assessment reporting system to ensure fairness, accuracy, timeliness, and equity of opportunity, especially with regard to schools with special circumstances and unique populations of students, and a recommendation to the superintendent of public instruction of any improvements needed to the system; and

        (h) Include in the biennial report required under RCW 28A.305.035, information on the progress that has been made in achieving goals adopted by the board((.));

        (((10))) (5) Accredit, subject to such accreditation standards and procedures as may be established by the state board of education, all private schools that apply for accreditation, and approve, subject to the provisions of RCW 28A.195.010, private schools carrying out a program for any or all of the grades kindergarten through twelve: PROVIDED, That no private school may be approved that operates a kindergarten program only: PROVIDED FURTHER, That no ((public or)) private schools shall be placed upon the list of accredited schools so long as secret societies are knowingly allowed to exist among its students by school officials((: PROVIDED FURTHER, That the state board may elect to require all or certain classifications of the public schools to conduct and participate in such preaccreditation examination and evaluation processes as may now or hereafter be established by the board.

        (11) Make rules and regulations governing the establishment in any existing nonhigh school district of any secondary program or any new grades in grades nine through twelve. Before any such program or any new grades are established the district must obtain prior approval of the state board.

        (12) Prepare such outline of study for the common schools as the board shall deem necessary, and in conformance with legislative requirements, and prescribe such rules for the general government of the common schools, as shall seek to secure regularity of attendance, prevent truancy, secure efficiency, and promote the true interest of the common schools.

        (13) Continuously reevaluate courses and other requirements and adopt and enforce regulations within the common schools so as to meet the educational needs of students.

        (14) Evaluate course of study requirements and));

        (6) Articulate with the institutions of higher education, work force representatives, and early learning policymakers and providers to coordinate and unify the work of the public school system((.));

        (((15) Carry out board powers and duties relating to the organization and reorganization of school districts.


        (16) Hear and decide appeals as otherwise provided by law.

        (17) Promulgate information and rules dealing with the prevention of child abuse for purposes of curriculum use in the common schools.

        (18))) (7) Hire an executive director and an administrative assistant to reside in the office of the superintendent of public instruction for administrative purposes. Any other personnel of the board shall be appointed as provided by RCW 28A.300.020. The executive director, administrative assistant, and all but one of the other personnel of the board are exempt from civil service, together with other staff as now or hereafter designated as exempt in accordance with chapter 41.06 RCW((.)); and

        (((19))) (8) Adopt a seal that shall be kept in the office of the superintendent of public instruction.


        Sec. 103. RCW 28A.305.035 and 2005 c 497 s 103 are each amended to read as follows:

(1) By October 15th of each even-numbered year, the state board of education and the professional educator standards board shall submit a joint report to the legislative education committees, the governor, and the superintendent of public instruction. The report shall address the progress the boards have made and the obstacles they have encountered, individually and collectively, in the work of achieving the goals in RCW 28A.150.210.

(2) The state board of education shall include the chairs and ranking minority members of the legislative education committees in board communications so that the legislature can be kept apprised of the discussions and proposed actions of the board.


        Sec. 104. RCW 28A.300.040 and 2005 c 360 s 6 are each amended to read as follows:

        In addition to any other powers and duties as provided by law, the powers and duties of the superintendent of public instruction shall be:

        (1) To have supervision over all matters pertaining to the public schools of the state;

        (2) To report to the governor and the legislature such information and data as may be required for the management and improvement of the schools;

        (3) To prepare and have printed such forms, registers, courses of study, rules for the government of the common schools, and such other material and books as may be necessary for the discharge of the duties of teachers and officials charged with the administration of the laws relating to the common schools, and to distribute the same to educational service district superintendents;

        (4) To travel, without neglecting his or her other official duties as superintendent of public instruction, for the purpose of attending educational meetings or conventions, of visiting schools, and of consulting educational service district superintendents or other school officials;

        (5) To prepare and from time to time to revise a manual of the Washington state common school code, copies of which shall be provided in such numbers as determined by the superintendent of public instruction at no cost to those public agencies within the common school system and which shall be sold at approximate actual cost of publication and distribution per volume to all other public and nonpublic agencies or individuals, said manual to contain Titles 28A and 28C RCW, rules related to the common schools, and such other matter as the state superintendent or the state board of education shall determine. Proceeds of the sale of such code shall be transmitted to the public printer who shall credit the state superintendent's account within the state printing plant revolving fund by a like amount;

        (6) ((To act as ex officio member and the chief executive officer of the state board of education;

        (7))) To file all papers, reports and public documents transmitted to the superintendent by the school officials of the several counties or districts of the state, each year separately. Copies of all papers filed in the superintendent's office, and the superintendent's official acts, may, or upon request, shall be certified by the superintendent and attested by the superintendent's official seal, and when so certified shall be evidence of the papers or acts so certified to;

        (((8))) (7) To require annually, on or before the 15th day of August, of the president, manager, or principal of every educational institution in this state, a report as required by the superintendent of public instruction; and it is the duty of every president, manager, or principal, to complete and return such forms within such time as the superintendent of public instruction shall direct;

        (((9))) (8) To keep in the superintendent's office a record of all teachers receiving certificates to teach in the common schools of this state;

        (((10))) (9) To issue certificates as provided by law;

        (((11))) (10) To keep in the superintendent's office at the capital of the state, all books and papers pertaining to the business of the superintendent's office, and to keep and preserve in the superintendent's office a complete record of statistics, as well as a record of the meetings of the state board of education;

        (((12))) (11) With the assistance of the office of the attorney general, to decide all points of law which may be submitted to the superintendent in writing by any educational service district superintendent, or that may be submitted to the superintendent by any other person, upon appeal from the decision of any educational service district superintendent; and the superintendent shall publish his or her rulings and decisions from time to time for the information of school officials and teachers; and the superintendent's decision shall be final unless set aside by a court of competent jurisdiction;

        (((13))) (12) To administer oaths and affirmations in the discharge of the superintendent's official duties;

        (((14))) (13) To deliver to his or her successor, at the expiration of the superintendent's term of office, all records, books, maps, documents and papers of whatever kind belonging to the superintendent's office or which may have been received by the superintendent's for the use of the superintendent's office;

        (((15))) (14) To administer family services and programs to promote the state's policy as provided in RCW 74.14A.025;

        (((16))) (15) To promote the adoption of school-based curricula and policies that provide quality, daily physical education for all students, and to encourage policies that provide all students with opportunities for physical activity outside of formal physical education classes;

        (((17))) (16) To perform such other duties as may be required by law.


        Sec. 105. RCW 28A.305.011 and 2005 c 497 s 101 are each amended to read as follows:

        (1) The membership of the state board of education shall be composed of sixteen members who are residents of the state of Washington:

        (a) Seven shall be members representing the educational system, as follows:

        (i) Five members elected by school district directors. Three of the members elected by school district directors shall be residents of western Washington and two members shall be residents of eastern Washington;


        (ii) One member elected at-large by the members of the boards of directors of all private schools in the state meeting the requirements of RCW 28A.195.010; and

        (iii) The superintendent of public instruction;

        (b) Seven members appointed by the governor; and

        (c) Two students selected in a manner determined by the state board of education.

        (2) Initial appointments shall be for terms from one to four years in length, with the terms expiring on the second Monday of January of the applicable year. As the terms of the first appointees expire or vacancies on the board occur, the governor shall appoint or reappoint members of the board to complete the initial terms or to four-year terms, as appropriate.

        (a) Appointees of the governor must be individuals who have demonstrated interest in public schools and are supportive of educational improvement, have a positive record of service, and who will devote sufficient time to the responsibilities of the board.

        (b) In appointing board members, the governor shall consider the diversity of the population of the state.

        (c) All appointments to the board made by the governor are subject to confirmation by the senate.

        (d) No person may serve as a member of the board, except the superintendent of public instruction, for more than two consecutive full four-year terms.

        (3) The governor may remove an appointed member of the board for neglect of duty, misconduct, malfeasance, or misfeasance in office, or for incompetent 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.

        (4)(a) The chair of the board shall be elected by a majority vote of the members of the board. The chair of the board shall serve a term of two years, and may be reelected to an additional term. A member of the board may not serve as chair for more than two consecutive terms.

        (b) Eight voting members of the board constitute a quorum for the transaction of business.

        (c) All members except the student members are voting members.

        (5) Members of the board appointed by the governor who are not public employees shall be compensated in accordance with RCW ((43.03.240)) 43.03.250 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.


PART 2

BASIC EDUCATION ACT RESPONSIBILITIES


        Sec. 201. RCW 28A.150.230 and 1994 c 245 s 9 are each amended to read as follows:

        (1) It is the intent and purpose of this section to guarantee that each common school district board of directors, whether or not acting through its respective administrative staff, be held accountable for the proper operation of their district to the local community and its electorate. In accordance with the provisions of Title 28A RCW, as now or hereafter amended, each common school district board of directors shall be vested with the final responsibility for the setting of policies ensuring quality in the content and extent of its educational program and that such program provide students with the opportunity to achieve those skills which are generally recognized as requisite to learning.

        (2) In conformance with the provisions of Title 28A RCW, as now or hereafter amended, it shall be the responsibility of each common school district board of directors to adopt policies to:

        (a) Establish performance criteria and an evaluation process for its certificated personnel, including administrative staff, and for all programs constituting a part of such district's curriculum;

        (b) Determine the final assignment of staff, certificated or classified, according to board enumerated classroom and program needs;

        (c) Determine the amount of instructional hours necessary for any student to acquire a quality education in such district, in not less than an amount otherwise required in RCW 28A.150.220, or rules ((and regulations)) of the state board of education;

        (d) Determine the allocation of staff time, whether certificated or classified;

        (e) Establish final curriculum standards consistent with law and rules ((and regulations of the state board of education)) of the superintendent of public instruction, relevant to the particular needs of district students or the unusual characteristics of the district, and ensuring a quality education for each student in the district; and

        (f) Evaluate teaching materials, including text books, teaching aids, handouts, or other printed material, in public hearing upon complaint by parents, guardians or custodians of students who consider dissemination of such material to students objectionable.


        Sec. 202. RCW 28A.505.140 and 1990 c 33 s 422 are each amended to read as follows:

        (1) Notwithstanding any other provision of law, the superintendent of public instruction ((is hereby directed to promulgate)) shall adopt such rules ((and regulations)) as will ((insure)) ensure proper budgetary procedures and practices, including monthly financial statements consistent with the provisions of RCW 43.09.200, and this chapter.

        (2) If the superintendent of public instruction determines upon a review of the budget of any district that said budget does not comply with the budget procedures established by this chapter or by rules ((and regulations promulgated)) adopted by the superintendent of public instruction, or the provisions of RCW 43.09.200, the superintendent shall give written notice of this determination to the board of directors of the local school district.

        (3) The local school district, notwithstanding any other provision of law, shall, within thirty days from the date the superintendent of public instruction issues a notice pursuant to subsection (2) of this section, submit a revised budget which meets the requirements of RCW 43.09.200, this chapter, and the rules ((and regulations)) of the superintendent of public instruction((: PROVIDED, That if the district fails or refuses to submit a revised budget which in the determination of the superintendent of public instruction meets the requirements of RCW 43.09.200, this chapter, and the rules and regulations of the superintendent of public instruction, the matter shall be submitted to the state board of education, which board shall meet and adopt a financial plan which shall be in effect until a budget can be adopted and submitted by the district in compliance with this section)).


        NEW SECTION. Sec. 203. (1) As the governor's steering committee for the comprehensive education study created under chapter 496, Laws of 2005 continues the study of the state funding of public education in Washington and makes final recommendations, the legislature strongly encourages the steering committee to carefully examine whether the use of inputs, such as the number of instructional hours, the number of instructional days, and student/teacher ratios, is the most efficient and effective funding system that is oriented toward student achievement and whether any changes to the current method of allocating funds can be created to implement the intent of education reform that all children can learn.

        (2) This section expires July 1, 2007.


PART 3

SCHOOL FACILITIES AND ORGANIZATION


        Sec. 301. RCW 28A.525.020 and 1969 ex.s. c 223 s 28A.47.060 are each amended to read as follows:

        The ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel, shall have the power and ((it shall be its)) duty (1) to prescribe rules ((and regulations)) governing the administration, control, terms, conditions, and disbursements of allotments to school districts to assist them in providing school plant facilities; (2) to approve allotments to districts that apply for state assistance whenever ((the board deems)) such action is advisable ((and in so doing to give due consideration to the findings, reports, and recommendations of the superintendent of public instruction pertaining thereto)); (3) to authorize the payment of approved allotments by warrant of the state treasurer; and (4) in the event that the amount of state assistance applied for exceeds the funds available for such assistance during any biennium, to make allotments on the basis of the urgency of need for school facilities in the districts that apply for assistance and/or to prorate allotments among such districts in conformity with applicable procedures and ((regulations applicable thereto which shall be established by the state board)) rules.


        Sec. 302. RCW 28A.525.030 and 1995 c 77 s 23 are each amended to read as follows:

        Whenever funds are appropriated for modernization of existing school facilities, the ((state board of education)) superintendent of public instruction is authorized to approve the use of such funds for modernization of existing facilities, modernization being limited to major structural changes in such facilities and, as necessary to bring such facilities into compliance with the barrier free access requirements of section 504 of the federal rehabilitation act of 1973 (29 U.S.C. Sec. 706) and rules implementing the act, both major and minor structural changes, and may include as incidental thereto the replacement of fixtures, fittings, furnishings and service systems of a building in order to bring it up to a contemporary state consistent with the needs of changing educational programs. The allocation of such funds shall be made upon the same basis as funds used for the financing of a new school plant project utilized for a similar purpose.


        Sec. 303. RCW 28A.525.050 and 1969 ex.s. c 223 s 28A.47.080 are each amended to read as follows:

        All applications by school districts for state assistance in providing school plant facilities shall be made to the superintendent of public instruction ((in conformity with rules and regulations which shall be prescribed by the state board of education)). Studies and surveys shall be conducted by the ((aforesaid officer)) superintendent for the purpose of securing information relating to (1) the kind and extent of the school plant facilities required and the urgency of need for such facilities in districts that seek state assistance, (2) the ability of such districts to provide capital outlay funds by local effort, (3) the need for improvement of school administrative units and school attendance areas among or within such districts, and (4) any other pertinent matters. Recommendations respecting action on the ((aforesaid)) applications shall be submitted to the ((state board of education by the)) superintendent of public instruction ((together with such reports of the findings, studies, and surveys made by said officer as may be required by the state board)).


        Sec. 304. RCW 28A.525.055 and 1994 c 219 s 11 are each amended to read as follows:

        The ((state board of education,)) rules adopted by the superintendent of public instruction for ((purposes of)) determining eligibility for state assistance for new construction((,)) shall ((adopt rules excluding)) exclude from the inventory of available educational space those spaces that have been constructed for educational and community activities from grants received from other public or private entities.


        Sec. 305. RCW 28A.525.070 and 1985 c 136 s 1 are each amended to read as follows:

        The superintendent of public instruction shall furnish (((1))) to school districts seeking state assistance consultatory and advisory service in connection with the development of school building programs and the planning of school plant facilities for such district((, and (2) to the state board of education such service as may be required by the board in the exercise of the powers and the performance of the duties vested in and required to be performed by the board)).


        Sec. 306. RCW 28A.525.080 and 1969 ex.s. c 223 s 28A.47.120 are each amended to read as follows:

        Insofar as is permissible under acts of congress, funds made available by the federal government for the purpose of assisting school districts in providing school plant facilities shall be made available to such districts in conformity with rules ((and regulations which)) that the ((state board of education)) superintendent, considering policy recommendations from the school facilities citizen advisory panel, shall establish.


        Sec. 307. RCW 28A.525.090 and 1999 c 313 s 2 are each amended to read as follows:

        (1) The ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel, shall adopt rules for appropriate use of the following construction management techniques: Value engineering, constructibility review, building commissioning, and construction management. Rules adopted under this section shall:

        (a) Define each technique as it applies to school buildings;

        (b) Describe the scope of work for each technique;

        (c) Define the timing for implementing each technique in the construction process;

        (d) Determine the appropriate size of projects for the use of each technique; and

        (e) Determine standards for qualification and performance for each technique.

        (2) Except as provided in rules adopted under subsection (1)(d) of this section, in allocating state moneys provided under this chapter, the ((state board of education)) superintendent of public instruction shall include in funding for each project, at the state matching percentage, the cost of each of the construction management techniques listed in subsection (1) of this section.

        (3) When assigning priority and allocating state funds for construction of common school facilities, the ((state board of education)) superintendent shall consider the adequacy of the construction management techniques used by a district and the compliance with the rules adopted under subsection (1) of this section.

        (4) Except as provided in rules adopted under subsection (1)(d) of this section, the construction management techniques in subsection (1) of this section shall be used on each project submitted for approval by the ((state board of education)) superintendent.

        (5)(a) School districts applying for state assistance for school facilities shall:

        (i) Cause value engineering, constructibility review, and building commissioning to be performed by contract with a professional firm specializing in those construction management techniques; and

        (ii) Contract or employ personnel to perform professional construction management.

        (b) All recommendations from the value engineering and constructibility review construction techniques for a school project shall be presented to the school district's board of directors for acceptance or rejection. If the board of directors rejects a recommendation it shall provide a statement explaining the reasons for rejecting the recommendation and include the statement in the application for state assistance to the ((state board of education)) superintendent of public instruction.

        (6) The office of the superintendent of public instruction shall provide:

        (a) An information and training program for school districts on the use of the construction management techniques; and

        (b) Consulting services to districts on the benefits and best uses of these construction management techniques.


        NEW SECTION. Sec. 308. A new section is added to chapter 28A.525 RCW to read as follows:

        (1) To maintain citizen oversight on issues pertaining to school facilities and funding for school construction, a school facilities citizen advisory panel shall be created by the state board of education. The panel shall advise and make recommendations to the superintendent of public instruction regarding school facilities, funding for school construction, joint planning and financing of educational facilities, facility plans and programs for nonhigh school districts, and determinations of remote and necessary schools.

        (2) The membership of the school facilities citizen advisory panel shall be as follows:

        (a) One member of the state board of education;

        (b) Two school district directors representing school districts of various sizes and geographic locations, who are appointed by the state board of education and selected from a list of five names submitted to the board by the Washington state school directors' association. The directors shall have some experience or knowledge in school plant facility issues. One of the directors shall represent a nonhigh school district; and

        (c) Four additional citizen members appointed by the state board of education.

        (3) Members of the panel shall be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

        (4) In addition to the school facilities citizen advisory panel, the superintendent of public instruction may convene a technical advisory group including representatives from school business officers, building and construction contracting and trade organizations, architecture and engineering organizations, and other organizations with expertise in school facilities.


        Sec. 309. RCW 28A.525.162 and 1995 c 77 s 24 are each amended to read as follows:

        (1) Funds appropriated to the ((state board of education)) superintendent of public instruction from the common school construction fund shall be allotted by the ((state board of education)) superintendent of public instruction in accordance with student enrollment and the provisions of RCW 28A.525.200.

        (2) No allotment shall be made to a school district until such district has provided matching funds equal to or greater than the difference between the total approved project cost and the amount of state assistance to the district for financing the project computed pursuant to RCW 28A.525.166, with the following exceptions:

        (a) The ((state board)) superintendent of public instruction may waive the matching requirement for districts which have provided funds for school building construction purposes through the authorization of bonds or through the authorization of excess tax levies or both in an amount equivalent to two and one-half percent of the value of its taxable property, as defined in RCW 39.36.015.

        (b) No such matching funds shall be required as a condition to the allotment of funds for the purpose of making major or minor structural changes to existing school facilities in order to bring such facilities into compliance with the barrier free access requirements of section 504 of the federal rehabilitation act of 1973 (29 U.S.C. Sec. 706) and rules implementing the act.

        (3) For the purpose of computing the state matching percentage under RCW 28A.525.166 when a school district is granted authority to enter into contracts, adjusted valuation per pupil shall be calculated using headcount student enrollments from the most recent October enrollment reports submitted by districts to the superintendent of public instruction, adjusted as follows:

        (a) In the case of projects for which local bonds were approved after May 11, 1989:

        (i) For districts which have been designated as serving high school districts under RCW 28A.540.110, students residing in the nonhigh district so designating shall be excluded from the enrollment count if the student is enrolled in any grade level not offered by the nonhigh district;

        (ii) The enrollment of nonhigh school districts shall be increased by the number of students residing within the district who are enrolled in a serving high school district so designated by the nonhigh school district under RCW 28A.540.110, including only students who are enrolled in grade levels not offered by the nonhigh school district; and

        (iii) The number of preschool students with disabilities included in the enrollment count shall be multiplied by one-half;

        (b) In the case of construction or modernization of high school facilities in districts serving students from nonhigh school districts, the adjusted valuation per pupil shall be computed using the combined adjusted valuations and enrollments of each district, each weighted by the percentage of the district's resident high school students served by the high school district; and

        (c) The number of kindergarten students included in the enrollment count shall be multiplied by one-half.

        (4) The ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel, shall prescribe ((and make effective)) such rules as are necessary to equate insofar as possible the efforts made by school districts to provide capital funds by the means aforesaid.

        (5) For the purposes of this section, "preschool students with disabilities" means developmentally disabled children of preschool age who are entitled to services under RCW 28A.155.010 through 28A.155.100 and are not included in the kindergarten enrollment count of the district.


        Sec. 310. RCW 28A.525.164 and 1990 c 33 s 456 are each amended to read as follows:

        In allotting the state funds provided by RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180, the ((state board of education)) superintendent of public instruction shall:

        (1) Prescribe rules ((and regulations)) not inconsistent with RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 governing the administration, control, terms, conditions, and disbursement of allotments to school districts to assist them in providing school plant facilities;

        (2) Approve((, whenever the board deems such action advisable,)) allotments to districts that apply for state assistance;

        (3) Authorize the payment of approved allotments by warrant of the state treasurer; and

        (4) In the event that the amount of state assistance applied for pursuant to the provisions hereof exceeds the funds available for such assistance during any biennium, make allotments on the basis of the urgency of need for school facilities in the districts that apply for assistance or prorate allotments among such districts in conformity with ((procedures and regulations)) applicable ((thereto which shall be established by the board)) rules.


        Sec. 311. RCW 28A.525.166 and 1997 c 369 s 9 are each amended to read as follows:

        Allocations to school districts of state funds provided by RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 shall be made by the ((state board of education)) superintendent of public instruction and the amount of state assistance to a school district in financing a school plant project shall be determined in the following manner:

        (1) The boards of directors of the districts shall determine the total cost of the proposed project, which cost may include the cost of acquiring and preparing the site, the cost of constructing the building or of acquiring a building and preparing the same for school use, the cost of necessary equipment, taxes chargeable to the project, necessary architects' fees, and a reasonable amount for contingencies and for other necessary incidental expenses: PROVIDED, That the total cost of the project shall be subject to review and approval by the ((state board of education)) superintendent.

        (2) The state matching percentage for a school district shall be computed by the following formula:

        The ratio of the school district's adjusted valuation per pupil divided by the ratio of the total state adjusted valuation per pupil shall be subtracted from three, and then the result of the foregoing shall be divided by three plus (the ratio of the school district's adjusted valuation per pupil divided by the ratio of the total state adjusted valuation per pupil).

 

 

 

District adjusted

Total state

 

 

 

 

3-valuation

÷

adjusted valuation

 

Computed

 

 

per pupil

 

per pupil

 

State

State

 =


 

 =- %

Assistance

Ratio

 

 

District adjusted

Total state

 

 

 

 

3 +valuation

÷

adjusted valuation

 

 

 

 

per pupil

 

per pupil

 

 


PROVIDED, That in the event the percentage of state assistance to any school district based on the above formula is less than twenty percent and such school district is otherwise eligible for state assistance under RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180, the ((state board of education)) superintendent may establish for such district a percentage of state assistance not in excess of twenty percent of the approved cost of the project, if the ((state board)) superintendent finds that such additional assistance is necessary to provide minimum facilities for housing the pupils of the district.

(3) In addition to the computed percent of state assistance developed in subsection (2) ((above)) of this section, a school district shall be entitled to additional percentage points determined by the average percentage of growth for the past three years. One percent shall be added to the computed percent of state assistance for each percent of growth, with a maximum of twenty percent.

(4) The approved cost of the project determined in the manner ((herein)) prescribed ((times)) in this section multiplied by the percentage of state assistance derived as provided for ((herein)) in this section shall be the amount of state assistance to the district for the financing of the project: PROVIDED, That need therefor has been established to the satisfaction of the ((state board of education)) superintendent: PROVIDED, FURTHER, That additional state assistance may be allowed if it is found by the ((state board of education)) superintendent, considering policy recommendations from the school facilities citizen advisory panel that such assistance is necessary in order to meet (a) a school housing emergency resulting from the destruction of a school building by fire, the condemnation of a school building by properly constituted authorities, a sudden excessive and clearly foreseeable future increase in school population, or other conditions similarly emergent in nature; or (b) a special school housing burden resulting from industrial projects of statewide significance or imposed by virtue of the admission of nonresident students into educational programs established, maintained and operated in conformity with the requirements of law; or (c) a deficiency in the capital funds of the district resulting from financing, subsequent to April 1, 1969, and without benefit of the state assistance provided by prior state assistance programs, the construction of a needed school building project or projects approved in conformity with the requirements of such programs, after having first applied for and been denied state assistance because of the inadequacy of state funds available for the purpose, or (d) a condition created by the fact that an excessive number of students live in state owned housing, or (e) a need for the construction of a school building to provide for improved school district organization or racial balance, or (f) conditions similar to those defined under (a), (b), (c), (d), and (e) ((hereinabove)) of this subsection, creating a like emergency.


Sec. 312. RCW 28A.525.168 and 1990 c 33 s 458 are each amended to read as follows:

Whenever the voters of a school district authorize the issuance of bonds and/or the levying of excess taxes in an amount sufficient to meet the requirements of RCW 28A.525.162 respecting eligibility for state assistance in providing school facilities, the taxable valuation of the district and the percentage of state assistance in providing school facilities prevailing at the time of such authorization shall be the valuation and the percentage used for the purpose of determining the eligibility of the district for an allotment of state funds and the amount or amounts of such allotments, respectively, for all projects for which the voters authorize capital funds as aforesaid, unless a higher percentage of state assistance prevails on the date that state funds for assistance in financing a project are allotted by the ((state board of education)) superintendent of public instruction in which case the percentage prevailing on the date of allotment by the ((state board)) superintendent of funds for each project shall govern: PROVIDED, That if the ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel, determines at any time that there has been undue or unwarranted delay on the part of school district authorities in advancing a project to the point of readiness for an allotment of state funds, the taxable valuation of the school district and the percentage of state assistance prevailing on the date that the allotment is made shall be used for the purposes aforesaid: PROVIDED, FURTHER, That the date ((herein)) specified in this section as applicable in determining the eligibility of an individual school district for state assistance and in determining the amount of such assistance shall be applicable also to cases where it is necessary in administering chapter 28A.540 RCW to determine eligibility for and the amount of state assistance for a group of school districts considered as a single school administrative unit.


                                                                                                                            Sec. 313. RCW 28A.525.170 and 1990 c 33 s 459 are each amended to read as follows:

                                                                                                                            If a school district which has qualified for an allotment of state funds under the provisions of RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 for school building construction is found by the ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel, to have a school housing emergency requiring an allotment of state funds in excess of the amount allocable under RCW 28A.525.166, an additional allotment may be made to such district: PROVIDED, That the total amount allotted shall not exceed ninety percent of the total cost of the approved project which may include the cost of the site and equipment. At any time thereafter when the ((state board of education)) superintendent finds that the financial position of such school district has improved through an increase in its taxable valuation or through retirement of bonded indebtedness or through a reduction in school housing requirements, or for any combination of these reasons, the amount of such additional allotment, or any part of such amount as the ((state board of education)) superintendent determines, shall be deducted, under terms and conditions prescribed by the ((board)) superintendent, from any state school building construction funds which might otherwise be provided to such district.


                                                                                                                            Sec. 314. RCW 28A.525.172 and 1969 ex.s. c 244 s 7 are each amended to read as follows:

                                                                                                                            All applications by school districts for state assistance in providing school plant facilities shall be made to the superintendent of public instruction in conformity with rules ((and regulations which shall be prescribed)) adopted by the ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel. Studies and surveys shall be conducted by the ((state board)) superintendent for the purpose of securing information relating to (a) the kind and extent of the school plant facilities required and the urgency of need for such facilities in districts that seek state assistance, (b) the ability of such districts to provide capital funds by local effort, (c) the need for improvement of school administrative units and school attendance areas among or within such districts, and (d) any other pertinent matters.


Sec. 315. RCW 28A.525.174 and 1990 c 33 s 460 are each amended to read as follows:

It shall be the duty of the ((state board of education)) superintendent of public instruction, in consultation with the Washington state department of ((social and)) health ((services)), to prepare a manual and/or to specify other materials for the information and guidance of local school district authorities and others responsible for and concerned with the designing, planning, maintenance and operation of school plant facilities for the public schools. In so doing due consideration shall be given to the presentation of information regarding (((a))) (1) the need for cooperative state-local district action in planning school plant facilities arising out of the cooperative plan for financing said facilities provided for in RCW ((28A.525.160 through 28A.525.182; (b))) 28A.525.162 through 28A.525.180; (2) procedures in inaugurating and conducting a school plant planning program for a school district; (((c))) (3) standards for use in determining the selection and development of school sites and in designing, planning, and constructing school buildings to the end that the health, safety, and educational well-being and development of school children will be served; (((d))) (4) the planning of readily expansible and flexible school buildings to meet the requirements of an increasing school population and a constantly changing educational program; (((e))) (5) an acceptable school building maintenance program and the necessity therefor; (((f))) (6) the relationship of an efficient school building operations service to the health and educational progress of pupils; and (((g))) (7) any other matters regarded by the ((state board)) superintendent as pertinent or related to the purposes and requirements of RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180.


Sec. 316. RCW 28A.525.176 and 1990 c 33 s 461 are each amended to read as follows:

The ((state board of education)) superintendent of public instruction shall furnish to school districts seeking state assistance under the provisions of RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 consultatory and advisory service in connection with the development of school building programs and the planning of school plant facilities.


Sec. 317. RCW 28A.525.178 and 1990 c 33 s 462 are each amended to read as follows:

((Whenever in the judgment of the state board of education)) When economies may be ((effected)) affected without impairing the usefulness and adequacy of school buildings, ((said board)) the superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel, may prescribe rules ((and regulations)) and establish procedures governing the preparation and use of modifiable basic or standard plans for school building construction projects for which state assistance funds provided by RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 are allotted.


Sec. 318. RCW 28A.525.180 and 1990 c 33 s 463 are each amended to read as follows:

The total amount of funds appropriated under the provisions of RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 shall be reduced by the amount of federal funds made available during each biennium for school construction purposes under any applicable federal law. The funds appropriated by RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 and available for allotment by the ((state board of education)) superintendent of public instruction shall be reduced by the amount of such federal funds made available. Notwithstanding the foregoing provisions of this section, the total amount of funds appropriated by RCW ((28A.525.160 through 28A.525.182)) 28A.525.162 through 28A.525.180 shall not be reduced by reason of any grants to any school district of federal moneys paid under Public Law No. 815 or any other federal act authorizing school building construction assistance to federally affected areas.


                                                                                                                            Sec. 319. RCW 28A.525.190 and 1975 1st ex.s. c 98 s 2 are each amended to read as follows:

                                                                                                                            The ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel shall prioritize the construction of common school facilities only from funds appropriated and available in the common school construction fund.


                                                                                                                            Sec. 320. RCW 28A.525.200 and 1990 c 33 s 465 are each amended to read as follows:

                                                                                                                            Notwithstanding any other provision of RCW 28A.525.010 through 28A.525.222, the allocation and distribution of funds by the ((state board of education which are now or may hereafter be appropriated)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel, for the purposes of providing assistance in the construction of school plant facilities shall be governed by ((RCW 28A.525.010 through 28A.525.080 and 28A.525.162 through 28A.525.178)) this chapter.


                                                                                                                            Sec. 321. RCW 28A.525.216 and 1990 c 33 s 467 are each amended to read as follows:

                                                                                                                            The proceeds from the sale of the bonds deposited under RCW 28A.525.214 in the common school construction fund shall be administered by the ((state board of education)) superintendent of public instruction.


                                                                                                                            Sec. 322. RCW 28A.150.260 and 1997 c 13 s 2 are each amended to read as follows:

                                                                                                                            The basic education allocation for each annual average full time equivalent student shall be determined in accordance with the following procedures:

                                                                                                                            (1) The governor shall and the superintendent of public instruction may recommend to the legislature a formula based on a ratio of students to staff for the distribution of a basic education allocation for each annual average full time equivalent student enrolled in a common school. The distribution formula shall have the primary objective of equalizing educational opportunities and shall provide appropriate recognition of the following costs among the various districts within the state:

                                                                                                                            (a) Certificated instructional staff and their related costs;

                                                                                                                            (b) Certificated administrative staff and their related costs;

                                                                                                                            (c) Classified staff and their related costs;

                                                                                                                            (d) Nonsalary costs;

                                                                                                                            (e) Extraordinary costs, including school facilities, of remote and necessary schools as judged by the superintendent of public instruction, with recommendations from the school facilities citizen advisory panel under section 308 of this act, and small high schools, including costs of additional certificated and classified staff; and

(f) The attendance of students pursuant to RCW 28A.335.160 and 28A.225.250 who do not reside within the servicing school district.

(2)(a) This formula for distribution of basic education funds shall be reviewed biennially by the superintendent and governor. The recommended formula shall be subject to approval, amendment or rejection by the legislature. The formula shall be for allocation purposes only. While the legislature intends that the allocations for additional instructional staff be used to increase the ratio of such staff to students, nothing in this section shall require districts to reduce the number of administrative staff below existing levels.

(b) The formula adopted by the legislature shall reflect the following ratios at a minimum: (i) Forty-nine certificated instructional staff to one thousand annual average full time equivalent students enrolled in grades kindergarten through three; (ii) forty-six certificated instructional staff to one thousand annual average full time equivalent students in grades four through twelve; (iii) four certificated administrative staff to one thousand annual average full time equivalent students in grades kindergarten through twelve; and (iv) sixteen and sixty-seven one-hundredths classified personnel to one thousand annual average full time equivalent students enrolled in grades kindergarten through twelve.

(c) In the event the legislature rejects the distribution formula recommended by the governor, without adopting a new distribution formula, the distribution formula for the previous school year shall remain in effect: PROVIDED, That the distribution formula developed pursuant to this section shall be for state apportionment and equalization purposes only and shall not be construed as mandating specific operational functions of local school districts other than those program requirements identified in RCW 28A.150.220 and 28A.150.100. The enrollment of any district shall be the annual average number of full time equivalent students and part time students as provided in RCW 28A.150.350, enrolled on the first school day of each month and shall exclude full time equivalent students with disabilities recognized for the purposes of allocation of state funds for programs under RCW 28A.155.010 through 28A.155.100. The definition of full time equivalent student shall be determined by rules of the superintendent of public instruction: PROVIDED, That the definition shall be included as part of the superintendent's biennial budget request: PROVIDED, FURTHER, That any revision of the present definition shall not take effect until approved by the house appropriations committee and the senate ways and means committee: PROVIDED, FURTHER, That the office of financial management shall make a monthly review of the superintendent's reported full time equivalent students in the common schools in conjunction with RCW 43.62.050.

(3)(a) Certificated instructional staff shall include those persons employed by a school district who are nonsupervisory employees within the meaning of RCW 41.59.020(8): PROVIDED, That in exceptional cases, people of unusual competence but without certification may teach students so long as a certificated person exercises general supervision: PROVIDED, FURTHER, That the hiring of such classified people shall not occur during a labor dispute and such classified people shall not be hired to replace certificated employees during a labor dispute.

(b) Certificated administrative staff shall include all those persons who are chief executive officers, chief administrative officers, confidential employees, supervisors, principals, or assistant principals within the meaning of RCW 41.59.020(4).


Sec. 323. RCW 28A.335.160 and 1995 c 335 s 604 are each amended to read as follows:


                                                                                                                            Any school district may cooperate with one or more school districts in the joint financing, planning, construction, equipping and operating of any educational facility otherwise authorized by law: PROVIDED, That any cooperative financing plan involving the construction of school plant facilities must be approved by the ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel under section 308 of this act, pursuant to such rules ((as may now or hereafter be promulgated)) adopted relating to state approval of school construction.


                                                                                                                            Sec. 324. RCW 28A.540.050 and 1990 c 33 s 485 are each amended to read as follows:

                                                                                                                            Subsequent to the holding of a hearing or hearings as provided in RCW 28A.540.040, the regional committee on school district organization shall determine the nonhigh school districts to be included in the plan and the amount of capital funds to be provided by every school district included therein, and shall submit the proposed plan to the ((state board of education)) superintendent of public instruction together with such maps and other materials pertaining thereto as the ((state board)) superintendent may require. The ((state board)) superintendent, considering policy recommendations from the school facilities citizen advisory panel under section 308 of this act, shall review such plan, shall approve any plan which in ((its)) his or her judgment makes adequate and satisfactory provision for participation by the nonhigh school districts in providing capital funds to be used for the purpose above stated, and shall notify the regional committee of such action. Upon receipt by the regional committee of such notification, the educational service district superintendent, or his or her designee, shall notify the board of directors of each school district included in the plan, supplying each board with complete details of the plan and shall state the total amount of funds to be provided and the amount to be provided by each district.

                                                                                                                            If any such plan submitted by a regional committee is not approved by the ((state board)) superintendent of public instruction, the regional committee shall be so notified, which notification shall contain a statement of reasons therefor and suggestions for revision. Within sixty days thereafter the regional committee shall submit to the ((state board)) superintendent a revised plan which revision shall be subject to approval or disapproval by the ((state board)) superintendent, considering policy recommendations from the school facilities citizen advisory panel, and the procedural requirements and provisions of law applicable to an original plan submitted to ((said board)) the superintendent.


                                                                                                                            NEW SECTION. Sec. 325. A new section is added to chapter 28A.545 RCW to read as follows:

                                                                                                                            The superintendent of public instruction, with recommendations from the school facilities citizen advisory panel under section 308 of this act, shall adopt rules governing the establishment in any existing nonhigh school district of any secondary program or any new grades in grades nine through twelve. Before any such program or any new grades are established, the district must obtain prior approval of the superintendent of public instruction.


                                                                                                                            Sec. 326. RCW 28A.150.530 and 2005 c 12 s 7 are each amended to read as follows:

                                                                                                                            (1) In adopting implementation rules, ((the state board of education, in consultation with)) the superintendent of public instruction ((and)), in consultation with the department of general administration, shall review and modify the current requirement for an energy conservation report review by the department of general administration as provided in WAC 180-27-075.

(2) In adopting implementation rules, ((the state board of education, in consultation with)) the superintendent of public instruction shall:

(a) Review and modify the current requirements for value engineering, ((constructability)) constructibility review, and building commissioning as provided in WAC 180-27-080;

(b) Review private and public utility providers' capacity and financial/technical assistance programs for affected public school districts to monitor and report utility consumption for purposes of reporting to the superintendent of public instruction as provided in RCW 39.35D.040;

(c) Coordinate with the department of general administration, the state board of health, the department of ecology, federal agencies, and other affected agencies as appropriate in their consideration of rules to implement this section.


Sec. 327. RCW 28A.335.210 and 2005 c 36 s 1 are each amended to read as follows:

The ((state board of education and)) superintendent of public instruction shall allocate, as a nondeductible item, out of any moneys appropriated for state assistance to school districts for the original construction of any school plant facility the amount of one-half of one percent of the appropriation to be expended by the Washington state arts commission for the acquisition of works of art. The works of art may be placed in accordance with Article IX, sections 2 and 3 of the state Constitution on public lands, integral to or attached to a public building or structure, detached within or outside a public building or structure, part of a portable exhibition or collection, part of a temporary exhibition, or loaned or exhibited in other public facilities. The Washington state arts commission shall, in consultation with the superintendent of public instruction, determine the amount to be made available for the purchase of works of art under this section, and payments therefor shall be made in accordance with law. The designation of projects and sites, selection, contracting, purchase, commissioning, reviewing of design, execution and placement, acceptance, maintenance, and sale, exchange, or disposition of works of art shall be the responsibility of the Washington state arts commission in consultation with the superintendent of public instruction and representatives of school district boards of directors. The superintendent of public instruction and the school district board of directors of the districts where the sites are selected shall have the right to:

(1) Waive its use of the one-half of one percent of the appropriation for the acquisition of works of art before the selection process by the Washington state arts commission;

(2) Appoint a representative to the body established by the Washington state arts commission to be part of the selection process with full voting rights;

(3) Reject the results of the selection process;

(4) Reject the placement of a completed work or works of art on school district premises if such works are portable.

Rejection at any point before or after the selection process shall not cause the loss of or otherwise endanger state construction funds available to the local school district. Any works of art rejected under this section shall be applied to the provision of works of art under this chapter, at the discretion of the Washington state arts commission, notwithstanding any contract or agreement between the affected school district and the artist involved. In addition to the cost of the works of art the one-half of one percent of the appropriation as provided ((herein)) in this section shall be used to provide for the administration, including conservation of the state art collection, by the Washington state arts commission and all costs for installation of the work of art. For the purpose of this section building shall not include sheds, warehouses, or other buildings of a temporary nature.

                                                                                                                            The executive director of the arts commission, the superintendent of public instruction, and the Washington state school directors association shall appoint a study group to review the operations of the one-half of one percent for works of art under this section.


                                                                                                                            Sec. 328. RCW 28A.335.230 and 1987 c 112 s 1 are each amended to read as follows:

                                                                                                                            School districts shall be required to lease for a reasonable fee vacant school plant facilities from a contiguous school district wherever possible.

                                                                                                                            No school district with unhoused students may be eligible for the state matching funds for the construction of school plant facilities if:

                                                                                                                            (1) The school district contiguous to the school district applying for the state matching percentage has vacant school plant facilities;

                                                                                                                            (2) The superintendent of public instruction ((and the state board of education have)) has determined the vacant school plant facilities available in the contiguous district will fulfill the needs of the applicant district in housing unhoused students. In determining whether the contiguous district school plant facilities meet the needs of the applicant district, consideration shall be given, but not limited to the geographic location of the vacant facilities as they relate to the applicant district; and

                                                                                                                            (3) A lease of the vacant school plant facilities can be negotiated.


                                                                                                                            Sec. 329. RCW 28A.540.070 and 1990 c 33 s 486 are each amended to read as follows:

                                                                                                                            In the event that a proposal or proposals for providing capital funds as provided in RCW 28A.540.060 is not approved by the voters of a nonhigh school district a second election thereon shall be held within sixty days thereafter. If the vote of the electors of the nonhigh school district is again in the negative, the high school students residing therein shall not be entitled to admission to the high school under the provisions of RCW 28A.225.210, following the close of the school year during which the second election is held: PROVIDED, That in any such case the regional committee on school district organization shall determine within thirty days after the date of the aforesaid election the advisability of initiating a proposal for annexation of such nonhigh school district to the school district in which the proposed facilities are to be located or to some other district where its students can attend high school without undue inconvenience: PROVIDED FURTHER, That pending such determination by the regional committee and action thereon as required by law the board of directors of the high school district shall continue to admit high school students residing in the nonhigh school district. Any proposal for annexation of a nonhigh school district initiated by a regional committee shall be subject to the procedural requirements of this chapter respecting a public hearing and submission to and approval by the ((state board of education)) superintendent of public instruction, considering policy recommendations from the school facilities citizen advisory panel under section 308 of this act. Upon approval by the ((state board)) superintendent of public instruction of any such proposal, the educational service district superintendent shall make an order, establishing the annexation.


Sec. 330. RCW 39.35D.020 and 2005 c 12 s 2 are each amended to read as follows:

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

(1) "Department" means the department of general administration.

(2) "High-performance public buildings" means high-performance public buildings designed, constructed, and certified to a standard as identified in this chapter.

(3) "Institutions of higher education" means the state universities, the regional universities, The Evergreen State College, the community colleges, and the technical colleges.

(4) "LEED silver standard" means the United States green building council leadership in energy and environmental design green building rating standard, referred to as silver standard.

(5)(a) "Major facility project" means: (i) A construction project larger than five thousand gross square feet of occupied or conditioned space as defined in the Washington state energy code; or (ii) a building renovation project when the cost is greater than fifty percent of the assessed value and the project is larger than five thousand gross square feet of occupied or conditioned space as defined in the Washington state energy code.

(b) "Major facility project" does not include: (i) Projects for which the department, public school district, or other applicable agency and the design team determine the LEED silver standard or the Washington sustainable school design protocol to be not practicable; or (ii) transmitter buildings, pumping stations, hospitals, research facilities primarily used for sponsored laboratory experimentation, laboratory research, or laboratory training in research methods, or other similar building types as determined by the department. When the LEED silver standard is determined to be not practicable for a project, then it must be determined if any LEED standard is practicable for the project. If LEED standards or the Washington sustainable school design protocol are not followed for the project, the public school district or public agency shall report these reasons to the department.

(6) "Public agency" means every state office, officer, board, commission, committee, bureau, department, and public higher education institution.

(7) "Public school district" means a school district eligible to receive state basic education moneys pursuant to RCW 28A.150.250 and 28A.150.260.

(8) "Washington sustainable school design protocol" means the school design protocol and related information developed by the ((state board of education and the)) office of the superintendent of public instruction, in conjunction with school districts and the school facilities advisory board.


Sec. 331. RCW 39.35D.040 and 2005 c 12 s 4 are each amended to read as follows:

(1) All major facility projects of public school districts receiving any funding in a state capital budget must be designed and constructed to at least the LEED silver standard or the Washington sustainable school design protocol. To the extent appropriate LEED silver or Washington sustainable school design protocol standards exist for the type of building or facility, this subsection applies to major facility projects that have not received project approval from the superintendent of public instruction prior to: (a) July 1, 2006, for volunteering school districts; (b) July 1, 2007, for class one school districts; and (c) July 1, 2008, for class two school districts.

(2) Public school districts under this section shall: (a) Monitor and document appropriate operating benefits and savings resulting from major facility projects designed and constructed as required under this section for a minimum of five years following local board acceptance of a project receiving state funding; and (b) report annually to the superintendent of public instruction. The form and content of each report must be mutually developed by the office of the superintendent of public instruction in consultation with school districts.

                                                                                                                            (3) The superintendent of public instruction shall consolidate the reports required in subsection (2) of this section into one report and report to the governor and legislature by September 1st of each even-numbered year beginning in 2006 and ending in 2016. In its report, the superintendent of public instruction shall also report on the implementation of this chapter, including reasons why the LEED standard or Washington sustainable school design protocol was not used as required by RCW 39.35D.020(5)(b). The superintendent of public instruction shall make recommendations regarding the ongoing implementation of this chapter, including a discussion of incentives and disincentives related to implementing this chapter.

                                                                                                                            (4) The ((state board of education, in consultation with the)) superintendent of public instruction((,)) shall develop and issue guidelines for administering this chapter for public school districts. The purpose of the guidelines is to define a procedure and method for employing and verifying compliance with the LEED silver standard or the Washington sustainable school design protocol.

                                                                                                                            (5) The superintendent of public instruction shall utilize the school facilities advisory board as a high-performance buildings advisory committee comprised of affected public schools, ((the state board of education,)) the superintendent of public instruction, the department, and others at the superintendent of public instruction's discretion to provide advice on implementing this chapter. Among other duties, the advisory committee shall make recommendations regarding an education and training process and an ongoing evaluation or feedback process to help the superintendent of public instruction ((and the state board of education)) implement this chapter.


                                                                                                                            Sec. 332. RCW 39.35D.060 and 2005 c 12 s 6 are each amended to read as follows:

                                                                                                                            (1)(a) The department, in consultation with affected public agencies, shall develop and issue guidelines for administering this chapter for public agencies. The purpose of the guidelines is to define a procedure and method for employing and verifying activities necessary for certification to at least the LEED silver standard for major facility projects.

                                                                                                                            (b) The department and the office of the superintendent of public instruction shall amend their fee schedules for architectural and engineering services to accommodate the requirements in the design of major facility projects under this chapter.

                                                                                                                            (c) The department and the office of the superintendent of public instruction shall procure architecture and engineering services consistent with chapter 39.80 RCW.

                                                                                                                            (d) Major facility projects designed to meet standards identified in this chapter must include building commissioning as a critical cost-saving part of the construction process. This process includes input from the project design and construction teams and the project ownership representatives.

                                                                                                                            (e) As provided in the request for proposals for construction services, the operating agency shall hold a preproposal conference for prospective bidders to discuss compliance with and achievement of standards identified in this chapter for prospective respondents.

                                                                                                                            (2) The department shall create a high-performance buildings advisory committee comprised of representatives from the design and construction industry involved in public works contracting, personnel from the affected public agencies responsible for overseeing public works projects, ((the state board of education,)) the office of the superintendent of public instruction, and others at the department's discretion to provide advice on implementing this chapter. Among other duties, the advisory committee shall make recommendations regarding an education and training process and an ongoing evaluation or feedback process to help the department implement this chapter.

(3) The department and the ((state board of education)) office of the superintendent of public instruction shall adopt rules to implement this section.


Sec. 333. RCW 79.17.100 and 2003 c 334 s 322 are each amended to read as follows:

Except as otherwise provided in RCW 79.17.110, upon the application of a school district or any institution of higher education for the purchase or lease of lands granted to the state by the United States, the department may offer such land for sale or lease to such school district or institution of higher education in such acreage as it may determine, consideration being given upon application of a school district to school site criteria established by the ((state board of education)) superintendent of public instruction. However, in the event the department thereafter proposes to offer such land for sale or lease at public auction, such school district or institution of higher education shall have a preference right for six months from notice of such proposal to purchase or lease such land at the appraised value determined by the board.


Sec. 334. RCW 79.17.120 and 2003 c 334 s 438 are each amended to read as follows:

The purchases authorized under RCW 79.17.110 shall be classified as for the construction of common school plant facilities under RCW 28A.525.010 through 28A.525.222 and shall be payable out of the common school construction fund as otherwise provided for in RCW 28A.515.320 if the school district involved was under emergency school construction classification as established by the ((state board of education)) superintendent of public instruction at any time during the period of its lease of state lands.


NEW SECTION. Sec. 335. The following sections are each decodified:

RCW 28A.525.120

RCW 28A.525.122

RCW 28A.525.124

RCW 28A.525.126

RCW 28A.525.128

RCW 28A.525.130

RCW 28A.525.132

RCW 28A.525.134

RCW 28A.525.140

RCW 28A.525.142

RCW 28A.525.144

RCW 28A.525.146

RCW 28A.525.148

RCW 28A.525.150

RCW 28A.525.152

RCW 28A.525.154

RCW 28A.525.156

RCW 28A.525.158

RCW 28A.525.160

RCW 28A.525.182



PART 4

COURSES OF STUDY AND EDUCATIONAL PROGRAMS


                                                                                                                            Sec. 401. RCW 28A.305.220 and 2004 c 19 s 108 are each amended to read as follows:

                                                                                                                            (1) The ((state board of education)) superintendent of public instruction, in consultation with the higher education coordinating board, the state board for community and technical colleges, and the work force training and education coordinating board, shall develop for use by all public school districts a standardized high school transcript. The ((state board of education)) superintendent shall establish clear definitions for the terms "credits" and "hours" so that school programs operating on the quarter, semester, or trimester system can be compared.

                                                                                                                             (2) The standardized high school transcript shall include the following information:

                                                                                                                            (a) The highest scale score and level achieved in each content area on the high school Washington assessment of student learning or other high school measures successfully completed by the student as provided by RCW 28A.655.061 and 28A.155.045;

                                                                                                                            (b) All scholar designations as provided by RCW 28A.655.061;

                                                                                                                            (c) A notation of whether the student has earned a certificate of individual achievement or a certificate of academic achievement by means of the Washington assessment of student learning or by an alternative assessment.

                                                                                                                            (3) Transcripts are important documents to students who will apply for admission to postsecondary institutions of higher education. Transcripts are also important to students who will seek employment upon or prior to graduation from high school. It is recognized that student transcripts may be the only record available to employers in their decision-making processes regarding prospective employees. The superintendent of public instruction shall require school districts to inform annually all high school students that prospective employers may request to see transcripts and that the prospective employee's decision to release transcripts can be an important part of the process of applying for employment.


                                                                                                                            Sec. 402. RCW 28A.230.100 and 1991 c 116 s 8 are each amended to read as follows:

                                                                                                                            The ((state board of education)) superintendent of public instruction, in consultation with the higher education coordinating board, the state board for community and technical colleges, and the work force training and education coordinating board, shall adopt rules pursuant to chapter 34.05 RCW, to implement the course requirements set forth in RCW 28A.230.090. The rules shall include, as the ((state board)) superintendent deems necessary, granting equivalencies for and temporary exemptions from the course requirements in RCW 28A.230.090 and special alterations of the course requirements in RCW 28A.230.090. In developing such rules the ((state board)) superintendent shall recognize the relevance of vocational and applied courses and allow such courses to fulfill in whole or in part the courses required for graduation in RCW 28A.230.090. The rules may include provisions for competency testing in lieu of such courses required for graduation in RCW 28A.230.090 or demonstration of specific skill proficiency or understanding of concepts through work or experience.


                                                                                                                            Sec. 403. RCW 28A.230.170 and 1985 c 341 s 1 are each amended to read as follows:

                                                                                                                            The study of the Constitution of the United States and the Constitution of the state of Washington shall be a condition prerequisite to graduation from the public and private high schools of this state. The ((state board of education acting upon the advice of the)) superintendent of public instruction shall provide by rule ((or regulation)) for the implementation of this section.


NEW SECTION. Sec. 404. The state board of education, in consultation with the state board for community and technical colleges, shall examine the statutory authority, rules, and jurisdiction between the K-12 and postsecondary education systems regarding the general educational development test and adult education. The board shall make recommendations for change or clarification to the education committees of the legislature by January 15, 2007.


NEW SECTION. Sec. 405. (1) The state board of education shall develop and propose a revised definition of the purpose and expectations for high school diplomas issued by public schools in Washington state. The revised definition shall address whether attainment of a high school diploma is intended to signify that a student is ready for success in college, ready for successful and gainful employment in the workplace, or some combination of these and other objectives. The revised definition shall focus on the knowledge, skills, and abilities that students are expected to demonstrate to receive a high school diploma, as well as the various methods to be used to measure student performance, rather than focusing on courses, credits, seat time, and test scores.

(2) In developing the revised definition of the high school diploma, the state board of education shall consult with educators, parents, institutions of higher education, employers, and community leaders. The board shall also work with the state board for community and technical colleges, the higher education coordinating board, and the work force training and education coordinating board.

(3) The state board of education shall submit the proposed revised definition of the high school diploma, along with any necessary revisions to state statutes and rules, to the education committees of the legislature by December 1, 2007.


Sec. 406. RCW 28A.305.170 and 2002 c 291 s 3 are each amended to read as follows:

(1) In addition to any other powers and duties as provided by law, the ((state board of education)) superintendent of public instruction, in consultation with the military department, shall adopt rules governing and authorizing the acceptance of national guard high school career training and the national guard youth challenge program in lieu of either required high school credits or elective high school credits.

(2) With the exception of students enrolled in the national guard youth challenge program, students enrolled in such national guard programs shall be considered enrolled in the common school last attended preceding enrollment in such national guard program.

(3) The ((board)) superintendent shall adopt rules to ensure that students who successfully complete the national guard youth challenge program are granted an appropriate number of high school credits, based on the students' levels of academic proficiency as measured by the program.


Sec. 407. RCW 28A.230.130 and 2003 c 49 s 2 are each amended to read as follows:

(1) All public high schools of the state shall provide a program, directly or in cooperation with a community college or another school district, for students whose educational plans include application for entrance to a baccalaureate-granting institution after being granted a high school diploma. The program shall help these students to meet at least the minimum entrance requirements under RCW 28B.10.050.


                                                                                                                            (2) All public high schools of the state shall provide a program, directly or in cooperation with a community or technical college, a skills center, an apprenticeship committee, or another school district, for students who plan to pursue career or work opportunities other than entrance to a baccalaureate-granting institution after being granted a high school diploma. These programs may:

                                                                                                                            (a) Help students demonstrate the application of essential academic learning requirements to the world of work, occupation-specific skills, knowledge of more than one career in a chosen pathway, and employability and leadership skills; and

                                                                                                                            (b) Help students demonstrate the knowledge and skill needed to prepare for industry certification, and/or have the opportunity to articulate to postsecondary education and training programs.

                                                                                                                            (((3) The state board of education, upon request from local school districts, may grant waivers from the requirements to provide the program described in subsections (1) and (2) of this section for reasons relating to school district size and the availability of staff authorized to teach subjects which must be provided. In considering waiver requests related to programs in subsection (2) of this section, the state board of education shall consider the extent to which the school district has offered such programs before the 2003-04 school year.))


                                                                                                                            Sec. 408. RCW 28A.205.010 and 2005 c 497 s 214 are each amended to read as follows:

                                                                                                                            (1) As used in this chapter, unless the context thereof shall clearly indicate to the contrary:

                                                                                                                            "Education center" means any private school operated on a profit or nonprofit basis which does the following:

                                                                                                                            (a) Is devoted to the teaching of basic academic skills, including specific attention to improvement of student motivation for achieving, and employment orientation.

                                                                                                                            (b) Operates on a clinical, client centered basis. This shall include, but not be limited to, performing diagnosis of individual educational abilities, determination and setting of individual goals, prescribing and providing individual courses of instruction therefor, and evaluation of each individual client's progress in his or her educational program.

                                                                                                                            (c) Conducts courses of instruction by professionally trained personnel certificated by the Washington professional educator standards board according to rules adopted for the purposes of this chapter and providing, for certification purposes, that a year's teaching experience in an education center shall be deemed equal to a year's teaching experience in a common or private school.

                                                                                                                            (2) For purposes of this chapter, basic academic skills shall include the study of mathematics, speech, language, reading and composition, science, history, literature and political science or civics; it shall not include courses of a vocational training nature and shall not include courses deemed nonessential to the accrediting ((of the common schools)) or the approval of private schools under RCW 28A.305.130.

                                                                                                                            (3) The ((state board of education)) superintendent of public instruction shall certify an education center only upon application and (a) determination that such school comes within the definition thereof as set forth in subsection (1) of this section and (b) demonstration on the basis of actual educational performance of such applicants' students which shows after consideration of their students' backgrounds, educational gains that are a direct result of the applicants' educational program. Such certification may be withdrawn if the ((board)) superintendent finds that a center fails to provide adequate instruction in basic academic skills. No education center certified by the ((state board of education)) superintendent of public instruction pursuant to this section shall be deemed a common school under RCW 28A.150.020 or a private school for the purposes of RCW 28A.195.010 through 28A.195.050.


Sec. 409. RCW 28A.205.070 and 1993 c 211 s 6 are each amended to read as follows:

In allocating funds appropriated for education centers, the superintendent of public instruction shall:

(1) Place priority upon stability and adequacy of funding for education centers that have demonstrated superior performance as defined in RCW 28A.205.040(2).

(2) Initiate and maintain a competitive review process to select new or expanded center programs in unserved or underserved areas. The criteria for review of competitive proposals for new or expanded education center services shall include but not be limited to:

(a) The proposing organization shall have obtained certification from the ((state board of education)) superintendent of public instruction as provided in RCW 28A.205.010;

(b) The cost-effectiveness of the proposal; and

(c) The availability of committed nonstate funds to support, enrich, or otherwise enhance the basic program.

(3) In selecting areas for new or expanded education center programs, the superintendent of public instruction shall consider factors including but not limited to:

(a) The proportion and total number of dropouts unserved by existing center programs, if any;

(b) The availability within the geographic area of programs other than education centers which address the basic educational needs of dropouts; and

(c) Waiting lists or other evidence of demand for expanded education center programs.

(4) In the event of any curtailment of services resulting from lowered legislative appropriations, the superintendent of public instruction shall issue pro rata reductions to all centers funded at the time of the lowered appropriation. Individual centers may be exempted from such pro rata reductions if the superintendent finds that such reductions would impair the center's ability to operate at minimally acceptable levels of service. In the event of such exceptions, the superintendent shall determine an appropriate rate for reduction to permit the center to continue operation.

(5) In the event that an additional center or centers become certified and apply to the superintendent for funds to be allocated from a legislative appropriation which does not increase from the immediately preceding biennium, or does not increase sufficiently to allow such additional center or centers to operate at minimally acceptable levels of service without reducing the funds available to previously funded centers, the superintendent shall not provide funding for such additional center or centers from such appropriation.


Sec. 410. RCW 28A.215.010 and 1995 c 335 s 104 are each amended to read as follows:

The board of directors of any school district shall have the power to establish and maintain preschools and to provide before-and-after-school and vacation care in connection with the common schools of said district located at such points as the board shall deem most suitable for the convenience of the public, for the care and instruction of infants and children residing in said district. The board shall establish such courses, activities, rules, and regulations governing preschools and before-and-after-school care as it may deem best: PROVIDED, That these courses and activities shall meet the minimum standard for such preschools as established by the United States department of health, education and welfare, or its successor agency, and the ((state board of education)) superintendent of public instruction. Except as otherwise provided by state or federal law, the board of directors may fix a reasonable charge for the care and instruction of children attending such schools. The board may, if necessary, supplement such funds as are received for the superintendent of public instruction or any agency of the federal government, by an appropriation from the general school fund of the district.


                                                                                                                            Sec. 411. RCW 28A.215.020 and 1995 c 335 s 308 are each amended to read as follows:

                                                                                                                            Expenditures under federal funds and/or state appropriations made to carry out the purposes of RCW 28A.215.010 through 28A.215.050 shall be made by warrants issued by the state treasurer upon order of the superintendent of public instruction. The ((state board of education)) superintendent of public instruction shall make necessary rules ((and regulations)) to carry out the purpose of RCW 28A.215.010. After being notified by the office of the governor that there is an agency or department responsible for early learning, the superintendent shall consult with that agency when establishing relevant rules.


                                                                                                                            Sec. 412. RCW 28A.205.040 and 1999 c 348 s 4 are each amended to read as follows:

                                                                                                                            (1)(a) From funds appropriated for that purpose, the superintendent of public instruction shall pay fees to a certified center on a monthly basis for each student enrolled in compliance with RCW 28A.205.020. The superintendent shall set fees by rule.

                                                                                                                            (b) Revisions in such fees proposed by an education center shall become effective after thirty days notice unless the superintendent finds such a revision is unreasonable in which case the revision shall not take effect. ((An education center may, within fifteen days after such a finding by the superintendent, file notification of appeal with the state board of education which shall, no later than its second regularly scheduled meeting following notification of such appeal, either grant or deny the proposed revision.)) The administration of any general education development test shall not be a part of such initial diagnostic procedure.

                                                                                                                            (c) Reimbursements shall not be made for students who are absent.

                                                                                                                            (d) No center shall make any charge to any student, or the student's parent, guardian or custodian, for whom a fee is being received under the provisions of this section.

                                                                                                                            (2) Payments shall be made from available funds first to those centers that have in the judgment of the superintendent demonstrated superior performance based upon consideration of students' educational gains taking into account such students' backgrounds, and upon consideration of cost effectiveness. In considering the cost effectiveness of nonprofit centers the superintendent shall take into account not only payments made under this section but also factors such as tax exemptions, direct and indirect subsidies or any other cost to taxpayers at any level of government which result from such nonprofit status.

                                                                                                                            (3) To be eligible for such payment, every such center, without prior notice, shall permit a review of its accounting records by personnel of the state auditor during normal business hours.

                                                                                                                            (4) If total funds for this purpose approach depletion, the superintendent shall notify the centers of the date after which further funds for reimbursement of the centers' services will be exhausted.


                                                                                                                            Sec. 413. RCW 28A.215.140 and 1988 c 174 s 5 are each amended to read as follows:

The department shall establish an advisory committee composed of interested parents and representatives from ((the state board of education,)) the office of the superintendent of public instruction, the division of children and family services within the department of social and health services, early childhood education and development staff preparation programs, the head start programs, school districts, and such other community and business organizations as deemed necessary by the department to assist with the establishment of the preschool program and advise the department on matters regarding the on-going promotion and operation of the program.


Sec. 414. RCW 28A.230.020 and 1991 c 116 s 6 are each amended to read as follows:

All common schools shall give instruction in reading, penmanship, orthography, written and mental arithmetic, geography, the history of the United States, English grammar, physiology and hygiene with special reference to the effects of alcohol and drug abuse on the human system, science with special reference to the environment, and such other studies as may be prescribed by rule ((or regulation)) of the ((state board of education)) superintendent of public instruction. All teachers shall stress the importance of the cultivation of manners, the fundamental principles of honesty, honor, industry and economy, the minimum requisites for good health including the beneficial effect of physical exercise and methods to prevent exposure to and transmission of sexually transmitted diseases, and the worth of kindness to all living creatures and the land. The prevention of child abuse may be offered as part of the curriculum in the common schools.


Sec. 415. RCW 28A.230.040 and 1984 c 52 s 1 are each amended to read as follows:

Every pupil attending grades one through eight of the public schools shall receive instruction in physical education as prescribed by rule ((or regulation)) of the ((state board of education)) superintendent of public instruction: PROVIDED, That individual pupils or students may be excused on account of physical disability, religious belief, or participation in directed athletics.


Sec. 416. RCW 28A.230.050 and 1985 c 384 s 3 are each amended to read as follows:

All high schools of the state shall emphasize the work of physical education, and carry into effect all physical education requirements established by rule ((or regulation)) of the ((state board of education)) superintendent of public instruction: PROVIDED, That individual students may be excused from participating in physical education otherwise required under this section on account of physical disability, employment, or religious belief, or because of participation in directed athletics or military science and tactics or for other good cause.


Sec. 417. RCW 28A.330.100 and 1995 c 335 s 503 and 1995 c 77 s 22 are each reenacted and amended to read as follows:

Every board of directors of a school district of the first class, in addition to the general powers for directors enumerated in this title, shall have the power:

(1) To employ for a term of not exceeding three years a superintendent of schools of the district, and for cause to dismiss him or her((;)), and to fix his or her duties and compensation((.));

(2) To employ, and for cause dismiss one or more assistant superintendents and to define their duties and fix their compensation((.));


                                                                                                                            (3) To employ a business manager, attorneys, architects, inspectors of construction, superintendents of buildings and a superintendent of supplies, all of whom shall serve at the board's pleasure, and to prescribe their duties and fix their compensation((.));

                                                                                                                            (4) To employ, and for cause dismiss, supervisors of instruction and to define their duties and fix their compensation((.));

                                                                                                                            (5) To prescribe a course of study and a program of exercises which shall be consistent with the course of study prepared by the ((state board of education)) superintendent of public instruction for the use of the common schools of this state((.));

                                                                                                                            (6) To, in addition to the minimum requirements imposed by this title establish and maintain such grades and departments, including night, high, kindergarten, vocational training and, except as otherwise provided by law, industrial schools, and schools and departments for the education and training of any class or classes of youth with disabilities, as in the judgment of the board, best shall promote the interests of education in the district((.));

                                                                                                                            (7) To determine the length of time over and above one hundred eighty days that school shall be maintained: PROVIDED, That for purposes of apportionment no district shall be credited with more than one hundred and eighty-three days' attendance in any school year; and to fix the time for annual opening and closing of schools and for the daily dismissal of pupils before the regular time for closing schools((.));

                                                                                                                            (8) To maintain a shop and repair department, and to employ, and for cause dismiss, a foreman and the necessary help for the maintenance and conduct thereof((.));

                                                                                                                            (9) To provide free textbooks and supplies for all children attending school((.));

                                                                                                                            (10) To require of the officers or employees of the district to give a bond for the honest performance of their duties in such penal sum as may be fixed by the board with good and sufficient surety, and to cause the premium for all bonds required of all such officers or employees to be paid by the district: PROVIDED, That the board may, by written policy, allow that such bonds may include a deductible proviso not to exceed two percent of the officer's or employee's annual salary((.));

                                                                                                                            (11) To prohibit all secret fraternities and sororities among the students in any of the schools of the said districts((.)); and

                                                                                                                            (12) To appoint a practicing physician, resident of the school district, who shall be known as the school district medical inspector, and whose duty it shall be to decide for the board of directors all questions of sanitation and health affecting the safety and welfare of the public schools of the district who shall serve at the board's pleasure: PROVIDED, That children shall not be required to submit to vaccination against the will of their parents or guardian.


                                                                                                                            NEW SECTION. Sec. 418. RCW 28A.305.220 is recodified as a new section in chapter 28A.230 RCW.


                                                                                                                            NEW SECTION. Sec. 419. RCW 28A.305.170 is recodified as a new section in chapter 28A.300 RCW.


PART 5

SCHOOL DISTRICT BOUNDARIES


                                                                                                                            Sec. 501. RCW 28A.315.175 and 1999 c 315 s 302 are each amended to read as follows:

                                                                                                                            ((The powers and duties of the state board with respect to this chapter shall be)) The superintendent of public instruction shall:

                                                                                                                            (1) ((To)) Aid regional committees in the performance of their duties by furnishing them with plans of procedure, standards, data, maps, forms, and other necessary materials and services essential to a study and understanding of the problems of school district organization in their respective educational service districts((.)); and

(2) ((To hear appeals as provided in RCW 28A.315.205)) Carry out powers and duties of the superintendent of public instruction relating to the organization and reorganization of school districts.


Sec. 502. RCW 28A.315.195 and 2003 c 413 s 2 are each amended to read as follows:

(1) A proposed change in school district organization by transfer of territory from one school district to another may be initiated by a petition in writing presented to the educational service district superintendent:

(a) Signed by at least fifty percent plus one of the active registered voters residing in the territory proposed to be transferred; or

(b) Signed by a majority of the members of the board of directors of one of the districts affected by a proposed transfer of territory.

(2) The petition shall state the name and number of each district affected, describe the boundaries of the territory proposed to be transferred, and state the reasons for desiring the change and the number of children of school age, if any, residing in the territory.

(3) The educational service district superintendent shall not complete any transfer of territory under this section that involves ten percent or more of the common school student population of the entire district from which the transfer is proposed, unless the educational service district superintendent has first called and held a special election of the voters of the entire school district from which the transfer of territory is proposed. The purpose of the election is to afford those voters an opportunity to approve or reject the proposed transfer. A simple majority shall determine approval or rejection.

(4) The ((state board)) superintendent of public instruction may establish rules limiting the frequency of petitions that may be filed pertaining to territory included in whole or in part in a previous petition.

(5) Upon receipt of the petition, the educational service district superintendent shall notify in writing the affected districts that:

(a) Each school district board of directors, whether or not initiating a proposed transfer of territory, is required to enter into negotiations with the affected district or districts;

(b) In the case of a citizen-initiated petition, the affected districts must negotiate on the entire proposed transfer of territory;

(c) The districts have ninety calendar days in which to agree to the proposed transfer of territory;

(d) The districts may request and shall be granted by the educational service district superintendent one thirty-day extension to try to reach agreement; and

(e) Any district involved in the negotiations may at any time during the ninety-day period notify the educational service district superintendent in writing that agreement will not be possible.

(6) If the negotiating school boards cannot come to agreement about the proposed transfer of territory, the educational service district superintendent, if requested by the affected districts, shall appoint a mediator. The mediator has thirty days to work with the affected school districts to see if an agreement can be reached on the proposed transfer of territory.

(7) If the affected school districts cannot come to agreement about the proposed transfer of territory, and the districts do not request the services of a mediator or the mediator was unable to bring the districts to agreement, either district may file with the educational service district superintendent a written request for a hearing by the regional committee.

                                                                                                                            (8) If the affected school districts cannot come to agreement about the proposed transfer of territory initiated by citizen petition, and the districts do not request the services of a mediator or the mediator was unable to bring the districts to agreement, the district in which the citizens who filed the petition reside shall file with the educational service district superintendent a written request for a hearing by the regional committee, unless a majority of the citizen petitioners request otherwise.

                                                                                                                            (9) Upon receipt of a notice under subsection (7) or (8) of this section, the educational service district superintendent shall notify the chair of the regional committee in writing within ten days.

                                                                                                                            (10) Costs incurred by school districts under this section shall be reimbursed by the state from such funds as are appropriated for this purpose.


                                                                                                                            Sec. 503. RCW 28A.315.205 and 2003 c 413 s 1 are each amended to read as follows:

                                                                                                                            (1) The chair of the regional committee shall schedule a hearing on the proposed transfer of territory at a location in the educational service district within sixty calendar days of being notified under RCW 28A.315.195 (7) or (8).

                                                                                                                            (2) Within thirty calendar days of the hearing under subsection (1) of this section, or final hearing if more than one is held by the committee, the committee shall issue its written findings and decision to approve or disapprove the proposed transfer of territory. The educational service district superintendent shall transmit a copy of the committee's decision to the superintendents of the affected school districts within ten calendar days.

                                                                                                                            (3) In carrying out the purposes of RCW 28A.315.015 and in making decisions as authorized under RCW 28A.315.095(1), the regional committee shall base its judgment upon whether and to the extent the proposed change in school district organization complies with RCW 28A.315.015(2) and rules adopted by the ((state board)) superintendent of public instruction under chapter 34.05 RCW.

                                                                                                                            (4) ((State board)) The rules under subsection (3) of this section shall provide for giving consideration to all of the following:

                                                                                                                            (a) Student educational opportunities as measured by the percentage of students performing at each level of the statewide mandated assessments and data regarding student attendance, graduation, and dropout rates;

                                                                                                                            (b) The safety and welfare of pupils. For the purposes of this subsection, "safety" means freedom or protection from danger, injury, or damage and "welfare" means a positive condition or influence regarding health, character, and well-being;

                                                                                                                            (c) The history and relationship of the property affected to the students and communities affected, including, for example, inclusion within a single school district, for school attendance and corresponding tax support purposes, of entire master planned communities that were or are to be developed pursuant to an integrated commercial and residential development plan with over one thousand dwelling units;

                                                                                                                            (d) Whether or not geographic accessibility warrants a favorable consideration of a recommended change in school district organization, including remoteness or isolation of places of residence and time required to travel to and from school; and

                                                                                                                            (e) All funding sources of the affected districts, equalization among school districts of the tax burden for general fund and capital purposes through a reduction in disparities in per pupil valuation when all funding sources are considered, improvement in the economies in the administration and operation of schools, and the extent the proposed change would potentially reduce or increase the individual and aggregate transportation costs of the affected school districts.

(5)(a)(i) A petitioner or school district may appeal a decision by the regional committee to the ((state board)) superintendent of public instruction based on the claim that the regional committee failed to follow the applicable statutory and regulatory procedures or acted in an arbitrary and capricious manner. Any such appeal shall be based on the record and the appeal must be filed within thirty days of the final decision of the regional committee. The appeal shall be heard and determined by an administrative law judge in the office of administrative hearings, based on the standards in (a)(ii) of this subsection.

(ii) If the ((state board)) administrative law judge finds that all applicable procedures were not followed or that the regional committee acted in an arbitrary and capricious manner, ((it)) the administrative law judge shall refer the matter back to the regional committee with an explanation of ((the board's)) his or her findings. The regional committee shall rehear the proposal.

(iii) If the ((state board)) administrative law judge finds that all applicable procedures were followed or that the regional committee did not act in an arbitrary and capricious manner, depending on the appeal, the educational service district shall be notified and directed to implement the changes.

(b) Any school district or citizen petitioner affected by a final decision of the regional committee may seek judicial review of the committee's decision in accordance with RCW 34.05.570.


Sec. 504. RCW 28A.315.015 and 1999 c 315 s 101 are each amended to read as follows:

(1) It is the purpose of this chapter to:

(a) Incorporate into a single, comprehensive, school district organization law all essential provisions governing:

(i) The formation and establishment of new school districts;

(ii) The alteration of the boundaries of existing districts; and

(iii) The adjustment of the assets and liabilities of school districts when changes are made under this chapter; and

(b) Establish methods and procedures whereby changes in the school district system may be brought about by the people concerned and affected.

(2) It is the state's policy that decisions on proposed changes in school district organization should be made, whenever possible, by negotiated agreement between the affected school districts. If the districts cannot agree, the decision shall be made by the regional committees on school district organization, based on the committees' best judgment, taking into consideration the following factors and factors under RCW 28A.315.205:

(a) A balance of local petition requests and the needs of the statewide community at large in a manner that advances the best interest of public education in the affected school districts and communities, the educational service district, and the state;

(b) Responsibly serving all of the affected citizens and students by contributing to logical service boundaries and recognizing a changing economic pattern within the educational service districts of the state;

(c) Enhancing the educational opportunities of pupils in the territory by reducing existing disparities among the affected school districts' ability to provide operating and capital funds through an equitable adjustment of the assets and liabilities of the affected districts;


                                                                                                                            (d) Promoting a wiser use of public funds through improvement in the school district system of the educational service districts and the state; and

                                                                                                                            (e) Other criteria or considerations as may be established in rule by the ((state board of education)) superintendent of public instruction.

                                                                                                                            (3) It is neither the intent nor purpose of this chapter to apply to organizational changes and the procedure therefor relating to capital fund aid by nonhigh school districts as provided for in chapter 28A.540 RCW.


                                                                                                                            Sec. 505. RCW 28A.315.025 and 1990 c 33 s 293 are each amended to read as follows:

                                                                                                                            As used in this chapter:

                                                                                                                            (1) "Change in the organization and extent of school districts" means the formation and establishment of new school districts, the dissolution of existing school districts, the alteration of the boundaries of existing school districts, or all of them.

                                                                                                                            (2) "Regional committee" means the regional committee on school district organization created by this chapter.

                                                                                                                            (3) (("State board" means the state board of education.

                                                                                                                            (4))) "School district" means the territory under the jurisdiction of a single governing board designated and referred to as the board of directors.

                                                                                                                            (((5))) (4) "Educational service district superintendent" means the educational service district superintendent as provided for in RCW 28A.310.170 or his or her designee.


                                                                                                                            Sec. 506. RCW 28A.315.055 and 1999 c 315 s 203 are each amended to read as follows:

                                                                                                                            In case the boundaries of any of the school districts are conflicting or incorrectly described, the educational service district board of directors, after due notice and a public hearing, shall change, harmonize, and describe them and shall so certify, with a complete transcript of boundaries of all districts affected, such action to the ((state board)) superintendent of public instruction for ((its)) approval or revision. Upon receipt of notification of ((state board)) action by the superintendent of public instruction, the educational service district superintendent shall transmit to the county legislative authority of the county or counties in which the affected districts are located a complete transcript of the boundaries of all districts affected.


                                                                                                                            Sec. 507. RCW 28A.315.085 and 2005 c 497 s 405 are each amended to read as follows:

                                                                                                                            (1) The superintendent of public instruction shall furnish ((to the state board and)) to regional committees the services of employed personnel and the materials and supplies necessary to enable them to perform the duties imposed upon them by this chapter ((and)). Members shall be reimbursed ((the members thereof)) for expenses necessarily incurred by them in the performance of their duties((, such reimbursement for regional committee members to be)) in accordance with RCW 28A.315.155((, and such reimbursement for state board members to be in accordance with RCW 28A.305.011)).

                                                                                                                            (2) Costs that may be incurred by an educational service district in association with school district negotiations under RCW 28A.315.195 and supporting the regional committee under RCW 28A.315.205 shall be reimbursed by the state from such funds as are appropriated for these purposes.


                                                                                                                            Sec. 508. RCW 28A.315.125 and 1993 c 416 s 2 are each amended to read as follows:

The members of each regional committee shall be elected in the following manner:

(1) On or before the 25th day of September, 1994, and not later than the 25th day of September of every subsequent even-numbered year, each superintendent of an educational service district shall call an election to be held in each educational service district within which resides a member of a regional committee whose term of office expires on the second Monday of January next following, and shall give written notice thereof to each member of the board of directors of each school district in the educational service district. Such notice shall include instructions, and the rules ((and regulations)) established by the ((state board of education)) superintendent of public instruction for the conduct of the election. The ((state board of education)) superintendent of public instruction is ((hereby)) empowered to adopt rules pursuant to chapter 34.05 RCW which establish standards and procedures which the ((state board)) superintendent deems necessary to conduct elections pursuant to this section; to conduct run-off elections in the event an election for a position is indecisive; and to decide run-off elections which result in tie votes, in a fair and orderly manner.

(2) Candidates for membership on a regional committee shall file a declaration of candidacy with the superintendent of the educational service district wherein they reside. Declarations of candidacy may be filed by person or by mail not earlier than the 1st day of October, and not later than the 15th day of October of each even-numbered year. The superintendent may not accept any declaration of candidacy that is not on file in his or her office or not postmarked before the 16th day of October, or if not postmarked or the postmark is not legible, if received by mail after the 20th day of October of each even-numbered year.

(3) Each member of the regional committee shall be elected by a majority of the votes cast for all candidates for the position by the members of the boards of directors of school districts in the educational service district. All votes shall be cast by mail ballot addressed to the superintendent of the educational service district wherein the school director resides. No votes shall be accepted for counting if postmarked after the 16th day of November or if not postmarked or the postmark is not legible, if received by mail after the 21st day of November of each even-numbered year. An election board comprised of three persons appointed by the board of the educational service district shall count and tally the votes not later than the 25th day of November or the next business day if the 25th falls on a Saturday, Sunday, or legal holiday of each even-numbered year. Each vote cast by a school director shall be recorded as one vote. Within ten days following the count of votes, the educational service district superintendent shall certify to the superintendent of public instruction the name or names of the person(s) elected to be members of the regional committee.

(4) In the event of a change in the number of educational service districts or in the number of educational service district board members pursuant to chapter 28A.310 RCW a new regional committee shall be elected for each affected educational service district at the next election conducted pursuant to this section. Those persons who were serving on a regional committee within an educational service district affected by a change in the number of districts or board members shall continue to constitute the regional committee for the educational service district within which they are registered to vote until the majority of a new board has been elected and certified.

(5) No member of a regional committee shall continue to serve thereon if he or she ceases to be a registered voter of the educational service district board member district or if he or she is absent from three consecutive meetings of the committee without an excuse acceptable to the committee.


                                                                                                                            Sec. 509. RCW 28A.315.185 and 1999 c 315 s 303 are each amended to read as follows:

                                                                                                                            To the extent funds are appropriated, the superintendent of public instruction, in cooperation with the educational service districts and the Washington state school directors' association, shall conduct an annual training meeting for the regional committees, ((state board members,)) educational service district superintendents, and local school district superintendents and boards of directors. Training may also be provided upon request.


PART 6

EDUCATIONAL SERVICE DISTRICTS


                                                                                                                            Sec. 601. RCW 28A.305.210 and 2005 c 518 s 913 are each amended to read as follows:

                                                                                                                            (1) ((The state board of education, by rule or regulation, may require the assistance of educational service district boards and/or superintendents in the performance of any duty, authority, or power imposed upon or granted to the state board of education by law, upon such terms and conditions as the state board of education shall establish. Such authority to assist the state board of education shall be limited to the service function of information collection and dissemination and the attestment to the accuracy and completeness of submitted information.

                                                                                                                            (2))) During the 2005-2007 biennium until the effective date of this act, educational service districts may, at the request of the state board of education, receive and screen applications for school accreditation, conduct school accreditation site visits pursuant to state board of education rules, and submit to the state board of education postsite visit recommendations for school accreditation. The educational service districts may assess a cooperative service fee to recover actual plus reasonable indirect costs for the purposes of this subsection.

(2) This section expires July 1, 2007.


                                                                                                                            Sec. 602. RCW 28A.310.080 and 1977 ex.s. c 283 s 15 are each amended to read as follows:

                                                                                                                            ((On or before the twenty-fifth day of August, 1978, and)) Not later than the twenty-fifth day of August of every ((subsequent)) even-numbered year, the ((secretary to the state board of education)) superintendent of public instruction shall call an election to be held in each educational service district within which resides a member of the board of the educational service district whose term of office expires on the second Monday of January next following, and shall give written notice thereof to each member of the board of directors of each school district in such educational service district. Such notice shall include instructions((,)) and rules((, and regulations)) established by the ((state board of education)) superintendent of public instruction for the conduct of the election.


                                                                                                                            Sec. 603. RCW 28A.310.030 and 1990 c 33 s 271 are each amended to read as follows:

                                                                                                                            Except as otherwise provided in this chapter, in each educational service district there shall be an educational service district board consisting of seven members elected by the school directors of the educational service district, one from each of seven educational service district board-member districts. Board-member districts in districts reorganized under RCW 28A.310.020, or as provided for in RCW 28A.310.120 and under this section, shall be initially determined by the state board of education. If a reorganization pursuant to RCW 28A.310.020 places the residence of a board member into another or newly created educational service district, such member shall serve on the board of the educational service district of residence and at the next election called by the ((secretary to the state board of education)) superintendent of public instruction pursuant to RCW 28A.310.080 a new seven member board shall be elected. If the redrawing of board-member district boundaries pursuant to this chapter shall cause the resident board-member district of two or more board members to coincide, such board members shall continue to serve on the board and at the next election called by the ((secretary to the state board of education)) superintendent of public instruction a new board shall be elected. The board-member districts shall be arranged so far as practicable on a basis of equal population, with consideration being given existing board members of existing educational service district boards. Each educational service district board member shall be elected by the school directors of each school district within the educational service district. Beginning in 1971 and every ten years thereafter, educational service district boards shall review and, if necessary, shall change the boundaries of board-member districts so as to provide so far as practicable equal representation according to population of such board-member districts and to conform to school district boundary changes: PROVIDED, That all board-member district boundaries, to the extent necessary to conform with this chapter, shall be immediately redrawn for the purposes of the next election called by the ((secretary to the state board of education)) superintendent of public instruction following any reorganization pursuant to this chapter. Such district board, if failing to make the necessary changes prior to June 1st of the appropriate year, shall refer for settlement questions on board-member district boundaries to the ((state board of education)) office of the superintendent of public instruction, which, after a public hearing, shall decide such questions.


Sec. 604. RCW 28A.310.050 and 1977 ex.s. c 283 s 19 are each amended to read as follows:

Any educational service district board may elect by resolution of the board to increase the board member size to nine board members. In such case positions number eight and nine shall be filled at the next election called by the ((secretary to the state board of education)) superintendent of public instruction, position numbered eight to be for a term of two years, position numbered nine to be for a term of four years. Thereafter the terms for such positions shall be for four years.


Sec. 605. RCW 28A.310.060 and 1977 ex.s. c 283 s 20 are each amended to read as follows:

The term of every educational service district board member shall begin on the second Monday in January next following the election at which he or she was elected: PROVIDED, That a person elected to less than a full term pursuant to this section shall take office as soon as the election returns have been certified and he or she has qualified. In the event of a vacancy in the board from any cause, such vacancy shall be filled by appointment of a person from the same board-member district by the educational service district board. In the event that there are more than three vacancies in a seven-member board or four vacancies in a nine-member board, the ((state board of education)) superintendent of public instruction shall fill by appointment sufficient vacancies so that there shall be a quorum of the board serving. Each appointed board member shall serve until his or her successor has been elected at the next election called by the ((secretary to the state board of education)) superintendent of public instruction and has qualified.


                                                                                                                            Sec. 606. RCW 28A.310.090 and 1977 ex.s. c 283 s 16 are each amended to read as follows:

                                                                                                                            Candidates for membership on an educational service district board shall file declarations of candidacy with the ((secretary to the state board of education)) superintendent of public instruction on forms prepared by the ((secretary)) superintendent. Declarations of candidacy may be filed by person or by mail not earlier than the first day of September, nor later than the sixteenth day of September. The ((secretary to the state board of education)) superintendent may not accept any declaration of candidacy that is not on file in his or her office or is not postmarked before the seventeenth day of September.


                                                                                                                            Sec. 607. RCW 28A.310.100 and 1980 c 179 s 7 are each amended to read as follows:

                                                                                                                            Each member of an educational service district board shall be elected by a majority of the votes cast at the election for all candidates for the position. All votes shall be cast by mail addressed to the ((secretary to the state board of education)) superintendent of public instruction and no votes shall be accepted for counting if postmarked after the sixteenth day of October or if not postmarked or the postmark is not legible, if received by mail after the twenty-first day of October following the call of the election. The ((secretary to the state board of education)) superintendent of public instruction and an election board comprised of three persons appointed by the ((state board of education)) superintendent shall count and tally the votes not later than the twenty-fifth day of October in the following manner: Each vote cast by a school director shall be accorded as one vote. If no candidate receives a majority of the votes cast, then, not later than the first day of November, the ((secretary to the state board of education)) superintendent of public instruction shall call a second election to be conducted in the same manner and at which the candidates shall be the two candidates receiving the highest number of votes cast. No vote cast at such second election shall be received for counting if postmarked after the sixteenth day of November or if not postmarked or the postmark is not legible, if received by mail after the twenty-first day of November and the votes shall be counted as hereinabove provided on the twenty-fifth day of November. The candidate receiving a majority of votes at any such second election shall be declared elected. In the event of a tie in such second election, the candidate elected shall be determined by a chance drawing of a nature established by the ((secretary to the state board of education)) superintendent of public instruction. Within ten days following the count of votes in an election at which a member of an educational service district board is elected, the ((secretary to the state board of education)) superintendent of public instruction shall certify to the county auditor of the headquarters county of the educational service district the name or names of the persons elected to be members of the educational service district board.


                                                                                                                            Sec. 608. RCW 28A.310.140 and 1990 c 33 s 274 are each amended to read as follows:

                                                                                                                            Every school district must be included entirely within a single educational service district. If the boundaries of any school district within an educational service district are changed in any manner so as to extend the school district beyond the boundaries of that educational service district, the ((state board)) superintendent of public instruction shall change the boundaries of the educational service districts so affected in a manner consistent with the purposes of RCW 28A.310.010 and this section.


Sec. 609. RCW 28A.310.150 and 1990 c 33 s 275 are each amended to read as follows:

Every candidate for membership on a educational service district board shall be a registered voter and a resident of the board-member district for which such candidate files. On or before the date for taking office, every member shall make an oath or affirmation to support the Constitution of the United States and the state of Washington and to faithfully discharge the duties of the office according to the best of such member's ability. The members of the board shall not be required to give bond unless so directed by the ((state board of education)) superintendent of public instruction. At the first meeting of newly elected members and after the qualification for office of the newly elected members, each educational service district board shall reorganize by electing a chair and a vice chair. A majority of all of the members of the board shall constitute a quorum.


Sec. 610. RCW 28A.310.200 and 2001 c 143 s 1 are each amended to read as follows:

In addition to other powers and duties as provided by law, every educational service district board shall:

(1) Approve the budgets of the educational service district in accordance with the procedures provided for in this chapter((.));

(2) Meet regularly according to the schedule adopted at the organization meeting and in special session upon the call of the chair or a majority of the board((.));

(3) Approve the selection of educational service district personnel and clerical staff as provided in RCW 28A.310.230((.));

(4) Fix the amount of and approve the bonds for those educational service district employees designated by the board as being in need of bonding((.));

(5) Keep in the educational service district office a full and correct transcript of the boundaries of each school district within the educational service district((.));

(6) Acquire by borrowing funds or by purchase, lease, devise, bequest, and gift and otherwise contract for real and personal property necessary for the operation of the educational service district and to the execution of the duties of the board and superintendent thereof and sell, lease, or otherwise dispose of that property not necessary for district purposes. No real property shall be acquired or alienated without the prior approval of the ((state board of education)) superintendent of public instruction and the acquisition or alienation of all such property shall be subject to such provisions as the ((board)) superintendent may establish. When borrowing funds for the purpose of acquiring property, the educational service district board shall pledge as collateral the property to be acquired. Borrowing shall be evidenced by a note or other instrument between the district and the lender((.));

(7) Under RCW 28A.310.010, upon the written request of the board of directors of a local school district or districts served by the educational service district, the educational service district board of directors may provide cooperative and informational services not in conflict with other law that provide for the development and implementation of programs, activities, services, or practices that support the education of preschool through twelfth grade students in the public schools or that support the effective, efficient, or safe management and operation of the school district or districts served by the educational service district((.));

(8) Adopt such bylaws and rules ((and regulations)) for its own operation as it deems necessary or appropriate((.)); and

(9) Enter into contracts, including contracts with common and educational service districts and the school for the deaf and the school for the blind for the joint financing of cooperative service programs conducted pursuant to RCW 28A.310.180(3), and employ consultants and legal counsel relating to any of the duties, functions, and powers of the educational service districts.


                                                                                                                            Sec. 611. RCW 28A.310.310 and 1990 c 33 s 284 are each amended to read as follows:

                                                                                                                            The educational service district board shall designate the headquarters office of the educational service district. Educational service districts shall provide for their own office space, heating, contents insurance, electricity, and custodial services, which may be obtained through contracting with any board of county commissioners. Official records of the educational service district board and superintendent, including each of the county superintendents abolished by chapter 176, Laws of 1969 ex. sess., shall be kept by the educational service district superintendent. Whenever the boundaries of any of the educational service districts are reorganized pursuant to RCW 28A.310.020, the ((state board of education)) superintendent of public instruction shall supervise the transferral of such records so that each educational service district superintendent shall receive those records relating to school districts within the appropriate educational service district.


                                                                                                                            Sec. 612. RCW 28A.323.020 and 1985 c 385 s 25 are each amended to read as follows:

                                                                                                                            The duties in this chapter imposed upon and required to be performed by a regional committee and by an educational service district superintendent in connection with a change in the organization and extent of school districts and/or with the adjustment of the assets and liabilities of school districts and with all matters related to such change or adjustment whenever territory lying in a single educational service district is involved shall be performed jointly by the regional committees and by the superintendents of the several educational service districts as required whenever territory lying in more than one educational service district is involved in a proposed change in the organization and extent of school districts: PROVIDED, That a regional committee may designate three of its members, or two of its members and the educational service district superintendent, as a subcommittee to serve in lieu of the whole committee, but action by a subcommittee shall not be binding unless approved by a majority of the regional committee. Proposals for changes in the organization and extent of school districts and proposed terms of adjustment of assets and liabilities thus prepared and approved shall be submitted to the ((state board)) superintendent of public instruction by the regional committee of the educational service district in which is located the part of the proposed or enlarged district having the largest number of common school pupils residing therein.


                                                                                                                            Sec. 613. RCW 28A.323.040 and 1973 c 47 s 3 are each amended to read as follows:

                                                                                                                            For all purposes essential to the maintenance, operation, and administration of the schools of a district, including the apportionment of current state and county school funds, the county in which a joint school district shall be considered as belonging shall be as designated by the ((state board of education)) superintendent of public instruction. Prior to making such designation, the ((state board of education)) superintendent of public instruction shall hold at least one public hearing on the matter, at which time the recommendation of the joint school district shall be presented and, in addition to such recommendation, the ((state board)) superintendent shall consider the following prior to its designation:

                                                                                                                            (1) Service needs of such district;

(2) Availability of services;

(3) Geographic location of district and servicing agencies; and

(4) Relationship to contiguous school districts.


Sec. 614. RCW 29A.24.070 and 2005 c 221 s 1 are each amended to read as follows:

Declarations of candidacy shall be filed with the following filing officers:

(1) The secretary of state for declarations of candidacy for statewide offices, United States senate, and United States house of representatives;

(2) The secretary of state for declarations of candidacy for the state legislature, the court of appeals, and the superior court when the candidate is seeking office in a district comprised of voters from two or more counties. The secretary of state and the county auditor may accept declarations of candidacy for candidates for the state legislature, the court of appeals, and the superior court when the candidate is seeking office in a district comprised of voters from one county;

(3) The county auditor for all other offices. For any nonpartisan office, other than judicial offices and school director in joint districts, where voters from a district comprising more than one county vote upon the candidates, a declaration of candidacy shall be filed with the county auditor of the county in which a majority of the registered voters of the district reside. For school directors in joint school districts, the declaration of candidacy shall be filed with the county auditor of the county designated by the ((state board of education)) superintendent of public instruction as the county to which the joint school district is considered as belonging under RCW 28A.323.040;

(4) For all other purposes of this title, a declaration of candidacy for the state legislature, the court of appeals, and the superior court filed with the secretary of state shall be deemed to have been filed with the county auditor when the candidate is seeking office in a district composed of voters from one county.

Each official with whom declarations of candidacy are filed under this section, within one business day following the closing of the applicable filing period, shall transmit to the public disclosure commission the information required in RCW 29A.24.031 (1) through (4) for each declaration of candidacy filed in his or her office during such filing period or a list containing the name of each candidate who files such a declaration in his or her office during such filing period together with a precise identification of the position sought by each such candidate and the date on which each such declaration was filed. Such official, within three days following his or her receipt of any letter withdrawing a person's name as a candidate, shall also forward a copy of such withdrawal letter to the public disclosure commission.


Sec. 615. RCW 84.09.037 and 1990 c 33 s 597 are each amended to read as follows:

Each school district affected by a transfer of territory from one school district to another school district under chapter 28A.315 RCW shall retain its preexisting boundaries for the purpose of the collection of excess tax levies authorized under RCW 84.52.053 before the effective date of the transfer, for such tax collection years and for such excess tax levies as the ((state board of education)) superintendent of public instruction may approve and order that the transferred territory shall either be subject to or relieved of such excess levies, as the case may be. For the purpose of all other excess tax levies previously authorized under chapter 84.52 RCW and all excess tax levies authorized under RCW 84.52.053 subsequent to the effective date of a transfer of territory, the boundaries of the affected school districts shall be modified to recognize the transfer of territory subject to RCW 84.09.030.


PART 7

STUDENTS


                                                                                                                            Sec. 701. RCW 28A.305.160 and 1996 c 321 s 2 are each amended to read as follows:

                                                                                                                            (1) The ((state board of education)) superintendent of public instruction shall adopt and distribute to all school districts lawful and reasonable rules prescribing the substantive and procedural due process guarantees of pupils in the common schools. Such rules shall authorize a school district to use informal due process procedures in connection with the short-term suspension of students to the extent constitutionally permissible: PROVIDED, That the ((state board)) superintendent of public instruction deems the interest of students to be adequately protected. When a student suspension or expulsion is appealed, the rules shall authorize a school district to impose the suspension or expulsion temporarily after an initial hearing for no more than ten consecutive school days or until the appeal is decided, whichever is earlier. Any days that the student is temporarily suspended or expelled before the appeal is decided shall be applied to the term of the student suspension or expulsion and shall not limit or extend the term of the student suspension or expulsion.

                                                                                                                            (2) Short-term suspension procedures may be used for suspensions of students up to and including, ten consecutive school days.


                                                                                                                            Sec. 702. RCW 28A.150.300 and 1993 c 68 s 1 are each amended to read as follows:

                                                                                                                            The use of corporal punishment in the common schools is prohibited. The ((state board of education, in consultation with the)) superintendent of public instruction((,)) shall develop and adopt a policy prohibiting the use of corporal punishment in the common schools. The policy shall be adopted ((by the state board of education no later than February 1, 1994,)) and ((shall take effect)) implemented in all school districts ((September 1, 1994)).


                                                                                                                            Sec. 703. RCW 28A.225.160 and 1999 c 348 s 5 are each amended to read as follows:

                                                                                                                            Except as otherwise provided by law, it is the general policy of the state that the common schools shall be open to the admission of all persons who are five years of age and less than twenty-one years residing in that school district. Except as otherwise provided by law or rules adopted by the ((state board of education)) superintendent of public instruction, districts may establish uniform entry qualifications, including but not limited to birth date requirements, for admission to kindergarten and first grade programs of the common schools. Such rules may provide for exceptions based upon the ability, or the need, or both, of an individual student. For the purpose of complying with any rule adopted by the ((state board of education which)) superintendent of public instruction that authorizes a preadmission screening process as a prerequisite to granting exceptions to the uniform entry qualifications, a school district may collect fees to cover expenses incurred in the administration of any preadmission screening process: PROVIDED, That in so establishing such fee or fees, the district shall adopt regulations for waiving and reducing such fees in the cases of those persons whose families, by reason of their low income, would have difficulty in paying the entire amount of such fees.


NEW SECTION. Sec. 704. A new section is added to chapter 28A.300 RCW to read as follows:

The superintendent of public instruction shall adopt rules relating to pupil tests and records.


Sec. 705. RCW 28A.300.150 and 1994 c 245 s 8 are each amended to read as follows:

The superintendent of public instruction shall collect and disseminate to school districts information on child abuse and neglect prevention curriculum and shall adopt rules dealing with the prevention of child abuse for purposes of curriculum use in the common schools. The superintendent of public instruction and the departments of social and health services and community, trade, and economic development shall share relevant information.


Sec. 706. RCW 28A.600.020 and 1997 c 266 s 11 are each amended to read as follows:

(1) The rules adopted pursuant to RCW 28A.600.010 shall be interpreted to ((insure)) ensure that the optimum learning atmosphere of the classroom is maintained, and that the highest consideration is given to the judgment of qualified certificated educators regarding conditions necessary to maintain the optimum learning atmosphere.

(2) Any student who creates a disruption of the educational process in violation of the building disciplinary standards while under a teacher's immediate supervision may be excluded by the teacher from his or her individual classroom and instructional or activity area for all or any portion of the balance of the school day, or up to the following two days, or until the principal or designee and teacher have conferred, whichever occurs first. Except in emergency circumstances, the teacher first must attempt one or more alternative forms of corrective action. In no event without the consent of the teacher may an excluded student return to the class during the balance of that class or activity period or up to the following two days, or until the principal or his or her designee and the teacher have conferred.

(3) In order to preserve a beneficial learning environment for all students and to maintain good order and discipline in each classroom, every school district board of directors shall provide that written procedures are developed for administering discipline at each school within the district. Such procedures shall be developed with the participation of parents and the community, and shall provide that the teacher, principal or designee, and other authorities designated by the board of directors, make every reasonable attempt to involve the parent or guardian and the student in the resolution of student discipline problems. Such procedures shall provide that students may be excluded from their individual classes or activities for periods of time in excess of that provided in subsection (2) of this section if such students have repeatedly disrupted the learning of other students. The procedures must be consistent with the rules of the ((state board of education)) superintendent of public instruction and must provide for early involvement of parents in attempts to improve the student's behavior.

(4) The procedures shall assure, pursuant to RCW 28A.400.110, that all staff work cooperatively toward consistent enforcement of proper student behavior throughout each school as well as within each classroom.

(5) A principal shall consider imposing long-term suspension or expulsion as a sanction when deciding the appropriate disciplinary action for a student who, after July 27, 1997:

(a) Engages in two or more violations within a three-year period of RCW 9A.46.120, 28A.320.135, 28A.600.455, 28A.600.460, 28A.635.020, 28A.600.020, 28A.635.060, 9.41.280, or 28A.320.140; or

                                                                                                                            (b) Engages in one or more of the offenses listed in RCW 13.04.155.

                                                                                                                            The principal shall communicate the disciplinary action taken by the principal to the school personnel who referred the student to the principal for disciplinary action.


                                                                                                                            Sec. 707. RCW 28A.600.030 and 1990 c 33 s 498 are each amended to read as follows:

                                                                                                                            Each school district board of directors may establish student grading policies which permit teachers to consider a student's attendance in determining the student's overall grade or deciding whether the student should be granted or denied credit. Such policies shall take into consideration the circumstances pertaining to the student's inability to attend school. However, no policy shall be adopted whereby a grade shall be reduced or credit shall be denied for disciplinary reasons only, rather than for academic reasons, unless due process of law is provided as set forth by the ((state board of education)) superintendent of public instruction under RCW 28A.305.160 (as recodified by this act).


                                                                                                                            NEW SECTION. Sec. 708. RCW 28A.305.160 is recodified as a new section in chapter 28A.600 RCW.


PART 8

TRANSFER OF PROFESSIONAL EDUCATOR STANDARDS BOARD DUTIES


                                                                                                                            Sec. 801. RCW 18.35.020 and 2005 c 45 s 2 are each amended to read as follows:

                                                                                                                            (1) No person shall engage in the fitting and dispensing of hearing instruments or imply or represent that he or she is engaged in the fitting and dispensing of hearing instruments unless he or she is a licensed hearing instrument fitter/dispenser or a licensed audiologist or holds an interim permit issued by the department as provided in this chapter and is an owner or employee of an establishment that is bonded as provided by RCW 18.35.240. The owner or manager of an establishment that dispenses hearing instruments is responsible under this chapter for all transactions made in the establishment name or conducted on its premises by agents or persons employed by the establishment engaged in fitting and dispensing of hearing instruments. Every establishment that fits and dispenses shall have in its employ at least one licensed hearing instrument fitter/dispenser or licensed audiologist at all times, and shall annually submit proof that all testing equipment at that establishment that is required by the board to be calibrated has been properly calibrated.

                                                                                                                            (2) Effective January 1, 2003, no person shall engage in the practice of audiology or imply or represent that he or she is engaged in the practice of audiology unless he or she is a licensed audiologist or holds an audiology interim permit issued by the department as provided in this chapter. Audiologists who are certified as educational staff associates by the ((state board of education)) Washington professional educator standards board are excluded unless they elect to become licensed under this chapter. However, a person certified by the state board of education as an educational staff associate who practices outside the school setting must be a licensed audiologist.

                                                                                                                            (3) Effective January 1, 2003, no person shall engage in the practice of speech-language pathology or imply or represent that he or she is engaged in the practice of speech-language pathology unless he or she is a licensed speech-language pathologist or holds a speech-language pathology interim permit issued by the department as provided in this chapter. Speech-language pathologists who are certified as educational staff associates by the state board of education are excluded unless they elect to become licensed under this chapter. However, a person certified by the state board of education as an educational staff associate who practices outside the school setting must be a licensed speech-language pathologist.


Sec. 802. RCW 18.35.195 and 2005 c 45 s 4 are each amended to read as follows:

(1) This chapter shall not apply to military or federal government employees.

(2) This chapter does not prohibit or regulate:

(a) Fitting or dispensing by students enrolled in a board-approved program who are directly supervised by a licensed hearing instrument fitter/dispenser, a licensed audiologist under the provisions of this chapter, or an instructor at a two-year hearing instrument fitter/dispenser degree program that is approved by the board;

(b) Hearing instrument fitter/dispensers, speech-language pathologists, or audiologists of other states, territories, or countries, or the District of Columbia while appearing as clinicians of bona fide educational seminars sponsored by speech-language pathology, audiology, hearing instrument fitter/dispenser, medical, or other healing art professional associations so long as such activities do not go beyond the scope of practice defined by this chapter; and

(c) The practice of audiology or speech-language pathology by persons certified by the ((state board of education)) Washington professional educator standards board as educational staff associates, except for those persons electing to be licensed under this chapter. However, a person certified by the ((state)) board ((of education)) as an educational staff associate who practices outside the school setting must be a licensed audiologist or licensed speech-language pathologist.


Sec. 803. RCW 18.83.200 and 1986 c 27 s 10 are each amended to read as follows:

This chapter shall not apply to:

(1) Any person teaching, lecturing, consulting, or engaging in research in psychology but only insofar as such activities are performed as a part of or are dependent upon a position in a college or university in the state of Washington.

(2) Any person who holds a valid school psychologist credential from the Washington ((state board of education)) professional educator standards board but only when such a person is practicing psychology in the course of his or her employment.

(3) Any person employed by a local, state, or federal government agency whose psychologists must qualify for employment under federal or state certification or civil service regulations; but only at those times when that person is carrying out the functions of his or her employment.

(4) Any person who must qualify under the employment requirements of a business or industry and who is employed by a business or industry which is not engaged in offering psychological services to the public, but only when such person is carrying out the functions of his or her employment: PROVIDED, That no person exempt from licensing under this subsection shall engage in the clinical practice of psychology.

(5) Any person who is a student of psychology, psychological intern, or resident in psychology preparing for the profession of psychology under supervision in a training institution or facilities and who is designated by the title such as "psychological trainee," "psychology student," which thereby indicates his or her training status.

                                                                                                                            (6) Any person who has received a doctoral degree from an accredited institution of higher learning with an adequate major in sociology or social psychology as determined by the board and who has passed comprehensive examinations in the field of social psychology as part of the requirements for the doctoral degree. Such persons may use the title "social psychologist" provided that they file a statement of their education with the board.


                                                                                                                            Sec. 804. RCW 28A.625.360 and 1990 1st ex.s. c 10 s 2 are each amended to read as follows:

                                                                                                                            (1) The ((state board of education)) professional educator standards board shall establish an annual award program for excellence in teacher preparation to recognize higher education teacher educators for their leadership, contributions, and commitment to education.

                                                                                                                            (2) The program shall recognize annually one teacher preparation faculty member from one of the teacher preparation programs approved by the ((state board of education)) professional educator standards board.


                                                                                                                            Sec. 805. RCW 28A.225.330 and 1999 c 198 s 3 are each amended to read as follows:

                                                                                                                            (1) When enrolling a student who has attended school in another school district, the school enrolling the student may request the parent and the student to briefly indicate in writing whether or not the student has:

                                                                                                                            (a) Any history of placement in special educational programs;

                                                                                                                            (b) Any past, current, or pending disciplinary action;

                                                                                                                            (c) Any history of violent behavior, or behavior listed in RCW 13.04.155;

                                                                                                                            (d) Any unpaid fines or fees imposed by other schools; and

                                                                                                                            (e) Any health conditions affecting the student's educational needs.

                                                                                                                            (2) The school enrolling the student shall request the school the student previously attended to send the student's permanent record including records of disciplinary action, history of violent behavior or behavior listed in RCW 13.04.155, attendance, immunization records, and academic performance. If the student has not paid a fine or fee under RCW 28A.635.060, or tuition, fees, or fines at approved private schools the school may withhold the student's official transcript, but shall transmit information about the student's academic performance, special placement, immunization records, records of disciplinary action, and history of violent behavior or behavior listed in RCW 13.04.155. If the official transcript is not sent due to unpaid tuition, fees, or fines, the enrolling school shall notify both the student and parent or guardian that the official transcript will not be sent until the obligation is met, and failure to have an official transcript may result in exclusion from extracurricular activities or failure to graduate.

                                                                                                                            (3) If information is requested under subsection (2) of this section, the information shall be transmitted within two school days after receiving the request and the records shall be sent as soon as possible. Any school district or district employee who releases the information in compliance with this section is immune from civil liability for damages unless it is shown that the school district employee acted with gross negligence or in bad faith. The ((state board of education)) professional educator standards board shall provide by rule for the discipline under chapter 28A.410 RCW of a school principal or other chief administrator of a public school building who fails to make a good faith effort to assure compliance with this subsection.

(4) Any school district or district employee who releases the information in compliance with federal and state law is immune from civil liability for damages unless it is shown that the school district or district employee acted with gross negligence or in bad faith.

(5) When a school receives information under this section or RCW 13.40.215 that a student has a history of disciplinary actions, criminal or violent behavior, or other behavior that indicates the student could be a threat to the safety of educational staff or other students, the school shall provide this information to the student's teachers and security personnel.


Sec. 806. RCW 28A.405.110 and 1985 c 420 s 1 are each amended to read as follows:

The legislature recognizes the importance of teachers in the educational system. Teachers are the fundamental element in assuring a quality education for the state's and the nation's children. Teachers, through their direct contact with children, have a great impact on the development of the child. The legislature finds that this important role of the teacher requires an assurance that teachers are as successful as possible in attaining the goal of a well-educated society. The legislature finds, therefore, that the evaluation of those persons seeking to enter the teaching profession is no less important than the evaluation of those persons currently teaching. The evaluation of persons seeking teaching credentials should be strenuous while making accommodations uniquely appropriate to the applicants. Strenuous teacher training and preparation should be complemented by examinations of prospective teachers prior to candidates being granted official certification by the ((state board of education)) professional educator standards board. Teacher preparation program entrance evaluations, teacher training, teacher preparation program exit examinations, official certification, in-service training, and ongoing evaluations of individual progress and professional growth are all part of developing and maintaining a strong precertification and postcertification professional education system.

The legislature further finds that an evaluation system for teachers has the following elements, goals, and objectives: (1) An evaluation system must be meaningful, helpful, and objective; (2) an evaluation system must encourage improvements in teaching skills, techniques, and abilities by identifying areas needing improvement; (3) an evaluation system must provide a mechanism to make meaningful distinctions among teachers and to acknowledge, recognize, and encourage superior teaching performance; and (4) an evaluation system must encourage respect in the evaluation process by the persons conducting the evaluations and the persons subject to the evaluations through recognizing the importance of objective standards and minimizing subjectivity.


Sec. 807. RCW 28A.415.010 and 1991 c 285 s 1 are each amended to read as follows:

It shall be the responsibility of each educational service district board to establish a center for the improvement of teaching. The center shall administer, coordinate, and act as fiscal agent for such programs related to the recruitment and training of certificated and classified K-12 education personnel as may be delegated to the center by the superintendent of public instruction under RCW 28A.310.470((, or the state board of education under RCW 28A.310.480)). To assist in these activities, each educational service district board shall establish an improvement of teaching coordinating council to include, at a minimum, representatives as specified in RCW 28A.415.040. An existing in-service training task force, established pursuant to RCW 28A.415.040, may serve as the improvement of teaching coordinating council. The educational service district board shall ensure coordination of programs established pursuant to RCW 28A.415.030, 28A.410.060, and 28A.415.250.

                                                                                                                            The educational service district board may arrange each year for the holding of one or more teachers' institutes and/or workshops for professional staff preparation and in-service training in such manner and at such time as the board believes will be of benefit to the teachers and other professional staff of school districts within the educational service district and shall comply with rules ((and regulations of the state board of education)) of the professional educator standards board pursuant to RCW 28A.410.060 or the superintendent of public instruction ((or state board of education)) pursuant to RCW 28A.415.250. The board may provide such additional means of teacher and other professional staff preparation and in-service training as it may deem necessary or appropriate and there shall be a proper charge against the educational service district general expense fund when approved by the educational service district board.

                                                                                                                            Educational service district boards of contiguous educational service districts, by mutual arrangements, may hold joint institutes and/or workshops, the expenses to be shared in proportion to the numbers of certificated personnel as shown by the last annual reports of the educational service districts holding such joint institutes or workshops.

                                                                                                                            In local school districts employing more than one hundred teachers and other professional staff, the school district superintendent may hold a teachers' institute of one or more days in such district, said institute when so held by the school district superintendent to be in all respects governed by the provisions of this title and ((state board of education)) rules ((and regulations)) relating to teachers' institutes held by educational service district superintendents.


                                                                                                                            Sec. 808. RCW 28A.415.020 and 1995 c 284 s 2 are each amended to read as follows:

                                                                                                                            (1) Certificated personnel shall receive for each ten clock hours of approved in-service training attended the equivalent of a one credit college quarter course on the salary schedule developed by the legislative evaluation and accountability program committee.

                                                                                                                            (2) Certificated personnel shall receive for each ten clock hours of approved continuing education earned, as continuing education is defined by rule adopted by the ((state board of education))professional educator standards board, the equivalent of a one credit college quarter course on the salary schedule developed by the legislative evaluation and accountability program committee.

                                                                                                                            (3) Certificated personnel shall receive for each forty clock hours of participation in an approved internship with a business, an industry, or government, as an internship is defined by rule of the ((state board of education)) professional educator standards board in accordance with RCW 28A.415.025, the equivalent of a one credit college quarter course on the salary schedule developed by the legislative evaluation and accountability program committee.

                                                                                                                            (4) An approved in-service training program shall be a program approved by a school district board of directors, which meet standards adopted by the ((state board of education)) professional educator standards board, and the development of said program has been participated in by an in-service training task force whose membership is the same as provided under RCW 28A.415.040, or a program offered by an education agency approved to provide in-service for the purposes of continuing education as provided for under rules adopted by the ((state board of education)) professional educator standards board, or both.

(5) Clock hours eligible for application to the salary schedule developed by the legislative evaluation and accountability program committee as described in subsections (1) and (2) of this section, shall be those hours acquired after August 31, 1987. Clock hours eligible for application to the salary schedule as described in subsection (3) of this section shall be those hours acquired after December 31, 1995.


Sec. 809. RCW 28A.415.024 and 2005 c 461 s 1 are each amended to read as follows:

(1) All credits earned in furtherance of degrees earned by certificated staff, that are used to increase earnings on the salary schedule consistent with RCW 28A.415.023, must be obtained from an educational institution accredited by an accrediting association recognized by rule of the ((state board of education)) professional educator standards board.

(2) The office of the superintendent of public instruction shall verify for school districts the accreditation status of educational institutions granting degrees that are used by certificated staff to increase earnings on the salary schedule consistent with RCW 28A.415.023.

(3) The office of the superintendent of public instruction shall provide school districts with training and additional resources to ensure they can verify that degrees earned by certificated staff, that are used to increase earnings on the salary schedule consistent with RCW 28A.415.023, are obtained from an educational institution accredited by an accrediting association recognized by rule of the ((state board of education)) professional educator standards board.

(4)(a) No school district may submit degree information before there has been verification of accreditation under subsection (3) of this section.

(b) Certificated staff who submit degrees received from an unaccredited educational institution for the purposes of receiving a salary increase shall be fined three hundred dollars. The fine shall be paid to the office of the superintendent of public instruction and used for costs of administering this section.

(c) In addition to the fine in (b) of this subsection, certificated staff who receive salary increases based upon degrees earned from educational institutions that have been verified to be unaccredited must reimburse the district for any compensation received based on these degrees.


Sec. 810. RCW 28A.415.025 and 1995 c 284 s 3 are each amended to read as follows:

The ((state board of education)) professional educator standards board shall establish rules for awarding clock hours for participation of certificated personnel in internships with business, industry, or government. To receive clock hours for an internship, the individual must demonstrate that the internship will provide beneficial skills and knowledge in an area directly related to his or her current assignment, or to his or her assignment for the following school year. An individual may not receive more than the equivalent of two college quarter credits for internships during a calendar-year period. The total number of credits for internships that an individual may earn to advance on the salary schedule developed by the legislative evaluation and accountability program committee or its successor agency is limited to the equivalent of fifteen college quarter credits.



                                                                                                                            Sec. 811. RCW 28A.415.105 and 1995 c 335 s 403 are each amended to read as follows:

                                                                                                                            Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 28A.415.125 through 28A.415.140.

                                                                                                                            (1) "Cooperating organizations" means that at least one school district, one college or university, and one educational service district are involved jointly with the development of a student teaching center.

                                                                                                                            (2) "Cooperating teacher" means a teacher who holds a continuing certificate and supervises and coaches a student teacher.

                                                                                                                            (3) "Field experience" means opportunities for observation, tutoring, microteaching, extended practicums, and clinical and laboratory experiences which do not fall within the meaning of student teaching.

                                                                                                                            (4) "School setting" means a classroom in a public, common school in the state of Washington.

                                                                                                                            (5) "Student teacher" means a candidate for initial teacher certification who is in a ((state board of education-approved)) professional educator standards board-approved, or regionally or nationally accredited teacher preparation program in a school setting as part of the field-based component of their preparation program.

                                                                                                                            (6) "Student teaching" means the full quarter or semester in a school setting during which the student teacher observes the cooperating teacher, participates in instructional activities, and assumes both part-time and full-time teaching responsibilities under the supervision of the cooperating teacher.

                                                                                                                            (7) "Student teaching center" means the program established to provide student teachers in a geographic region of the state with special support and training as part of their teacher preparation program.

                                                                                                                            (8) "Supervisor or university supervisor" means the regular or adjunct faculty member, or college or university-approved designee, who assists and supervises the work of cooperating teachers and student teachers.


                                                                                                                            Sec. 812. RCW 28A.415.125 and 1991 c 258 s 6 are each amended to read as follows:

                                                                                                                            The ((state board of education)) professional educator standards board, from appropriated funds, shall establish a network of student teaching centers to support the continuing development of the field-based component of teacher preparation programs. The purpose of the training centers is to:

                                                                                                                            (1) Expand opportunities for student teacher placements in school districts statewide, with an emphasis on those populations and locations that are unserved or underserved;

                                                                                                                            (2) Provide cooperating teachers for all student teachers during their student internship for up to two academic quarters;

                                                                                                                            (3) Enhance the student teaching component of teacher preparation programs, including a placement of student teachers in special education and multi-ethnic school settings; and

                                                                                                                            (4) Expand access to each other and opportunities for collaboration in teacher education between colleges and universities and school districts.


                                                                                                                            Sec. 813. RCW 28A.415.130 and 1991 c 258 s 7 are each amended to read as follows:

                                                                                                                            Funds for the student teaching centers shall be allocated by the superintendent of public instruction among the educational service district regions on the basis of student teaching placements. The fiscal agent for each center shall be either an educational service district or a state institution of higher education. Prospective fiscal agents shall document to the ((state board of education)) professional educator standards board the following information:

(1) The existing or proposed center was developed jointly through a process including participation by at least one school district, one college or university, and one educational service district;

(2) Primary administration for each center shall be the responsibility of one or more of the cooperating organizations;

(3) Assurance that the training center program provides appropriate and necessary training in observation, supervision, and assistance skills and techniques for:

(a) Cooperating teachers;

(b) Other school building personnel; and

(c) School district employees.


Sec. 814. RCW 28A.415.145 and 1991 c 258 s 10 are each amended to read as follows:

The ((state board of education)) professional educator standards board and the superintendent of public instruction shall adopt rules as necessary under chapter 34.05 RCW to carry out the purposes of RCW 28A.415.100 through 28A.415.140.


Sec. 815. RCW 28A.630.400 and 1995 c 335 s 202 and 1995 c 77 s 27 are each reenacted and amended to read as follows:

(1) The ((state board of education)) professional educator standards board and the state board for community and technical colleges, in consultation with the superintendent of public instruction, the higher education coordinating board, the state apprenticeship training council, and community colleges, shall adopt rules as necessary under chapter 34.05 RCW to implement the paraeducator associate of arts degree.

(2) As used in this section, a "paraeducator" is an individual who has completed an associate of arts degree for a paraeducator. The paraeducator may be hired by a school district to assist certificated instructional staff in the direct instruction of children in small and large groups, individualized instruction, testing of children, recordkeeping, and preparation of materials. The paraeducator shall work under the direction of instructional certificated staff.

(3) The training program for a paraeducator associate of arts degree shall include, but is not limited to, the general requirements for receipt of an associate of arts degree and training in the areas of introduction to childhood education, orientation to children with disabilities, fundamentals of childhood education, creative activities for children, instructional materials for children, fine art experiences for children, the psychology of learning, introduction to education, child health and safety, child development and guidance, first aid, and a practicum in a school setting.

(4) Consideration shall be given to transferability of credit earned in this program to teacher preparation programs at colleges and universities.


Sec. 816. RCW 28A.660.020 and 2004 c 23 s 2 are each amended to read as follows:

(1) Each district or consortia of school districts applying for the alternative route certification program shall submit a proposal to the Washington professional educator standards board specifying:

(a) The route or routes the partnership program intends to offer and a detailed description of how the routes will be structured and operated by the partnership;

(b) The number of candidates that will be enrolled per route;


                                                                                                                            (c) An identification, indication of commitment, and description of the role of approved teacher preparation programs that are partnering with the district or consortia of districts;

                                                                                                                            (d) An assurance of district provision of adequate training for mentor teachers either through participation in a state mentor training academy or district-provided training that meets state-established mentor-training standards specific to the mentoring of alternative route candidates;

                                                                                                                            (e) An assurance that significant time will be provided for mentor teachers to spend with the alternative route teacher candidates throughout the internship. Partnerships must provide each candidate with intensive classroom mentoring until such time as the candidate demonstrates the competency necessary to manage the classroom with less intensive supervision and guidance from a mentor;

                                                                                                                            (f) A description of the rigorous screening process for applicants to alternative route programs, including entry requirements specific to each route, as provided in RCW 28A.660.040; and

                                                                                                                            (g) The design and use of a teacher development plan for each candidate. The plan shall specify the alternative route coursework and training required of each candidate and shall be developed by comparing the candidate's prior experience and coursework with the state's new performance-based standards for residency certification and adjusting any requirements accordingly. The plan may include the following components:

                                                                                                                            (i) A minimum of one-half of a school year, and an additional significant amount of time if necessary, of intensive mentorship, starting with full-time mentoring and progressing to increasingly less intensive monitoring and assistance as the intern demonstrates the skills necessary to take over the classroom with less intensive support. For route one and two candidates, before the supervision is diminished, the mentor of the teacher candidate at the school and the supervisor of the teacher candidate from the higher education teacher preparation program must both agree that the teacher candidate is ready to manage the classroom with less intensive supervision. For route three and four candidates, the mentor of the teacher candidate shall make the decision;

                                                                                                                            (ii) Identification of performance indicators based on the knowledge and skills standards required for residency certification by the ((state board of education)) Washington professional educator standards board;

                                                                                                                            (iii) Identification of benchmarks that will indicate when the standard is met for all performance indicators;

                                                                                                                            (iv) A description of strategies for assessing candidate performance on the benchmarks;

                                                                                                                            (v) Identification of one or more tools to be used to assess a candidate's performance once the candidate has been in the classroom for about one-half of a school year; and

                                                                                                                            (vi) A description of the criteria that would result in residency certification after about one-half of a school year but before the end of the program.

                                                                                                                            (2) To the extent funds are appropriated for this purpose, districts may apply for program funds to pay stipends to trained mentor teachers of interns during the mentored internship. The per intern amount of mentor stipend shall not exceed five hundred dollars.


                                                                                                                            Sec. 817. RCW 28A.660.040 and 2004 c 23 s 4 are each amended to read as follows:

                                                                                                                            Partnership grants funded under this chapter shall operate one to four specific route programs. Successful completion of the program shall make a candidate eligible for residency teacher certification. For route one and two candidates, the mentor of the teacher candidate at the school and the supervisor of the teacher candidate from the higher education teacher preparation program must both agree that the teacher candidate has successfully completed the program. For route three and four candidates, the mentor of the teacher candidate shall make the determination that the candidate has successfully completed the program.

(1) Partnership grant programs seeking funds to operate route one programs shall enroll currently employed classified instructional employees with transferable associate degrees seeking residency teacher certification with endorsements in special education, bilingual education, or English as a second language. It is anticipated that candidates enrolled in this route will complete both their baccalaureate degree and requirements for residency certification in two years or less, including a mentored internship to be completed in the final year. In addition, partnership programs shall uphold entry requirements for candidates that include:

(a) District or building validation of qualifications, including three years of successful student interaction and leadership as a classified instructional employee;

(b) Successful passage of the statewide basic skills exam, when available; and

(c) Meeting the age, good moral character, and personal fitness requirements adopted by rule for teachers.

(2) Partnership grant programs seeking funds to operate route two programs shall enroll currently employed classified staff with baccalaureate degrees seeking residency teacher certification in subject matter shortage areas and areas with shortages due to geographic location. Candidates enrolled in this route must complete a mentored internship complemented by flexibly scheduled training and coursework offered at a local site, such as a school or educational service district, or online or via video-conference over the K-20 network, in collaboration with the partnership program's higher education partner. In addition, partnership grant programs shall uphold entry requirements for candidates that include:

(a) District or building validation of qualifications, including three years of successful student interaction and leadership as classified staff;

(b) A baccalaureate degree from a regionally accredited institution of higher education. The individual's college or university grade point average may be considered as a selection factor;

(c) Successful completion of the content test, once the state content test is available;

(d) Meeting the age, good moral character, and personal fitness requirements adopted by rule for teachers; and

(e) Successful passage of the statewide basic skills exam, when available.

(3) Partnership grant programs seeking funds to operate route three programs shall enroll individuals with baccalaureate degrees, who are not employed in the district at the time of application. When selecting candidates for certification through route three, districts shall give priority to individuals who are seeking residency teacher certification in subject matter shortage areas or shortages due to geographic locations. For route three only, the districts may include additional candidates in nonshortage subject areas if the candidates are seeking endorsements with a secondary grade level designation as defined by rule by the ((state board of education)) professional educator standards board. The districts shall disclose to candidates in nonshortage subject areas available information on the demand in those subject areas. Cohorts of candidates for this route shall attend an intensive summer teaching academy, followed by a full year employed by a district in a mentored internship, followed, if necessary, by a second summer teaching academy. In addition, partnership programs shall uphold entry requirements for candidates that include:

                                                                                                                            (a) Five years' experience in the work force;

                                                                                                                            (b) A baccalaureate degree from a regionally accredited institution of higher education. The individual's grade point average may be considered as a selection factor;

                                                                                                                            (c) Successful completion of the content test, once the state content test is available;

                                                                                                                            (d) External validation of qualifications, including demonstrated successful experience with students or children, such as ((references [reference])) reference letters and letters of support from previous employers;

                                                                                                                            (e) Meeting the age, good moral character, and personal fitness requirements adopted by rule for teachers; and

                                                                                                                            (f) Successful passage of statewide basic skills exams, when available.

                                                                                                                            (4) Partnership grant programs seeking funds to operate route four programs shall enroll individuals with baccalaureate degrees, who are employed in the district at the time of application, or who hold conditional teaching certificates or emergency substitute certificates. Cohorts of candidates for this route shall attend an intensive summer teaching academy, followed by a full year employed by a district in a mentored internship. In addition, partnership programs shall uphold entry requirements for candidates that include:

                                                                                                                            (a) Five years' experience in the work force;

                                                                                                                            (b) A baccalaureate degree from a regionally accredited institution of higher education. The individual's grade point average may be considered as a selection factor;

                                                                                                                            (c) Successful completion of the content test, once the state content test is available;

                                                                                                                            (d) External validation of qualifications, including demonstrated successful experience with students or children, such as reference letters and letters of support from previous employers;

                                                                                                                            (e) Meeting the age, good moral character, and personal fitness requirements adopted by rule for teachers; and

                                                                                                                            (f) Successful passage of statewide basic skills exams, when available.


                                                                                                                            Sec. 818. RCW 28A.690.020 and 1990 c 33 s 546 are each amended to read as follows:

                                                                                                                            The "designated state official" for this state under Article II of RCW 28A.690.010 shall be the superintendent of public instruction, who shall be the compact administrator and who shall have power to ((promulgate)) adopt rules to carry out the terms of this compact. The superintendent of public instruction shall enter into contracts pursuant to Article III of the Agreement only with the approval of the specific text thereof by the ((state board of education)) professional educator standards board.


                                                                                                                            Sec. 819. RCW 28A.300.050 and 1990 c 33 s 252 are each amended to read as follows:

                                                                                                                            The superintendent of public instruction shall provide technical assistance to the ((state board of education)) professional educator standards board in the conduct of the activities described in ((sections 202 through 232 of this act)) RCW 28A.410.040 and 28A.410.050.


                                                                                                                            Sec. 820. RCW 28A.625.370 and 1990 1st ex.s. c 10 s 3 are each amended to read as follows:

                                                                                                                            The award for the teacher educator shall include:

                                                                                                                            (1) A certificate presented to the teacher educator by the governor, the ((president of the state board of education)) chair of the professional educator standards board, and the superintendent of public instruction at a public ceremony; and

(2) A grant to the professional education advisory board of the institution from which the teacher educator is selected, which grant shall not exceed two thousand five hundred dollars and which grant shall be awarded under RCW 28A.625.390.


Sec. 821. RCW 28A.625.380 and 1990 1st ex.s. c 10 s 4 are each amended to read as follows:

The ((state board of education)) professional educator standards board shall adopt rules under chapter 34.05 RCW to carry out the purposes of RCW 28A.625.360 through 28A.625.390. These rules shall include establishing the selection criteria for the Washington award for excellence in teacher preparation. The ((state)) board ((of education)) is encouraged to consult with teacher educators, deans, and professional education advisory board members in developing the selection criteria. The criteria shall include any role performed by nominees relative to implementing innovative developments by the nominee's teacher preparation program and efforts the nominee has made to assist in communicating with legislators, common school teachers and administrators, and others about the nominee's teacher preparation program.


Sec. 822. RCW 28A.625.390 and 1990 1st ex.s. c 10 s 5 are each amended to read as follows:

The professional education advisory board for the institution from which the teacher educator has been selected to receive an award shall be eligible to apply for an educational grant as provided under RCW 28A.625.370. The ((state board of education)) professional educator standards board shall award the grant after the ((state)) board has approved the grant application as long as the written grant application is submitted to the ((state)) board within one year after the award is received by the teacher educator. The grant application shall identify the educational purpose toward which the grant shall be used.


Sec. 823. RCW 28B.10.710 and 1993 c 77 s 1 are each amended to read as follows:

There shall be a one quarter or semester course in either Washington state history and government, or Pacific Northwest history and government in the curriculum of all teachers' colleges and teachers' courses in all institutions of higher education. No person shall be graduated from any of said schools without completing said course of study, unless otherwise determined by the ((state board of education)) Washington professional educator standards board. Any course in Washington state or Pacific Northwest history and government used to fulfill this requirement shall include information on the culture, history, and government of the American Indian peoples who were the first human inhabitants of the state and the region.


Sec. 824. RCW 28B.35.120 and 2004 c 275 s 54 are each amended to read as follows:

In addition to any other powers and duties prescribed by law, each board of trustees of the respective regional universities:

(1) Shall have full control of the regional university and its property of various kinds, except as otherwise provided by law.

(2) Shall employ the president of the regional university, his assistants, members of the faculty, and other employees of the institution, who, except as otherwise provided by law, shall hold their positions, until discharged therefrom by the board for good and lawful reason.


                                                                                                                            (3) With the assistance of the faculty of the regional university, shall prescribe the course of study in the various schools and departments thereof and publish such catalogues thereof as the board deems necessary: PROVIDED, That the ((state)) Washington professional educator standards board ((of education)) shall determine the requisites for and give program approval of all courses leading to teacher certification by such board.

                                                                                                                            (4) Establish such divisions, schools or departments necessary to carry out the purposes of the regional university and not otherwise proscribed by law.

                                                                                                                            (5) Except as otherwise provided by law, may establish and erect such new facilities as determined by the board to be necessary for the regional university.

                                                                                                                            (6) May acquire real and other property as provided in RCW 28B.10.020, as now or hereafter amended.

                                                                                                                            (7) Except as otherwise provided by law, may purchase all supplies and purchase or lease equipment and other personal property needed for the operation or maintenance of the regional university.

                                                                                                                            (8) May establish, lease, operate, equip and maintain self-supporting facilities in the manner provided in RCW 28B.10.300 through 28B.10.330, as now or hereafter amended.

                                                                                                                            (9) Except as otherwise provided by law, to enter into such contracts as the trustees deem essential to regional university purposes.

                                                                                                                            (10) May receive such gifts, grants, conveyances, devises and bequests of real or personal property from whatsoever source, as may be made from time to time, in trust or otherwise, whenever the terms and conditions thereof will aid in carrying out the regional university programs; sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof except as limited by the terms and conditions thereof; and adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof.

                                                                                                                            (11) Subject to the approval of the higher education coordinating board pursuant to RCW 28B.76.230, offer new degree programs, offer off-campus programs, participate in consortia or centers, contract for off-campus educational programs, and purchase or lease major off-campus facilities.

                                                                                                                            (12) May promulgate such rules and regulations, and perform all other acts not forbidden by law, as the board of trustees may in its discretion deem necessary or appropriate to the administration of the regional university.


                                                                                                                            Sec. 825. RCW 28B.40.120 and 2004 c 275 s 56 are each amended to read as follows:

                                                                                                                            In addition to any other powers and duties prescribed by law, the board of trustees of The Evergreen State College:

                                                                                                                            (1) Shall have full control of the state college and its property of various kinds, except as otherwise provided by law.

                                                                                                                            (2) Shall employ the president of the state college, his assistants, members of the faculty, and other employees of the institution, who, except as otherwise provided by law, shall hold their positions, until discharged therefrom by the board for good and lawful reason.

                                                                                                                            (3) With the assistance of the faculty of the state college, shall prescribe the course of study in the various schools and departments thereof and publish such catalogues thereof as the board deems necessary: PROVIDED, That the ((state board of education)) Washington professional educator standards board shall determine the requisites for and give program approval of all courses leading to teacher certification by such board.

(4) Establish such divisions, schools or departments necessary to carry out the purposes of the college and not otherwise proscribed by law.

(5) Except as otherwise provided by law, may establish and erect such new facilities as determined by the board to be necessary for the college.

(6) May acquire real and other property as provided in RCW 28B.10.020, as now or hereafter amended.

(7) Except as otherwise provided by law, may purchase all supplies and purchase or lease equipment and other personal property needed for the operation or maintenance of the college.

(8) May establish, lease, operate, equip and maintain self-supporting facilities in the manner provided in RCW 28B.10.300 through 28B.10.330, as now or hereafter amended.

(9) Except as otherwise provided by law, to enter into such contracts as the trustees deem essential to college purposes.

(10) May receive such gifts, grants, conveyances, devises and bequests of real or personal property from whatsoever source, as may be made from time to time, in trust or otherwise, whenever the terms and conditions thereof will aid in carrying out the college programs; sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof except as limited by the terms and conditions thereof; and adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof.

(11) Subject to the approval of the higher education coordinating board pursuant to RCW 28B.76.230, offer new degree programs, offer off-campus programs, participate in consortia or centers, contract for off- campus educational programs, and purchase or lease major off-campus facilities.

(12) May promulgate such rules and regulations, and perform all other acts not forbidden by law, as the board of trustees may in its discretion deem necessary or appropriate to the administration of the college.


Sec. 826. RCW 43.43.832 and 2005 c 421 s 2 are each amended to read as follows:

(1) The legislature finds that businesses and organizations providing services to children, developmentally disabled persons, and vulnerable adults need adequate information to determine which employees or licensees to hire or engage. The legislature further finds that many developmentally disabled individuals and vulnerable adults desire to hire their own employees directly and also need adequate information to determine which employees or licensees to hire or engage. Therefore, the Washington state patrol identification and criminal history section shall disclose, upon the request of a business or organization as defined in RCW 43.43.830, a developmentally disabled person, or a vulnerable adult as defined in RCW 43.43.830 or his or her guardian, an applicant's record for convictions as defined in chapter 10.97 RCW.

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

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

(4) The legislature further finds that the secretary of the department of social and health services must establish rules and set standards to require specific action when considering the information listed in subsection (1) of this section, and when considering additional information including but not limited to civil adjudication proceedings as defined in RCW 43.43.830 and any out-of-state equivalent, in the following circumstances:

                                                                                                                            (a) When considering persons for state employment in positions directly responsible for the supervision, care, or treatment of children, vulnerable adults, or individuals with mental illness or developmental disabilities;

                                                                                                                            (b) When considering persons for state positions involving unsupervised access to vulnerable adults to conduct comprehensive assessments, financial eligibility determinations, licensing and certification activities, investigations, surveys, or case management; or for state positions otherwise required by federal law to meet employment standards;

                                                                                                                            (c) When licensing agencies or facilities with individuals in positions directly responsible for the care, supervision, or treatment of children, developmentally disabled persons, or vulnerable adults, including but not limited to agencies or facilities licensed under chapter 74.15 or 18.51 RCW;

                                                                                                                            (d) When contracting with individuals or businesses or organizations for the care, supervision, case management, or treatment of children, developmentally disabled persons, or vulnerable adults, including but not limited to services contracted for under chapter 18.20, 18.48, 70.127, 70.128, 72.36, or 74.39A RCW or Title 71A RCW;

                                                                                                                            (e) When individual providers are paid by the state or providers are paid by home care agencies to provide in-home services involving unsupervised access to persons with physical, mental, or developmental disabilities or mental illness, or to vulnerable adults as defined in chapter 74.34 RCW, including but not limited to services provided under chapter 74.39 or 74.39A RCW.

                                                                                                                            (5) Whenever a state conviction record check is required by state law, persons may be employed or engaged as volunteers or independent contractors on a conditional basis pending completion of the state background investigation. Whenever a national criminal record check through the federal bureau of investigation is required by state law, a person may be employed or engaged as a volunteer or independent contractor on a conditional basis pending completion of the national check. The Washington personnel resources board shall adopt rules to accomplish the purposes of this subsection as it applies to state employees.

                                                                                                                            (6)(a) For purposes of facilitating timely access to criminal background information and to reasonably minimize the number of requests made under this section, recognizing that certain health care providers change employment frequently, health care facilities may, upon request from another health care facility, share copies of completed criminal background inquiry information.

                                                                                                                            (b) Completed criminal background inquiry information may be shared by a willing health care facility only if the following conditions are satisfied: The licensed health care facility sharing the criminal background inquiry information is reasonably known to be the person's most recent employer, no more than twelve months has elapsed from the date the person was last employed at a licensed health care facility to the date of their current employment application, and the criminal background information is no more than two years old.

                                                                                                                            (c) If criminal background inquiry information is shared, the health care facility employing the subject of the inquiry must require the applicant to sign a disclosure statement indicating that there has been no conviction or finding as described in RCW 43.43.842 since the completion date of the most recent criminal background inquiry.

(d) Any health care facility that knows or has reason to believe that an applicant has or may have a disqualifying conviction or finding as described in RCW 43.43.842, subsequent to the completion date of their most recent criminal background inquiry, shall be prohibited from relying on the applicant's previous employer's criminal background inquiry information. A new criminal background inquiry shall be requested pursuant to RCW 43.43.830 through 43.43.842.

(e) Health care facilities that share criminal background inquiry information shall be immune from any claim of defamation, invasion of privacy, negligence, or any other claim in connection with any dissemination of this information in accordance with this subsection.

(f) Health care facilities shall transmit and receive the criminal background inquiry information in a manner that reasonably protects the subject's rights to privacy and confidentiality.

(g) For the purposes of this subsection, "health care facility" means a nursing home licensed under chapter 18.51 RCW, a boarding home licensed under chapter 18.20 RCW, or an adult family home licensed under chapter 70.128 RCW.

(7) If a federal bureau of investigation check is required in addition to the state background check by the department of social and health services, an applicant who is not disqualified based on the results of the state background check shall be eligible for a one hundred twenty day provisional approval to hire, pending the outcome of the federal bureau of investigation check. The department may extend the provisional approval until receipt of the federal bureau of investigation check. If the federal bureau of investigation check disqualifies an applicant, the department shall notify the requestor that the provisional approval to hire is withdrawn and the applicant may be terminated.


Sec. 827. RCW 43.43.840 and 2005 c 421 s 6 are each amended to read as follows:

When a business or an organization terminates, fires, dismisses, fails to renew the contract, or permits the resignation of an employee because of crimes against children or other persons or because of crimes relating to the financial exploitation of a vulnerable adult, and if that employee is employed in a position requiring a certificate or license issued by a licensing agency such as the ((state board of education)) Washington professional educator standards board, the business or organization shall notify the licensing agency of such termination of employment.


Sec. 828. RCW 43.43.845 and 2005 c 421 s 7 and 2005 c 237 s 1 are each reenacted and amended to read as follows:

(1) Upon a guilty plea or conviction of a person of any felony crime involving the physical neglect of a child under chapter 9A.42 RCW, the physical injury or death of a child under chapter 9A.32 or 9A.36 RCW (except motor vehicle violations under chapter 46.61 RCW), sexual exploitation of a child under chapter 9.68A RCW, sexual offenses under chapter 9A.44 RCW, promoting prostitution of a minor under chapter 9A.88 RCW, or the sale or purchase of a minor child under RCW 9A.64.030, the prosecuting attorney shall notify the state patrol of such guilty pleas or convictions.

(2) When the state patrol receives information that a person has pled guilty to or been convicted of one of the felony crimes under subsection (1) of this section, the state patrol shall transmit that information to the superintendent of public instruction. It shall be the duty of the superintendent of public instruction to identify whether the person holds a certificate or permit issued under chapters 28A.405 and 28A.410 RCW or is employed by a school district, and provide this information to the ((state board of education)) Washington professional educator standards board and the school district employing the individual who pled guilty or was convicted of the crimes identified in subsection (1) of this section.


                                                                                                                            Sec. 829. RCW 72.40.028 and 1985 c 378 s 18 are each amended to read as follows:

                                                                                                                            All teachers at the state school for the deaf and the state school for the blind shall meet all certification requirements and the programs shall meet all accreditation requirements and conform to the standards defined by law or by rule of the ((state board of education)) Washington professional educator standards board or the office of the state superintendent of public instruction. The superintendents, by rule, may adopt additional educational standards for their respective schools. Salaries of all certificated employees shall be set so as to conform to and be contemporary with salaries paid to other certificated employees of similar background and experience in the school district in which the program or facility is located. The superintendents may provide for provisional certification for teachers in their respective schools including certification for emergency, temporary, substitute, or provisional duty.


PART 9

OTHER DUTIES


                                                                                                                            Sec. 901. RCW 28A.600.010 and 1997 c 265 s 4 are each amended to read as follows:

                                                                                                                            Every board of directors, unless otherwise specifically provided by law, shall:

                                                                                                                            (1) Enforce the rules prescribed by the superintendent of public instruction ((and the state board of education)) for the government of schools, pupils, and certificated employees.

                                                                                                                            (2) Adopt and make available to each pupil, teacher and parent in the district reasonable written rules regarding pupil conduct, discipline, and rights, including but not limited to short-term suspensions as referred to in RCW 28A.305.160 (as recodified by this act) and suspensions in excess of ten consecutive days. Such rules shall not be inconsistent with any of the following: Federal statutes and regulations, state statutes, common law, and the rules of the superintendent of public instruction((, and the state board of education)). The board's rules shall include such substantive and procedural due process guarantees as prescribed by the ((state board of education)) superintendent of public instruction under RCW 28A.305.160 (as recodified by this act). ((Commencing with the 1976-77 school year,)) When such rules are made available to each pupil, teacher, and parent, they shall be accompanied by a detailed description of rights, responsibilities, and authority of teachers and principals with respect to the discipline of pupils as prescribed by state statutory law, the superintendent of public instruction, ((and state board of education rules)) and the rules ((and regulations)) of the school district.

                                                                                                                            For the purposes of this subsection, computation of days included in "short-term" and "long-term" suspensions shall be determined on the basis of consecutive school days.

                                                                                                                            (3) Suspend, expel, or discipline pupils in accordance with RCW 28A.305.160 (as recodified by this act).


                                                                                                                            NEW SECTION. Sec. 902. A new section is added to chapter 28A.405 RCW to read as follows:

                                                                                                                            Each school district board of directors shall adopt a policy regarding the presence at their respective schools of teachers and other certificated personnel before the opening of school in the morning and after the closing of school in the afternoon or evening. The board of directors shall make the policy available to parents and the public through the school district report card and other means of communication.


Sec. 903. RCW 28A.225.280 and 1990 1st ex.s. c 9 s 206 are each amended to read as follows:

Eligibility of transfer students under RCW 28A.225.220 and 28A.225.225 for participation in extracurricular activities shall be subject to rules adopted by the Washington interscholastic activities association ((as authorized by the state board of education)).


Sec. 904. RCW 28A.600.200 and 1990 c 33 s 502 are each amended to read as follows:

Each school district board of directors is hereby granted and shall exercise the authority to control, supervise and regulate the conduct of interschool athletic activities and other interschool extracurricular activities of an athletic, cultural, social or recreational nature for students of the district. A board of directors may delegate control, supervision and regulation of any such activity to the Washington interscholastic activities association or any other voluntary nonprofit entity and compensate such entity for services provided, subject to the following conditions:

(1) ((The voluntary nonprofit entity shall submit an annual report to the state board of education of student appeal determinations, assets, and financial receipts and disbursements at such time and in such detail as the state board shall establish by rule;

(2))) The voluntary nonprofit entity shall not discriminate in connection with employment or membership upon its governing board, or otherwise in connection with any function it performs, on the basis of race, creed, national origin, sex or marital status;

(((3))) (2) Any rules and policies applied by the voluntary nonprofit entity which govern student participation in any interschool activity shall be written ((and subject to the annual review and approval of the state board of education at such time as it shall establish;

(4) All amendments and repeals of such rules and policies shall be subject to the review and approval of the state board)); ((and

(5))) (3) Such rules and policies shall provide for notice of the reasons and a fair opportunity to contest such reasons prior to a final determination to reject a student's request to participate in or to continue in an interschool activity. Any such decision shall be considered a decision of the school district conducting the activity in which the student seeks to participate or was participating and may be appealed pursuant to RCW 28A.645.010 through 28A.645.030; and

(4) Beginning the effective date of this section and until July 1, 2007, that any decision by the Washington interscholastic activities association may be appealed to the office of the superintendent of public instruction. After July 1, 2007, decisions by the Washington interscholastic activities association addressing only academic issues may be appealed to the office of the superintendent of public instruction. The office of the superintendent shall adopt rules to implement this subsection.


NEW SECTION. Sec. 905. A new section is added to chapter 28A.600 RCW to read as follows:

By July 1, 2007, the Washington interscholastic activities association shall establish a nine-person appeals board to address nonacademic appeals. The board shall be comprised of active members of school district boards of directors, and retired or inactive coaches. The retired or inactive coaches shall be representative of the multilevels of competition, the various school classifications, and the activity districts of the Washington interscholastic activities association. The board shall begin hearing nonacademic appeals by July 1, 2007. No board member may participate in the appeal process if the member was involved in the activity that was the basis of the appeal or involved in the decision of the association, either directly or indirectly.


                                                                                                                            Sec. 906. RCW 28A.160.210 and 1989 c 178 s 20 are each amended to read as follows:

                                                                                                                            In addition to other powers and duties, the ((state board of education)) superintendent of public instruction shall adopt rules ((and regulations)) governing the training and qualifications of school bus drivers. Such rules ((and regulations)) shall be designed to insure that persons will not be employed to operate school buses unless they possess such physical health and driving skills as are necessary to safely operate school buses: PROVIDED, That such rules ((and regulations)) shall insure that school bus drivers are provided a due process hearing before any certification required by such rules ((and regulations)) is cancelled: PROVIDED FURTHER, That such rules ((and regulations)) shall not conflict with the authority of the department of licensing to license school bus drivers in accordance with chapter 46.25 RCW. The ((state board of education)) superintendent of public instruction may obtain a copy of the driving record, as maintained by the department of licensing, for consideration when evaluating a school bus driver's driving skills.


                                                                                                                            Sec. 907. RCW 28A.160.100 and 1990 c 33 s 138 are each amended to read as follows:

                                                                                                                            In addition to the authority otherwise provided in RCW 28A.160.010 through 28A.160.120 to school districts for the transportation of persons, whether school children, school personnel, or otherwise, any school district authorized to use school buses and drivers hired by the district for the transportation of school children to and from a school activity, along with such school employees as necessary for their supervision, shall, if such school activity be an interscholastic activity, be authorized to transport members of the general public to such event and utilize the school district's buses, transportation equipment and facilities, and employees therefor: PROVIDED, That provision shall be made for the reimbursement and payment to the school district by such members of the general public of not less than the district's actual costs and the reasonable value of the use of the district's buses and facilities provided in connection with such transportation: PROVIDED FURTHER, That wherever private transportation certified or licensed by the utilities and transportation commission or public transportation is reasonably available ((as determined by rule and regulation of the state board of education)), this section shall not apply.


                                                                                                                            Sec. 908. RCW 28A.210.070 and 1990 c 33 s 191 are each amended to read as follows:

                                                                                                                            As used in RCW 28A.210.060 through 28A.210.170:

                                                                                                                            (1) "Chief administrator" shall mean the person with the authority and responsibility for the immediate supervision of the operation of a school or day care center as defined in this section or, in the alternative, such other person as may hereafter be designated in writing for the purposes of RCW 28A.210.060 through 28A.210.170 by the statutory or corporate board of directors of the school district, school, or day care center or, if none, such other persons or person with the authority and responsibility for the general supervision of the operation of the school district, school or day care center.

(2) "Full immunization" shall mean immunization against certain vaccine-preventable diseases in accordance with schedules and with immunizing agents approved by the state board of health.

(3) "Local health department" shall mean the city, town, county, district or combined city-county health department, board of health, or health officer which provides public health services.

(4) "School" shall mean and include each building, facility, and location at or within which any or all portions of a preschool, kindergarten and grades one through twelve program of education and related activities are conducted for two or more children by or in behalf of any public school district and by or in behalf of any private school or private institution subject to approval by the state board of education pursuant to RCW 28A.305.130(((6))), 28A.195.010 through 28A.195.050, and 28A.410.120.

(5) "Day care center" shall mean an agency which regularly provides care for a group of thirteen or more children for periods of less than twenty-four hours and is licensed pursuant to chapter 74.15 RCW.

(6) "Child" shall mean any person, regardless of age, in attendance at a public or private school or a licensed day care center.


Sec. 909. RCW 28A.210.120 and 1990 c 33 s 196 are each amended to read as follows:

It shall be the duty of the chief administrator of every public and private school and day care center to prohibit the further presence at the school or day care center for any and all purposes of each child for whom proof of immunization, certification of exemption, or proof of compliance with an approved schedule of immunization has not been provided in accordance with RCW 28A.210.080 and to continue to prohibit the child's presence until such proof of immunization, certification of exemption, or approved schedule has been provided. The exclusion of a child from a school shall be accomplished in accordance with rules of the office of the superintendent, in consultation with the state board of ((education)) health. The exclusion of a child from a day care center shall be accomplished in accordance with rules of the department of social and health services. Prior to the exclusion of a child, each school or day care center shall provide written notice to the parent(s) or legal guardian(s) of each child or to the adult(s) in loco parentis to each child, who is not in compliance with the requirements of RCW 28A.210.080. The notice shall fully inform such person(s) of the following: (1) The requirements established by and pursuant to RCW 28A.210.060 through 28A.210.170; (2) the fact that the child will be prohibited from further attendance at the school unless RCW 28A.210.080 is complied with; (3) such procedural due process rights as are hereafter established pursuant to RCW 28A.210.160 and/or 28A.210.170, as appropriate; and (4) the immunization services that are available from or through the local health department and other public agencies.


Sec. 910. RCW 28A.210.160 and 1990 c 33 s 199 are each amended to read as follows:

The superintendent of public instruction with regard to public schools and the state board of education with regard to private schools, in consultation with the state board of ((education)) health, shall ((and is hereby empowered to)) each adopt rules pursuant to chapter 34.05 RCW ((which)) that establish the procedural and substantive due process requirements governing the exclusion of children from ((public and private)) schools pursuant to RCW 28A.210.120.


Sec. 911. RCW 28A.210.320 and 2002 c 101 s 1 are each amended to read as follows:


                                                                                                                            (1) The attendance of every child at every public school in the state shall be conditioned upon the presentation before or on each child's first day of attendance at a particular school of a medication or treatment order addressing any life-threatening health condition that the child has that may require medical services to be performed at the school. Once such an order has been presented, the child shall be allowed to attend school.

                                                                                                                            (2) The chief administrator of every public school shall prohibit the further presence at the school for any and all purposes of each child for whom a medication or treatment order has not been provided in accordance with this section if the child has a life-threatening health condition that may require medical services to be performed at the school and shall continue to prohibit the child's presence until such order has been provided. The exclusion of a child from a school shall be accomplished in accordance with rules of the state board of education. Before excluding a child, each school shall provide written notice to the parents or legal guardians of each child or to the adults in loco parentis to each child, who is not in compliance with the requirements of this section. The notice shall include, but not be limited to, the following: (a) The requirements established by this section; (b) the fact that the child will be prohibited from further attendance at the school unless this section is complied with; and (c) such procedural due process rights as are established pursuant to this section.

                                                                                                                            (3) The ((state board of education)) superintendent of public instruction in consultation with the state board of health shall adopt rules under chapter 34.05 RCW that establish the procedural and substantive due process requirements governing the exclusion of children from public schools under this section. The rules shall include any requirements under applicable federal laws.

                                                                                                                            (4) As used in this section, "life-threatening condition" means a health condition that will put the child in danger of death during the school day if a medication or treatment order and a nursing plan are not in place.

                                                                                                                            (5) As used in this section, "medication or treatment order" means the authority a registered nurse obtains under RCW 18.79.260(2).


                                                                                                                            Sec. 912. RCW 28A.335.100 and 1975-'76 2nd ex.s. c 23 s 1 are each amended to read as follows:

                                                                                                                            Any association established by school districts pursuant to the interlocal cooperation act, chapter 39.34 RCW for the purpose of jointly and cooperatively purchasing school supplies, materials and equipment, if otherwise authorized for school district purposes to purchase personal or real property, is ((hereby)) authorized((, subject to rules and regulations of the state board of education,)) to mortgage, or convey a purchase money security interest in real or personal property of such association of every kind, character or description whatsoever, or any interest in such personal or real property: PROVIDED, That any such association shall be prohibited from causing any creditor of the association to acquire any rights against the property, properties or assets of any of its constituent school districts and any creditor of such association shall be entitled to look for payment of any obligation incurred by such association solely to the assets and properties of such association.


                                                                                                                            Sec. 913. RCW 28A.335.120 and 2001 c 183 s 2 are each amended to read as follows:

                                                                                                                            (1) The board of directors of any school district of this state may:

(a) Sell for cash, at public or private sale, and convey by deed all interest of the district in or to any of the real property of the district which is no longer required for school purposes; and

(b) Purchase real property for the purpose of locating thereon and affixing thereto any house or houses and appurtenant buildings removed from school sites owned by the district and sell for cash, at public or private sale, and convey by deed all interest of the district in or to such acquired and improved real property.

(2) When the board of directors of any school district proposes a sale of school district real property pursuant to this section and the value of the property exceeds seventy thousand dollars, the board shall publish a notice of its intention to sell the property. The notice shall be published at least once each week during two consecutive weeks in a legal newspaper with a general circulation in the area in which the school district is located. The notice shall describe the property to be sold and designate the place where and the day and hour when a hearing will be held. The board shall hold a public hearing upon the proposal to dispose of the school district property at the place and the day and hour fixed in the notice and admit evidence offered for and against the propriety and advisability of the proposed sale.

(3) The board of directors of any school district desiring to sell surplus real property shall publish a notice in a newspaper of general circulation in the school district. School districts shall not sell the property for at least forty-five days following the publication of the newspaper notice.

(4) Private schools shall have the same rights as any other person or entity to submit bids for the purchase of surplus real property and to have such bids considered along with all other bids.

(5) Any sale of school district real property authorized pursuant to this section shall be preceded by a market value appraisal by a professionally designated real estate appraiser as defined in RCW 74.46.020 or a general real estate appraiser certified under chapter 18.140 RCW selected by the board of directors and no sale shall take place if the sale price would be less than ninety percent of the appraisal made by the real estate appraiser: PROVIDED, That if the property has been on the market for one year or more the property may be reappraised and sold for not less than seventy-five percent of the reappraised value with the unanimous consent of the board.

(6) If in the judgment of the board of directors of any district the sale of real property of the district not needed for school purposes would be facilitated and greater value realized through use of the services of licensed real estate brokers, a contract for such services may be negotiated and concluded: PROVIDED, That the use of a licensed real estate broker will not eliminate the obligation of the board of directors to provide the notice described in this section: PROVIDED FURTHER, That the fee or commissions charged for any broker services shall not exceed seven percent of the resulting sale value for a single parcel: PROVIDED FURTHER, That any professionally designated real estate appraiser as defined in RCW 74.46.020 or a general real estate appraiser certified under chapter 18.140 RCW selected by the board to appraise the market value of a parcel of property to be sold may not be a party to any contract with the school district to sell such parcel of property for a period of three years after the appraisal.

(7) If in the judgment of the board of directors of any district the sale of real property of the district not needed for school purposes would be facilitated and greater value realized through sale on contract terms, a real estate sales contract may be executed between the district and buyer((: PROVIDED, That the terms and conditions of any such sales contract must comply with rules and regulations of the state board of education, herein authorized, governing school district real property contract sales)).


                                                                                                                            Sec. 914. RCW 28A.320.240 and 1969 ex.s. c 223 s 28A.58.104 are each amended to read as follows:

(1) The purpose of this section is to identify quality criteria for school library media programs that support the student learning goals under RCW 28A.150.210, the essential academic learning requirements under RCW 28A.655.070, and high school graduation requirements adopted under RCW 28A.230.090.

                                                                                                                            (2) Every board of directors shall provide for the operation and stocking of such libraries as the board deems necessary for the proper education of the district's students or as otherwise required by law or rule ((or regulation)) of the superintendent of public instruction ((or the state board of education)).

(3) "Teacher-librarian" means a certified teacher with a library media endorsement under rules adopted by the professional educator standards board.

                                                                                                                            (4) "School-library media program" means a school-based program that is staffed by a certificated teacher-librarian and provides a variety of resources that support student mastery of the essential academic learning requirements in all subject areas and the implementation of the district's school improvement plan.

                                                                                                                            (5) The teacher-librarian, through the school-library media program, shall collaborate as an instructional partner to help all students meet the content goals in all subject areas, and assist high school students completing the culminating project and high school and beyond plans required for graduation.


                                                                                                                            Sec. 915. RCW 28A.155.060 and 1995 c 77 s 12 are each amended to read as follows:

                                                                                                                            For the purpose of carrying out the provisions of RCW 28A.155.020 through 28A.155.050, the board of directors of every school district shall be authorized to contract with agencies approved by the ((state board of education)) superintendent of public instruction for operating special education programs for students with disabilities. Approval standards for such agencies shall conform substantially with those promulgated for approval of special education aid programs in the common schools.


                                                                                                                            Sec. 916. RCW 28A.600.130 and 1995 1st sp.s. c 5 s 1 are each amended to read as follows:

                                                                                                                            The higher education coordinating board shall establish a planning committee to develop criteria for screening and selection of the Washington scholars each year in accordance with RCW 28A.600.110(1). It is the intent that these criteria shall emphasize scholastic achievement but not exclude such criteria as leadership ability and community contribution in final selection procedures. The Washington scholars planning committee shall have members from selected state agencies and private organizations having an interest and responsibility in education, including but not limited to, the ((state board of education, the)) office of superintendent of public instruction, the council of presidents, the state board for community and technical colleges, and the Washington friends of higher education.


                                                                                                                            Sec. 917. RCW 28A.650.015 and 1995 c 335 s 507 are each amended to read as follows:

                                                                                                                            (1) The superintendent of public instruction, to the extent funds are appropriated, shall develop and implement a Washington state K-12 education technology plan. The technology plan shall be updated on at least a biennial basis, shall be developed to coordinate and expand the use of education technology in the common schools of the state. The plan shall be consistent with applicable provisions of chapter 43.105 RCW. The plan, at a minimum, shall address:

(a) The provision of technical assistance to schools and school districts for the planning, implementation, and training of staff in the use of technology in curricular and administrative functions;

(b) The continued development of a network to connect school districts, institutions of higher learning, and other sources of on-line information; and

(c) Methods to equitably increase the use of education technology by students and school personnel throughout the state.

(2) The superintendent of public instruction shall appoint an educational technology advisory committee to assist in the development and implementation of the technology plan in subsection (1) of this section. The committee shall include, but is not limited to, persons representing: The ((state board of education, the commission on student learning, the)) department of information services, educational service districts, school directors, school administrators, school principals, teachers, classified staff, higher education faculty, parents, students, business, labor, scientists and mathematicians, the higher education coordinating board, the work force training and education coordinating board, and the state library.


PART 10

MISCELLANEOUS


NEW SECTION. Sec. 1001. Part headings used in this act are not any part of the law.


NEW SECTION. Sec. 1002. Section 407 of this act takes effect September 1, 2009."


On page 1, line 2 of the title, after "education;" strike the remainder of the title and insert "amending RCW 28A.305.130, 28A.305.035, 28A.300.040, 28A.305.011, 28A.150.230, 28A.505.140, 28A.525.020, 28A.525.030, 28A.525.050, 28A.525.055, 28A.525.070, 28A.525.080, 28A.525.090, 28A.525.162, 28A.525.164, 28A.525.166, 28A.525.168, 28A.525.170, 28A.525.172, 28A.525.174, 28A.525.176, 28A.525.178, 28A.525.180, 28A.525.190, 28A.525.200, 28A.525.216, 28A.150.260, 28A.335.160, 28A.540.050, 28A.150.530, 28A.335.210, 28A.335.230, 28A.540.070, 39.35D.020, 39.35D.040, 39.35D.060, 79.17.100, 79.17.120, 28A.305.220, 28A.230.100, 28A.230.170, 28A.305.170, 28A.230.130, 28A.205.010, 28A.205.070, 28A.215.010, 28A.215.020, 28A.205.040, 28A.215.140, 28A.230.020, 28A.230.040, 28A.230.050, 28A.315.175, 28A.315.195, 28A.315.205, 28A.315.015, 28A.315.025, 28A.315.055, 28A.315.085, 28A.315.125, 28A.315.185, 28A.305.210, 28A.310.080, 28A.310.030, 28A.310.050, 28A.310.060, 28A.310.090, 28A.310.100, 28A.310.140, 28A.310.150, 28A.310.200, 28A.310.310, 28A.323.020, 28A.323.040, 29A.24.070, 84.09.037, 28A.305.160, 28A.150.300, 28A.225.160, 28A.300.150, 28A.600.020, 28A.600.030, 18.35.020, 18.35.195, 18.83.200, 28A.625.360, 28A.225.330, 28A.405.110, 28A.415.010, 28A.415.020, 28A.415.024, 28A.415.025, 28A.415.105, 28A.415.125, 28A.415.130, 28A.415.145, 28A.660.020, 28A.660.040, 28A.690.020, 28A.300.050, 28A.625.370, 28A.625.380, 28A.625.390, 28B.10.710, 28B.35.120, 28B.40.120, 43.43.832, 43.43.840, 72.40.028, 28A.600.010, 28A.225.280, 28A.600.200, 28A.160.210, 28A.160.100, 28A.210.070, 28A.210.120, 28A.210.160, 28A.210.320, 28A.335.100, 28A.335.120, 28A.320.240, 28A.155.060, 28A.600.130, and 28A.650.015; reenacting and amending RCW 28A.330.100, 28A.630.400, and 43.43.845; adding a new section to chapter 28A.525 RCW; adding a new section to chapter 28A.545 RCW; adding a new section to chapter 28A.230 RCW; adding new sections to chapter 28A.300 RCW; adding new sections to chapter 28A.600 RCW; adding a new section to chapter 28A.405 RCW; creating new sections; recodifying RCW 28A.305.220, 28A.305.170, and 28A.305.160; decodifying RCW 28A.525.120, 28A.525.122, 28A.525.124, 28A.525.126, 28A.525.128, 28A.525.130, 28A.525.132, 28A.525.134, 28A.525.140, 28A.525.142, 28A.525.144, 28A.525.146, 28A.525.148, 28A.525.150, 28A.525.152, 28A.525.154, 28A.525.156, 28A.525.158, 28A.525.160, and 28A.525.182; providing an effective date; and providing expiration dates."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


                                                                                                               There being no objection, the House concurred in the Senate amendment to ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 3098 and advanced the bill as amended by the Senate to final passage.


{{43207}}                                                                                                                         FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


                                                                                                               Representatives Dunshee and Talcott spoke in favor the passage of the bill.


                                                                                                               The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Engrossed Second Substitute House Bill No. 3098, as amended by the Senate.


{{43208}}                                                                                                                                             ROLL CALL


                                                                                                               The Clerk called the roll on the final passage of Engrossed Second Substitute House Bill No. 3098, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

                                                                                                               Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.

  

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 3098, as amended by the Senate, having received the constitutional majority, was declared passed.


{{43209}}MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


The Senate has passed SUBSTITUTE HOUSE BILL NO. 2695, with the following amendment:


Strike everything after the enacting clause and insert the following:

 

"Sec. 1. RCW 29A.60.165 and 2005 c 243 s 8 are each amended to read as follows:

(1) If the voter neglects to sign the outside envelope of an absentee or provisional ballot, the auditor shall notify the voter by ((telephone)) first class mail and advise the voter of the correct procedures for completing the unsigned affidavit. ((If the auditor is not able to provide the information personally to the voter by telephone, then the voter must be contacted by first class mail and advised of the correct procedures for completing the unsigned affidavit. Leaving a voice mail message for the voter is not to be considered as personally contacting the voter.)) If the absentee ballot is received within three business days of the final meeting of the canvassing board, or the voter has been notified by first class mail and has not responded at least three business days before the final meeting of the canvassing board, then the auditor shall attempt to notify the voter by telephone, using the voter registration record information. In order for the ballot to be counted, the voter must either:

 (a) Appear in person and sign the envelope no later than the day before the certification of the primary or election; or

 (b) Sign a copy of the envelope provided by the auditor, and return it to the auditor no later than the day before the certification of the primary or election.

(2)(a) If the handwriting of the signature on an absentee or provisional ballot envelope is not the same as the handwriting of the signature on the registration file, the auditor shall notify the voter by ((telephone)) first class mail, enclosing a copy of the envelope affidavit, and advise the voter of the correct procedures for updating his or her signature on the voter registration file. ((If the auditor is not able to provide the information personally to the voter by telephone, then the voter must be contacted by first class mail and advised of the correct procedures for completing the unsigned affidavit. Leaving a voice mail message for the voter is not to be considered as personally contacting the voter.)) If the absentee or provisional ballot is received within three business days of the final meeting of the canvassing board, or the voter has been notified by first class mail and has not responded at least three business days before the final meeting of the canvassing board, then the auditor shall attempt to notify the voter by telephone, using the voter registration record information. In order for the ballot to be counted, the voter must either:

 (i) Appear in person and sign a new registration form no later than the day before the certification of the primary or election; or


 (ii) Sign a copy of the affidavit provided by the auditor and return it to the auditor no later than the day before the certification of the primary or election. The voter may enclose with the affidavit a photocopy of a valid government or tribal issued identification document that includes their current signature. If the signature on the copy of the affidavit does not match the signature on file or the signature on the copy of the identification document, the voter must appear in person and sign a new registration form no later than the day before the certification of the primary or election in order for the ballot to be counted.

 (b) If the signature on an absentee or provisional ballot envelope is not the same as the signature on the registration file because the name is different, the ballot may be counted as long as the handwriting is clearly the same. The auditor shall send the voter a change-of-name form under RCW 29A.08.440 and direct the voter to complete the form.

 (c) If the signature on an absentee or provisional ballot envelope is not the same as the signature on the registration file because the voter used initials or a common nickname, the ballot may be counted as long as the surname and handwriting are clearly the same.

                                                                                                                            (3) A voter may not cure a missing or mismatched signature for purposes of counting the ballot in a recount.

                                                                                                                            (4) A record must be kept of all ballots with missing and mismatched signatures. The record must contain the date on which the voter was contacted or the notice was mailed, as well as the date on which the voter signed the envelope, a copy of the envelope, a new registration form, or a change-of-name form. That record is a public record under chapter 42.17 RCW and may be disclosed to interested parties on written request."


and the same is herewith transmitted.

Thomas Hoemann, Secretary


SENATE AMENDMENT TO HOUSE BILL


                                                                                                               Representative Haigh moved the House concurred in the Senate amendment to SUBSTITUTE HOUSE BILL NO. 2695 and advanced the bill as amended by the Senate to final passage.


                                                                                                               Representative Haigh spoke in favor of the motion to concur.


                                                                                                               Representative Nixon spoke against the motion to concur.


                                                                                                               Division was demanded and the demand was sustained. The Speaker (Representative Lovick presiding) divided the House. The result was 55 - YEAS; 43 -NAYS.


                                                                                                               The motion was adopted.


{{43210}}                                                                                                                         FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED


                                                                                                               Representative Haigh spoke in favor the passage of the bill.


                                                                                                               Representative Nixon spoke against the passage of the bill.


The Speaker (Representative Lovick presiding) stated the question before the House to be final passage of Substitute House Bill No. 2695, as amended by the Senate.


{{43211}}ROLL CALL


The Clerk called the roll on the final passage of Substitute House Bill No. 2695, as amended by the Senate, and the bill passed the House by the following vote: Yeas - 55, Nays - 43, Excused - 0.

Voting yea: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Green, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kilmer, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Wallace, Williams, Wood and Mr. Speaker - 55.

Voting nay: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kretz, Kristiansen, McCune, McDonald, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Walsh and Woods - 43.

  

SUBSTITUTE HOUSE BILL NO. 2695, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


The Senate refuses to concur in the House amendment to SUBSTITUTE SENATE BILL NO. 6325 and asks the House to recede therefrom, and the same is herewith transmitted.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


There being no objection, the rules were suspended and SUBSTITUTE SENATE BILL NO. 6325 was returned to second reading for purpose of amendment.


SECOND READING


{{43214}}SUBSTITUTE SENATE BILL NO. 6325, By Senate Committee on Human Services & Corrections (originally sponsored by Senators Regala, Kline, Fairley, Stevens, Rasmussen and McAuliffe)


Establishing residence restrictions for sex offenders.



{{43215}}                                                                                                               Representative Clements moved the adoption of amendment (1168):


                                                                                                                            On page 1, line 5, after "Sec. 1." insert "(1)"


                                                                                                                            On page 1, line 8, after "subject matter." insert "The state preemption created in this section applies to all rules, regulations, codes, statutes, and ordinances pertaining to residency restrictions for persons convicted of any sex offense at any time."


                                                                                                                            On page 1, after line 8, insert:

                                                                                                                            "(2) This section does not apply to rules, regulations, codes, statutes, or ordinances adopted by cities, counties, municipalities, or local agencies prior to March 1, 2006, except as required by an order issued by a court of competent jurisdiction pursuant to litigation regarding the rules, regulations, codes, statutes, or ordinances."


                                                                                                                            On page 1, after line 12, insert:


                                                                                                                            "NEW SECTION. Sec. 3. (1) The association of Washington cities, working with the cities and towns of Washington state, shall develop statewide standards for cities and towns to use when determining whether to impose residency restrictions on sex offenders within their jurisdiction.

                                                                                                                            (2) The association of Washington cities shall work in consultation with a representative from each of the following agencies and organizations:

                                                                                                                            (a) The attorney general of Washington;

                                                                                                                            (b) The Washington state association of counties;

                                                                                                                            (c) The department of corrections;

                                                                                                                            (d) The Washington state coalition of sexual assault programs;

                                                                                                                            (e) The Washington association of sheriffs and police chiefs; and

                                                                                                                            (f) Any other agencies and organizations as deemed appropriate by the association of Washington cities, such as the Washington association of prosecuting attorneys, the juvenile rehabilitation administration of the department of social and health services, the indeterminate sentence review board, the Washington association for the treatment of sexual abusers, and the department of community, trade, and economic development.

                                                                                                                            (3) The statewide standards for whether to impose residency restrictions on sex offenders should consider the following elements:

                                                                                                                            (a) An identification of areas in which sex offenders should not reside due to concerns regarding public safety and welfare;

                                                                                                                            (b) An identification of areas in which sex offenders may reside, taking into consideration factors such as:

                                                                                                                            (i) How many housing units must reasonably be available in order to accommodate registered sex offenders in a city or town;

                                                                                                                            (ii) The average response time of emergency services to the areas;

                                                                                                                            (iii) The proximity of risk potential activities to the areas; and

                                                                                                                            (iv) The proximity of medical care, mental health care providers, and sex offender treatment providers to the areas;

                                                                                                                            (c) A prohibition against completely precluding sex offender residences within a city or town, implicating a sex offender's right to travel, or enacting a criminal regulatory measure;

                                                                                                                            (d) Appropriate civil remedies for violations of a local ordinance; and

                                                                                                                            (e) Unique local conditions that should be given due deference, such as proximity to state facilities that house or treat sex offenders.

                                                                                                                            (4) The association of Washington cities, on behalf of the cities and towns in Washington, shall present consensus statewide standards, along with any consensus recommendations and proposed legislation, to the governor and the legislature no later than December 31, 2007. The standards and any recommendations or proposed legislation must reflect a consensus among the association of Washington cities and the entities in subsections (2)(a) through (e) of this section. These entities must participate in good faith in activities carried out under this section with a goal of achieving consensus standards.


NEW SECTION. Sec. 4. (1) If the association of Washington cities submits consensus statewide standards to the governor and the legislature on or before December 31, 2007, section 1 of this act expires July 1, 2008, and may only be revived by an affirmative act of the legislature through duly enacted legislation.

(2) If the association of Washington cities does not submit consensus statewide standards to the governor and legislature on or before December 31, 2007, section 1 of this act does not expire."


Correct the title.


Representative Clements spoke in favor of the adoption of the amendment.


The amendment was adopted.


{{43216}}There being no objection, the rules were suspended, the second reading considered the third and the bill, as amended by the House, was placed on final passage.


Representative Pearson spoke in favor of passage of the bill.


The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Substitute Senate Bill No. 6325, as amended by the House.


ROLL CALL


The Clerk called the roll on the final passage of Substitute Senate Bill No. 6325, as amended by the House, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.



                                                                                                               SUBSTITUTE SENATE BILL NO. 6325, as amended by the House, having received the necessary constitutional majority, was declared passed.


{{43217}}                                                                                                                           MESSAGE FROM THE SENATE

March 7, 2006

Mr. Speaker:


                                                                                                               The Senate refuses to concur in the House amendment to SUBSTITUTE SENATE BILL NO. 6519 and asks the House to recede therefrom, and the same is herewith transmitted.

Thomas Hoemann, Secretary


HOUSE AMENDMENT TO SENATE BILL


                                                                                                               There being no objection, the rules were suspended and SUBSTITUTE SENATE BILL NO. 6519 was returned to second reading for purpose of amendment.



SECOND READING


{{43219}}                                                                                                               SUBSTITUTE SENATE BILL NO. 6519, By Senate Committee on Human Services & Corrections (originally sponsored by Senators Benton, Benson, Schoesler, Carrell, Esser, Jacobsen, Pflug, Mulliken, Johnson, Honeyford, Sheldon, Roach, Kline, Oke, Rasmussen and Keiser)


                                                                                                               Requiring level III sex offenders to report to law enforcement every three months.


{{43220}}                                                                                                               Representative Strow moved the adoption of amendment (1179):


                                                                                                                            On page 9, line 9, after "level" insert "II or"


                                                                                                                            On page 9, line 10, after "registered" strike ", for a period of five years"


                                                                                                                            On page 9, line 14, after "period of" insert "at least"


                                                                                                                            On page 9, line 14, after "community" strike "is no longer subject to" and insert "may petition the superior court to be relieved of"


                                                                                                                            On page 9, line 15, after "days." insert "The petition shall be made to the superior court in the county where the offender resides or reports under this section. The prosecuting attorney of the county shall be named and served as respondent in any such petition. The court shall relieve the petitioner of the duty to report if the petitioner shows, by a preponderance of the evidence, that the petitioner has complied with the reporting requirement for a period of at least five years and that the offender has not been convicted of a criminal violation of this section for a period of at least five years, and the court determines that the reporting no longer serves a public safety purpose."


                                                                                                                            On page 20, line 3, after "level" insert "II or"


On page 20, line 4, after "registered" strike ", for a period of five years"


On page 20, line 8, after "period of" insert "at least"


On page 20, line 8, after "community" strike "is no longer subject to" and insert "may petition the superior court to be relieved of"


On page 20, line 9, after "days." insert "The petition shall be made to the superior court in the county where the offender resides or reports under this section. The prosecuting attorney of the county shall be named and served as respondent in any such petition. The court shall relieve the petitioner of the duty to report if the petitioner shows, by a preponderance of the evidence, that the petitioner has complied with the reporting requirement for a period of at least five years and that the offender has not been convicted of a criminal violation of this section for a period of at least five years, and the court determines that the reporting no longer serves a public safety purpose."


Representatives Strow and O'Brien spoke in favor of the adoption of the amendment.


The amendment was adopted.


{{43221}}There being no objection, the rules were suspended, the second reading considered the third and the bill, as amended by the House, was placed on final passage.


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


The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Substitute Senate Bill No. 6519, as amended by the House.


ROLL CALL


The Clerk called the roll on the final passage of Substitute Senate Bill No. 6519, as amended by the House, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 98.


                                                                                                               SUBSTITUTE SENATE BILL NO. 6519, as amended by the House, having received the necessary constitutional majority, was declared passed.


SECOND READING


                                                                                                               HOUSE BILL NO. 2716, By Representatives Fromhold, Kessler, Skinner, Haigh, Strow, Moeller, Armstrong, Conway, Curtis, Murray, Buri, Green, Ericksen, Serben, McDermott, Morrell, McIntire, Appleton, Kenney, P. Sullivan, Ormsby and Linville


                                                                                                               Modifying provisions relating to nursing facility medicaid payment systems.


                                                                                                               The bill was read the second time.


{{43223}}                                                                                                               Representative Cody moved the adoption of amendment (1166):


                                                                                                                            Strike everything after the enacting clause and insert the following:


                                                                                                                            "Sec. 1. RCW 74.46.020 and 2001 1st sp.s. c 8 s 1 are each amended to read as follows:

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

                                                                                                                            (1) "Accrual method of accounting" means a method of accounting in which revenues are reported in the period when they are earned, regardless of when they are collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid.

                                                                                                                            (2) "Appraisal" means the process of estimating the fair market value or reconstructing the historical cost of an asset acquired in a past period as performed by a professionally designated real estate appraiser with no pecuniary interest in the property to be appraised. It includes a systematic, analytic determination and the recording and analyzing of property facts, rights, investments, and values based on a personal inspection and inventory of the property.

                                                                                                                            (3) "Arm's-length transaction" means a transaction resulting from good-faith bargaining between a buyer and seller who are not related organizations and have adverse positions in the market place. Sales or exchanges of nursing home facilities among two or more parties in which all parties subsequently continue to own one or more of the facilities involved in the transactions shall not be considered as arm's-length transactions for purposes of this chapter. Sale of a nursing home facility which is subsequently leased back to the seller within five years of the date of sale shall not be considered as an arm's-length transaction for purposes of this chapter.

                                                                                                                            (4) "Assets" means economic resources of the contractor, recognized and measured in conformity with generally accepted accounting principles.

                                                                                                                             (5) "Audit" or "department audit" means an examination of the records of a nursing facility participating in the medicaid payment system, including but not limited to: The contractor's financial and statistical records, cost reports and all supporting documentation and schedules, receivables, and resident trust funds, to be performed as deemed necessary by the department and according to department rule.

(6) "Bad debts" means amounts considered to be uncollectible from accounts and notes receivable.

(7) "Beneficial owner" means:

(a) Any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

(i) Voting power which includes the power to vote, or to direct the voting of such ownership interest; and/or

(ii) Investment power which includes the power to dispose, or to direct the disposition of such ownership interest;

(b) Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement, or any other contract, arrangement, or device with the purpose or effect of divesting himself or herself of beneficial ownership of an ownership interest or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the reporting requirements of this chapter;

(c) Any person who, subject to (b) of this subsection, has the right to acquire beneficial ownership of such ownership interest within sixty days, including but not limited to any right to acquire:

(i) Through the exercise of any option, warrant, or right;

(ii) Through the conversion of an ownership interest;

(iii) Pursuant to the power to revoke a trust, discretionary account, or similar arrangement; or

(iv) Pursuant to the automatic termination of a trust, discretionary account, or similar arrangement;

except that, any person who acquires an ownership interest or power specified in (c)(i), (ii), or (iii) of this subsection with the purpose or effect of changing or influencing the control of the contractor, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the beneficial owner of the ownership interest which may be acquired through the exercise or conversion of such ownership interest or power;

 (d) Any person who in the ordinary course of business is a pledgee of ownership interest under a written pledge agreement shall not be deemed to be the beneficial owner of such pledged ownership interest until the pledgee has taken all formal steps necessary which are required to declare a default and determines that the power to vote or to direct the vote or to dispose or to direct the disposition of such pledged ownership interest will be exercised; except that:

(i) The pledgee agreement is bona fide and was not entered into with the purpose nor with the effect of changing or influencing the control of the contractor, nor in connection with any transaction having such purpose or effect, including persons meeting the conditions set forth in (b) of this subsection; and

(ii) The pledgee agreement, prior to default, does not grant to the pledgee:

(A) The power to vote or to direct the vote of the pledged ownership interest; or

(B) The power to dispose or direct the disposition of the pledged ownership interest, other than the grant of such power(s) pursuant to a pledge agreement under which credit is extended and in which the pledgee is a broker or dealer.

(8) "Capitalization" means the recording of an expenditure as an asset.

(9) "Case mix" means a measure of the intensity of care and services needed by the residents of a nursing facility or a group of residents in the facility.


                                                                                                                            (10) "Case mix index" means a number representing the average case mix of a nursing facility.

                                                                                                                            (11) "Case mix weight" means a numeric score that identifies the relative resources used by a particular group of a nursing facility's residents.

                                                                                                                            (12) "Certificate of capital authorization" means a certification from the department for an allocation from the biennial capital financing authorization for all new or replacement building construction, or for major renovation projects, receiving a certificate of need or a certificate of need exemption under chapter 70.38 RCW after July 1, 2001.

                                                                                                                            (13) "Contractor" means a person or entity licensed under chapter 18.51 RCW to operate a medicare and medicaid certified nursing facility, responsible for operational decisions, and contracting with the department to provide services to medicaid recipients residing in the facility.

                                                                                                                            (14) "Default case" means no initial assessment has been completed for a resident and transmitted to the department by the cut-off date, or an assessment is otherwise past due for the resident, under state and federal requirements.

                                                                                                                            (15) "Department" means the department of social and health services (DSHS) and its employees.

                                                                                                                            (16) "Depreciation" means the systematic distribution of the cost or other basis of tangible assets, less salvage, over the estimated useful life of the assets.

                                                                                                                            (17) "Direct care" means nursing care and related care provided to nursing facility residents. Therapy care shall not be considered part of direct care.

                                                                                                                            (18) "Direct care supplies" means medical, pharmaceutical, and other supplies required for the direct care of a nursing facility's residents.

                                                                                                                            (19) "Entity" means an individual, partnership, corporation, limited liability company, or any other association of individuals capable of entering enforceable contracts.

                                                                                                                            (20) "Equity" means the net book value of all tangible and intangible assets less the recorded value of all liabilities, as recognized and measured in conformity with generally accepted accounting principles.

                                                                                                                            (21) "Essential community provider" means a facility which is the only nursing facility within a commuting distance radius of at least forty minutes duration, traveling by automobile.

                                                                                                                            (22) "Facility" or "nursing facility" means a nursing home licensed in accordance with chapter 18.51 RCW, excepting nursing homes certified as institutions for mental diseases, or that portion of a multiservice facility licensed as a nursing home, or that portion of a hospital licensed in accordance with chapter 70.41 RCW which operates as a nursing home.

                                                                                                                            (23) "Fair market value" means the replacement cost of an asset less observed physical depreciation on the date for which the market value is being determined.

                                                                                                                             (24) "Financial statements" means statements prepared and presented in conformity with generally accepted accounting principles including, but not limited to, balance sheet, statement of operations, statement of changes in financial position, and related notes.

                                                                                                                            (25) "Generally accepted accounting principles" means accounting principles approved by the financial accounting standards board (FASB).

                                                                                                                            (26) "Goodwill" means the excess of the price paid for a nursing facility business over the fair market value of all net identifiable tangible and intangible assets acquired, as measured in accordance with generally accepted accounting principles.

(27) "Grouper" means a computer software product that groups individual nursing facility residents into case mix classification groups based on specific resident assessment data and computer logic.

(28) "High labor-cost county" means an urban county in which the median allowable facility cost per case mix unit is more than ten percent higher than the median allowable facility cost per case mix unit among all other urban counties, excluding that county.

(29) "Historical cost" means the actual cost incurred in acquiring and preparing an asset for use, including feasibility studies, architect's fees, and engineering studies.

(30) "Home and central office costs" means costs that are incurred in the support and operation of a home and central office. Home and central office costs include centralized services that are performed in support of a nursing facility. The department may exclude from this definition costs that are nonduplicative, documented, ordinary, necessary, and related to the provision of care services to authorized patients.

(31) "Imprest fund" means a fund which is regularly replenished in exactly the amount expended from it.

(32) "Joint facility costs" means any costs which represent resources which benefit more than one facility, or one facility and any other entity.

(33) "Lease agreement" means a contract between two parties for the possession and use of real or personal property or assets for a specified period of time in exchange for specified periodic payments. Elimination (due to any cause other than death or divorce) or addition of any party to the contract, expiration, or modification of any lease term in effect on January 1, 1980, or termination of the lease by either party by any means shall constitute a termination of the lease agreement. An extension or renewal of a lease agreement, whether or not pursuant to a renewal provision in the lease agreement, shall be considered a new lease agreement. A strictly formal change in the lease agreement which modifies the method, frequency, or manner in which the lease payments are made, but does not increase the total lease payment obligation of the lessee, shall not be considered modification of a lease term.

(34) "Medical care program" or "medicaid program" means medical assistance, including nursing care, provided under RCW 74.09.500 or authorized state medical care services.

(35) "Medical care recipient," "medicaid recipient," or "recipient" means an individual determined eligible by the department for the services provided under chapter 74.09 RCW.

(36) "Minimum data set" means the overall data component of the resident assessment instrument, indicating the strengths, needs, and preferences of an individual nursing facility resident.

(37) "Net book value" means the historical cost of an asset less accumulated depreciation.

(38) "Net invested funds" means the net book value of tangible fixed assets employed by a contractor to provide services under the medical care program, including land, buildings, and equipment as recognized and measured in conformity with generally accepted accounting principles.

(39) "Nonurban county" means a county which is not located in a metropolitan statistical area as determined and defined by the United States office of management and budget or other appropriate agency or office of the federal government.

(40) "Operating lease" means a lease under which rental or lease expenses are included in current expenses in accordance with generally accepted accounting principles.

(41) "Owner" means a sole proprietor, general or limited partners, members of a limited liability company, and beneficial interest holders of five percent or more of a corporation's outstanding stock.

                                                                                                                            (42) "Ownership interest" means all interests beneficially owned by a person, calculated in the aggregate, regardless of the form which such beneficial ownership takes.

                                                                                                                             (43) "Patient day" or "resident day" means a calendar day of care provided to a nursing facility resident, regardless of payment source, which will include the day of admission and exclude the day of discharge; except that, when admission and discharge occur on the same day, one day of care shall be deemed to exist. A "medicaid day" or "recipient day" means a calendar day of care provided to a medicaid recipient determined eligible by the department for services provided under chapter 74.09 RCW, subject to the same conditions regarding admission and discharge applicable to a patient day or resident day of care.

                                                                                                                            (44) "Professionally designated real estate appraiser" means an individual who is regularly engaged in the business of providing real estate valuation services for a fee, and who is deemed qualified by a nationally recognized real estate appraisal educational organization on the basis of extensive practical appraisal experience, including the writing of real estate valuation reports as well as the passing of written examinations on valuation practice and theory, and who by virtue of membership in such organization is required to subscribe and adhere to certain standards of professional practice as such organization prescribes.

                                                                                                                            (45) "Qualified therapist" means:

                                                                                                                            (a) A mental health professional as defined by chapter 71.05 RCW;

                                                                                                                            (b) A mental retardation professional who is a therapist approved by the department who has had specialized training or one year's experience in treating or working with the mentally retarded or developmentally disabled;

                                                                                                                            (c) A speech pathologist who is eligible for a certificate of clinical competence in speech pathology or who has the equivalent education and clinical experience;

                                                                                                                            (d) A physical therapist as defined by chapter 18.74 RCW;

                                                                                                                            (e) An occupational therapist who is a graduate of a program in occupational therapy, or who has the equivalent of such education or training; and

                                                                                                                            (f) A respiratory care practitioner certified under chapter 18.89 RCW.

                                                                                                                            (46) "Rate" or "rate allocation" means the medicaid per-patient-day payment amount for medicaid patients calculated in accordance with the allocation methodology set forth in part E of this chapter.

                                                                                                                             (47) "Real property," whether leased or owned by the contractor, means the building, allowable land, land improvements, and building improvements associated with a nursing facility.

                                                                                                                            (48) "Rebased rate" or "cost-rebased rate" means a facility-specific component rate assigned to a nursing facility for a particular rate period established on desk-reviewed, adjusted costs reported for that facility covering at least six months of a prior calendar year designated as a year to be used for cost-rebasing payment rate allocations under the provisions of this chapter.

                                                                                                                            (49) "Records" means those data supporting all financial statements and cost reports including, but not limited to, all general and subsidiary ledgers, books of original entry, and transaction documentation, however such data are maintained.

                                                                                                                            (50) "Related organization" means an entity which is under common ownership and/or control with, or has control of, or is controlled by, the contractor.

(a) "Common ownership" exists when an entity is the beneficial owner of five percent or more ownership interest in the contractor and any other entity.

(b) "Control" exists where an entity has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution, whether or not it is legally enforceable and however it is exercisable or exercised.

(51) "Related care" means only those services that are directly related to providing direct care to nursing facility residents. These services include, but are not limited to, nursing direction and supervision, medical direction, medical records, pharmacy services, activities, and social services.

(52) "Resident assessment instrument," including federally approved modifications for use in this state, means a federally mandated, comprehensive nursing facility resident care planning and assessment tool, consisting of the minimum data set and resident assessment protocols.

(53) "Resident assessment protocols" means those components of the resident assessment instrument that use the minimum data set to trigger or flag a resident's potential problems and risk areas.

(54) "Resource utilization groups" means a case mix classification system that identifies relative resources needed to care for an individual nursing facility resident.

(55) "Restricted fund" means those funds the principal and/or income of which is limited by agreement with or direction of the donor to a specific purpose.

(56) "Secretary" means the secretary of the department of social and health services.

(57) "Support services" means food, food preparation, dietary, housekeeping, and laundry services provided to nursing facility residents.

(58) "Therapy care" means those services required by a nursing facility resident's comprehensive assessment and plan of care, that are provided by qualified therapists, or support personnel under their supervision, including related costs as designated by the department.

(59) "Title XIX" or "medicaid" means the 1965 amendments to the social security act, P.L. 89-07, as amended and the medicaid program administered by the department.

(60) "Urban county" means a county which is located in a metropolitan statistical area as determined and defined by the United States office of management and budget or other appropriate agency or office of the federal government.

(61) "Vital local provider" means a facility reporting a home office that meets the following qualifications:

(a) The home office address is located in Washington state; and

(b) The sum of medicaid days for all Washington facilities reporting the home office as their home office was greater than two hundred fifteen thousand in 2003.


Sec. 2. RCW 74.46.431 and 2005 c 518 s 944 are each amended to read as follows:

(1) Effective July 1, 1999, nursing facility medicaid payment rate allocations shall be facility-specific and shall have seven components: Direct care, therapy care, support services, operations, property, financing allowance, and variable return. The department shall establish and adjust each of these components, as provided in this section and elsewhere in this chapter, for each medicaid nursing facility in this state.

 (2) ((All)) Component rate allocations in therapy care, support services, variable return, operations, property, and financing allowance for essential community providers as defined in this chapter shall be based upon a minimum facility occupancy of eighty-five percent of licensed beds, regardless of how many beds are set up or in use. For all facilities other than essential community providers, effective July 1, 2001, component rate allocations in direct care, therapy care, support services, variable return, operations, property, and financing allowance shall continue to be based upon a minimum facility occupancy of eighty-five percent of licensed beds. For all facilities other than essential community providers, effective July 1, 2002, the component rate allocations in operations, property, and financing allowance shall be based upon a minimum facility occupancy of ninety percent of licensed beds, regardless of how many beds are set up or in use. For all facilities, effective July 1, 2006, the component rate allocation in direct care shall be based upon actual facility occupancy.

                                                                                                                            (3) Information and data sources used in determining medicaid payment rate allocations, including formulas, procedures, cost report periods, resident assessment instrument formats, resident assessment methodologies, and resident classification and case mix weighting methodologies, may was substituted or altered from time to time as determined by the department.

                                                                                                                            (4)(a) Direct care component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 will be used for October 1, 1998, through June 30, 2001, direct care component rate allocations; adjusted cost report data from 1999 will be used for July 1, 2001, through June 30, ((2005)) 2006, direct care component rate allocations. Adjusted cost report data from ((1999)) 2003 will ((continue to)) be used for July 1, ((2005)) 2006, and later direct care component rate allocations.

                                                                                                                            (b) Direct care component rate allocations based on 1996 cost report data shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act. A different economic trends and conditions adjustment factor or factors may be defined in the biennial appropriations act for facilities whose direct care component rate is set equal to their adjusted June 30, 1998, rate, as provided in RCW 74.46.506(5)(i).

                                                                                                                             (c) Direct care component rate allocations based on 1999 cost report data shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act. A different economic trends and conditions adjustment factor or factors may be defined in the biennial appropriations act for facilities whose direct care component rate is set equal to their adjusted June 30, 1998, rate, as provided in RCW 74.46.506(5)(i).

(d) Direct care component rate allocations based on 2003 cost report data shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act. A different economic trends and conditions adjustment factor or factors may be defined in the biennial appropriations act for facilities whose direct care component rate is set equal to their adjusted June 30, 2006, rate, as provided in RCW 74.46.506(5)(i).

                                                                                                                            (5)(a) Therapy care component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 will be used for October 1, 1998, through June 30, 2001, therapy care component rate allocations; adjusted cost report data from 1999 will be used for July 1, 2001, through June 30, 2005, therapy care component rate allocations. Adjusted cost report data from 1999 will continue to be used for July 1, 2005, and later therapy care component rate allocations.

                                                                                                                            (b) Therapy care component rate allocations shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act.

(6)(a) Support services component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 shall be used for October 1, 1998, through June 30, 2001, support services component rate allocations; adjusted cost report data from 1999 shall be used for July 1, 2001, through June 30, 2005, support services component rate allocations. Adjusted cost report data from 1999 will continue to be used for July 1, 2005, and later support services component rate allocations.

(b) Support services component rate allocations shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act.

(7)(a) Operations component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 shall be used for October 1, 1998, through June 30, 2001, operations component rate allocations; adjusted cost report data from 1999 shall be used for July 1, 2001, through June 30, ((2005)) 2006, operations component rate allocations. Adjusted cost report data from ((1999)) 2003 will ((continue to)) be used for July 1, ((2005)) 2006, and later operations component rate allocations.

(b) Operations component rate allocations shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act. A different economic trends and conditions adjustment factor or factors may be defined in the biennial appropriations act for facilities whose operations component rate is set equal to their adjusted June 30, 2006, rate, as provided in RCW 74.46.521(4).

(8) For July 1, 1998, through September 30, 1998, a facility's property and return on investment component rates shall be the facility's June 30, 1998, property and return on investment component rates, without increase. For October 1, 1998, through June 30, 1999, a facility's property and return on investment component rates shall be rebased utilizing 1997 adjusted cost report data covering at least six months of data.

(9) Total payment rates under the nursing facility medicaid payment system shall not exceed facility rates charged to the general public for comparable services.

(10) Medicaid contractors shall pay to all facility staff a minimum wage of the greater of the state minimum wage or the federal minimum wage.

(11) The department shall establish in rule procedures, principles, and conditions for determining component rate allocations for facilities in circumstances not directly addressed by this chapter, including but not limited to: The need to prorate inflation for partial-period cost report data, newly constructed facilities, existing facilities entering the medicaid program for the first time or after a period of absence from the program, existing facilities with expanded new bed capacity, existing medicaid facilities following a change of ownership of the nursing facility business, facilities banking beds or converting beds back into service, facilities temporarily reducing the number of set-up beds during a remodel, facilities having less than six months of either resident assessment, cost report data, or both, under the current contractor prior to rate setting, and other circumstances.

(12) The department shall establish in rule procedures, principles, and conditions, including necessary threshold costs, for adjusting rates to reflect capital improvements or new requirements imposed by the department or the federal government. Any such rate adjustments are subject to the provisions of RCW 74.46.421.

(13) Effective July 1, 2001, medicaid rates shall continue to be revised downward in all components, in accordance with department rules, for facilities converting banked beds to active service under chapter 70.38 RCW, by using the facility's increased licensed bed capacity to recalculate minimum occupancy for rate setting. However, for facilities other than essential community providers which bank beds under chapter 70.38 RCW, after May 25, 2001, medicaid rates shall be revised upward, in accordance with department rules, in direct care, therapy care, support services, and variable return components only, by using the facility's decreased licensed bed capacity to recalculate minimum occupancy for rate setting, but no upward revision shall be made to operations, property, or financing allowance component rates. The direct care component rate allocation shall be adjusted, without using the minimum occupancy assumption, for facilities that convert banked beds to active service, under chapter 70.38 RCW, beginning on July 1, 2006.

                                                                                                                            (14) Facilities obtaining a certificate of need or a certificate of need exemption under chapter 70.38 RCW after June 30, 2001, must have a certificate of capital authorization in order for (a) the depreciation resulting from the capitalized addition to be included in calculation of the facility's property component rate allocation; and (b) the net invested funds associated with the capitalized addition to be included in calculation of the facility's financing allowance rate allocation.


                                                                                                                            Sec. 3. RCW 74.46.433 and 2001 1st sp.s. c 8 s 6 are each amended to read as follows:

                                                                                                                            (1) The department shall establish for each medicaid nursing facility a variable return component rate allocation. In determining the variable return allowance:

                                                                                                                            (a) Except as provided in (e) of this subsection, the variable return array and percentage shall be assigned whenever rebasing of noncapital rate allocations is scheduled under RCW ((46.46.431 [74.46.431])) 74.46.431 (4), (5), (6), and (7).

                                                                                                                            (b) To calculate the array of facilities for the July 1, 2001, rate setting, the department, without using peer groups, shall first rank all facilities in numerical order from highest to lowest according to each facility's examined and documented, but unlidded, combined direct care, therapy care, support services, and operations per resident day cost from the 1999 cost report period. However, before being combined with other per resident day costs and ranked, a facility's direct care cost per resident day shall be adjusted to reflect its facility average case mix index, to be averaged from the four calendar quarters of 1999, weighted by the facility's resident days from each quarter, under RCW 74.46.501(7)(b)(ii). The array shall then be divided into four quartiles, each containing, as nearly as possible, an equal number of facilities, and four percent shall be assigned to facilities in the lowest quartile, three percent to facilities in the next lowest quartile, two percent to facilities in the next highest quartile, and one percent to facilities in the highest quartile.

                                                                                                                            (c) The department shall, subject to (d) of this subsection, compute the variable return allowance by multiplying a facility's assigned percentage by the sum of the facility's direct care, therapy care, support services, and operations component rates determined in accordance with this chapter and rules adopted by the department.

                                                                                                                            (d) Effective July 1, 2001, if a facility's examined and documented direct care cost per resident day for the preceding report year is lower than its average direct care component rate weighted by medicaid resident days for the same year, the facility's direct care cost shall be substituted for its July 1, 2001, direct care component rate, and its variable return component rate shall be determined or adjusted each July 1st by multiplying the facility's assigned percentage by the sum of the facility's July 1, 2001, therapy care, support services, and operations component rates, and its direct care cost per resident day for the preceding year.

(e) Effective July 1, 2006, the variable return component rate allocation for each facility shall be the facility's June 30, 2006, variable return component rate allocation.

(2) The variable return rate allocation calculated in accordance with this section shall be adjusted to the extent necessary to comply with RCW 74.46.421.


Sec. 4. RCW 74.46.496 and 1998 c 322 s 23 are each amended to read as follows:

(1) Each case mix classification group shall be assigned a case mix weight. The case mix weight for each resident of a nursing facility for each calendar quarter shall be based on data from resident assessment instruments completed for the resident and weighted by the number of days the resident was in each case mix classification group. Days shall be counted as provided in this section.

(2) The case mix weights shall be based on the average minutes per registered nurse, licensed practical nurse, and certified nurse aide, for each case mix group, and using the health care financing administration of the United States department of health and human services 1995 nursing facility staff time measurement study stemming from its multistate nursing home case mix and quality demonstration project. Those minutes shall be weighted by statewide ratios of registered nurse to certified nurse aide, and licensed practical nurse to certified nurse aide, wages, including salaries and benefits, which shall be based on 1995 cost report data for this state.

(3) The case mix weights shall be determined as follows:

(a) Set the certified nurse aide wage weight at 1.000 and calculate wage weights for registered nurse and licensed practical nurse average wages by dividing the certified nurse aide average wage into the registered nurse average wage and licensed practical nurse average wage;

(b) Calculate the total weighted minutes for each case mix group in the resource utilization group III classification system by multiplying the wage weight for each worker classification by the average number of minutes that classification of worker spends caring for a resident in that resource utilization group III classification group, and summing the products;

 (c) Assign a case mix weight of 1.000 to the resource utilization group III classification group with the lowest total weighted minutes and calculate case mix weights by dividing the lowest group's total weighted minutes into each group's total weighted minutes and rounding weight calculations to the third decimal place.

(4) The case mix weights in this state may be revised if the health care financing administration updates its nursing facility staff time measurement studies. The case mix weights shall be revised, but only when direct care component rates are cost-rebased as provided in subsection (5) of this section, to be effective on the July 1st effective date of each cost-rebased direct care component rate. However, the department may revise case mix weights more frequently if, and only if, significant variances in wage ratios occur among direct care staff in the different caregiver classifications identified in this section.

(5) Case mix weights shall be revised when direct care component rates are cost-rebased ((every three years)) as provided in RCW 74.46.431(4)(((a))).


Sec. 5. RCW 74.46.501 and 2001 1st sp.s. c 8 s 9 are each amended to read as follows:

(1) From individual case mix weights for the applicable quarter, the department shall determine two average case mix indexes for each medicaid nursing facility, one for all residents in the facility, known as the facility average case mix index, and one for medicaid residents, known as the medicaid average case mix index.

                                                                                                                            (2)(a) In calculating a facility's two average case mix indexes for each quarter, the department shall include all residents or medicaid residents, as applicable, who were physically in the facility during the quarter in question based on the resident assessment instrument completed by the facility and the requirements and limitations for the instrument's completion and transmission (January 1st through March 31st, April 1st through June 30th, July 1st through September 30th, or October 1st through December 31st).

                                                                                                                            (b) The facility average case mix index shall exclude all default cases as defined in this chapter. However, the medicaid average case mix index shall include all default cases.

                                                                                                                             (3) Both the facility average and the medicaid average case mix indexes shall be determined by multiplying the case mix weight of each resident, or each medicaid resident, as applicable, by the number of days, as defined in this section and as applicable, the resident was at each particular case mix classification or group, and then averaging.

                                                                                                                            (4)(a) In determining the number of days a resident is classified into a particular case mix group, the department shall determine a start date for calculating case mix grouping periods as follows:

                                                                                                                            (i) If a resident's initial assessment for a first stay or a return stay in the nursing facility is timely completed and transmitted to the department by the cutoff date under state and federal requirements and as described in subsection (5) of this section, the start date shall be the later of either the first day of the quarter or the resident's facility admission or readmission date;

                                                                                                                            (ii) If a resident's significant change, quarterly, or annual assessment is timely completed and transmitted to the department by the cutoff date under state and federal requirements and as described in subsection (5) of this section, the start date shall be the date the assessment is completed;

                                                                                                                            (iii) If a resident's significant change, quarterly, or annual assessment is not timely completed and transmitted to the department by the cutoff date under state and federal requirements and as described in subsection (5) of this section, the start date shall be the due date for the assessment.

                                                                                                                            (b) If state or federal rules require more frequent assessment, the same principles for determining the start date of a resident's classification in a particular case mix group set forth in subsection (4)(a) of this section shall apply.

                                                                                                                            (c) In calculating the number of days a resident is classified into a particular case mix group, the department shall determine an end date for calculating case mix grouping periods as follows:

                                                                                                                            (i) If a resident is discharged before the end of the applicable quarter, the end date shall be the day before discharge;

                                                                                                                            (ii) If a resident is not discharged before the end of the applicable quarter, the end date shall be the last day of the quarter;

                                                                                                                            (iii) If a new assessment is due for a resident or a new assessment is completed and transmitted to the department, the end date of the previous assessment shall be the earlier of either the day before the assessment is due or the day before the assessment is completed by the nursing facility.

                                                                                                                            (5) The cutoff date for the department to use resident assessment data, for the purposes of calculating both the facility average and the medicaid average case mix indexes, and for establishing and updating a facility's direct care component rate, shall be one month and one day after the end of the quarter for which the resident assessment data applies.

                                                                                                                            (6) A threshold of ninety percent, as described and calculated in this subsection, shall be used to determine the case mix index each quarter. The threshold shall also be used to determine which facilities' costs per case mix unit are included in determining the ceiling, floor, and price. For direct care component rate allocations established on and after July 1, 2006, the threshold of ninety percent shall be used to determine the case mix index each quarter and to determine which facilities' costs per case mix unit are included in determining the ceiling and price. If the facility does not meet the ninety percent threshold, the department may use an alternate case mix index to determine the facility average and medicaid average case mix indexes for the quarter. The threshold is a count of unique minimum data set assessments, and it shall include resident assessment instrument tracking forms for residents discharged prior to completing an initial assessment. The threshold is calculated by dividing a facility's count of residents being assessed by the average census for the facility. A daily census shall be reported by each nursing facility as it transmits assessment data to the department. The department shall compute a quarterly average census based on the daily census. If no census has been reported by a facility during a specified quarter, then the department shall use the facility's licensed beds as the denominator in computing the threshold.

(7)(a) Although the facility average and the medicaid average case mix indexes shall both be calculated quarterly, the facility average case mix index will be used ((only every three years)) throughout the applicable cost-rebasing period in combination with cost report data as specified by RCW 74.46.431 and 74.46.506, to establish a facility's allowable cost per case mix unit. A facility's medicaid average case mix index shall be used to update a nursing facility's direct care component rate quarterly.

(b) The facility average case mix index used to establish each nursing facility's direct care component rate shall be based on an average of calendar quarters of the facility's average case mix indexes.

(i) For October 1, 1998, direct care component rates, the department shall use an average of facility average case mix indexes from the four calendar quarters of 1997.

(ii) For July 1, 2001, direct care component rates, the department shall use an average of facility average case mix indexes from the four calendar quarters of 1999.

(iii) Beginning on July 1, 2006, when establishing the direct care component rates, the department shall use an average of facility case mix indexes from the four calendar quarters occurring during the cost report period used to rebase the direct care component rate allocations as specified in RCW 74.46.431.

(c) The medicaid average case mix index used to update or recalibrate a nursing facility's direct care component rate quarterly shall be from the calendar quarter commencing six months prior to the effective date of the quarterly rate. For example, October 1, 1998, through December 31, 1998, direct care component rates shall utilize case mix averages from the April 1, 1998, through June 30, 1998, calendar quarter, and so forth.


Sec. 6. RCW 74.46.506 and 2001 1st sp.s. c 8 s 10 are each amended to read as follows:

(1) The direct care component rate allocation corresponds to the provision of nursing care for one resident of a nursing facility for one day, including direct care supplies. Therapy services and supplies, which correspond to the therapy care component rate, shall be excluded. The direct care component rate includes elements of case mix determined consistent with the principles of this section and other applicable provisions of this chapter.

(2) Beginning October 1, 1998, the department shall determine and update quarterly for each nursing facility serving medicaid residents a facility-specific per-resident day direct care component rate allocation, to be effective on the first day of each calendar quarter. In determining direct care component rates the department shall utilize, as specified in this section, minimum data set resident assessment data for each resident of the facility, as transmitted to, and if necessary corrected by, the department in the resident assessment instrument format approved by federal authorities for use in this state.

                                                                                                                            (3) The department may question the accuracy of assessment data for any resident and utilize corrected or substitute information, however derived, in determining direct care component rates. The department is authorized to impose civil fines and to take adverse rate actions against a contractor, as specified by the department in rule, in order to obtain compliance with resident assessment and data transmission requirements and to ensure accuracy.

                                                                                                                            (4) Cost report data used in setting direct care component rate allocations shall be 1996 ((and)), 1999, and 2003 for rate periods as specified in RCW 74.46.431(4)(a).

                                                                                                                            (5) Beginning October 1, 1998, the department shall rebase each nursing facility's direct care component rate allocation as described in RCW 74.46.431, adjust its direct care component rate allocation for economic trends and conditions as described in RCW 74.46.431, and update its medicaid average case mix index, consistent with the following:

                                                                                                                            (a) Reduce total direct care costs reported by each nursing facility for the applicable cost report period specified in RCW 74.46.431(4)(a) to reflect any department adjustments, and to eliminate reported resident therapy costs and adjustments, in order to derive the facility's total allowable direct care cost;

                                                                                                                            (b) Divide each facility's total allowable direct care cost by its adjusted resident days for the same report period, increased if necessary to a minimum occupancy of eighty-five percent; that is, the greater of actual or imputed occupancy at eighty-five percent of licensed beds, to derive the facility's allowable direct care cost per resident day. However, effective July 1, 2006, each facility's allowable direct care costs shall be divided by its adjusted resident days without application of a minimum occupancy assumption;

                                                                                                                            (c) Adjust the facility's per resident day direct care cost by the applicable factor specified in RCW 74.46.431(4) (b) ((and)), (c), and (d) to derive its adjusted allowable direct care cost per resident day;

                                                                                                                             (d) Divide each facility's adjusted allowable direct care cost per resident day by the facility average case mix index for the applicable quarters specified by RCW 74.46.501(7)(b) to derive the facility's allowable direct care cost per case mix unit;

                                                                                                                            (e) Effective for July 1, 2001, rate setting, divide nursing facilities into at least two and, if applicable, three peer groups: Those located in nonurban counties; those located in high labor-cost counties, if any; and those located in other urban counties;

                                                                                                                            (f) Array separately the allowable direct care cost per case mix unit for all facilities in nonurban counties; for all facilities in high labor-cost counties, if applicable; and for all facilities in other urban counties, and determine the median allowable direct care cost per case mix unit for each peer group;

                                                                                                                            (g) Except as provided in (i) of this subsection, from October 1, 1998, through June 30, 2000, determine each facility's quarterly direct care component rate as follows:

                                                                                                                            (i) Any facility whose allowable cost per case mix unit is less than eighty-five percent of the facility's peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to eighty-five percent of the facility's peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);

(ii) Any facility whose allowable cost per case mix unit is greater than one hundred fifteen percent of the peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to one hundred fifteen percent of the peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);

(iii) Any facility whose allowable cost per case mix unit is between eighty-five and one hundred fifteen percent of the peer group median established under (f) of this subsection shall have a direct care component rate allocation equal to the facility's allowable cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);

 (h) Except as provided in (i) of this subsection, from July 1, 2000, ((forward, and for all future rate setting)) through June 30, 2006, determine each facility's quarterly direct care component rate as follows:

(i) Any facility whose allowable cost per case mix unit is less than ninety percent of the facility's peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to ninety percent of the facility's peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);

(ii) Any facility whose allowable cost per case mix unit is greater than one hundred ten percent of the peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to one hundred ten percent of the peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);

(iii) Any facility whose allowable cost per case mix unit is between ninety and one hundred ten percent of the peer group median established under (f) of this subsection shall have a direct care component rate allocation equal to the facility's allowable cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);

(i)(i) Between October 1, 1998, and June 30, 2000, the department shall compare each facility's direct care component rate allocation calculated under (g) of this subsection with the facility's nursing services component rate in effect on September 30, 1998, less therapy costs, plus any exceptional care offsets as reported on the cost report, adjusted for economic trends and conditions as provided in RCW 74.46.431. A facility shall receive the higher of the two rates.

(ii) Between July 1, 2000, and June 30, 2002, the department shall compare each facility's direct care component rate allocation calculated under (h) of this subsection with the facility's direct care component rate in effect on June 30, 2000. A facility shall receive the higher of the two rates. Between July 1, 2001, and June 30, 2002, if during any quarter a facility whose rate paid under (h) of this subsection is greater than either the direct care rate in effect on June 30, 2000, or than that facility's allowable direct care cost per case mix unit calculated in (d) of this subsection multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c), the facility shall be paid in that and each subsequent quarter pursuant to (h) of this subsection and shall not be entitled to the greater of the two rates.

                                                                                                                            (iii) ((Effective)) Between July 1, 2002, and June 30, 2006, all direct care component rate allocations shall be as determined under (h) of this subsection.

(iv) Effective July 1, 2006, for all providers, except vital local providers as defined in this chapter, all direct care component rate allocations shall be as determined under (j) of this subsection.

                                                                                                                            (v) Effective July 1, 2006, for vital local providers, as defined in this chapter, direct care component rate allocations shall be determined as follows:

                                                                                                                            (A) The department shall calculate:

                                                                                                                            (I) The sum of each facility's July 1, 2006, direct care component rate allocation calculated under (j) of this subsection and July 1, 2006, operations component rate calculated under RCW 74.46.521; and

                                                                                                                            (II) The sum of each facility's June 30, 2006, direct care and operations component rates.

                                                                                                                            (B) If the sum calculated under (i)(v)(A)(I) of this subsection is less than the sum calculated under (i)(v)(A)(II) of this subsection, the facility shall have a direct care component rate allocation equal to the facility's June 30, 2006, direct care component rate allocation.

                                                                                                                            (C) If the sum calculated under (i)(v)(A)(I) of this subsection is greater than or equal to the sum calculated under (i)(v)(A)(II) of this subsection, the facility's direct care component rate shall be calculated under (j) of this subsection.

                                                                                                                            (j) Except as provided in (i) of this subsection, from July 1, 2006, forward, and for all future rate setting, determine each facility's quarterly direct care component rate as follows:

                                                                                                                            (i) Any facility whose allowable cost per case mix unit is greater than one hundred twelve percent of the peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to one hundred twelve percent of the peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);

                                                                                                                            (ii) Any facility whose allowable cost per case mix unit is less than or equal to one hundred twelve percent of the peer group median established under (f) of this subsection shall have a direct care component rate allocation equal to the facility's allowable cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in RCW 74.46.501(7)(c).

                                                                                                                            (6) The direct care component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with RCW 74.46.421.

                                                                                                                            (7) Costs related to payments resulting from increases in direct care component rates, granted under authority of RCW 74.46.508(1) for a facility's exceptional care residents, shall be offset against the facility's examined, allowable direct care costs, for each report year or partial period such increases are paid. Such reductions in allowable direct care costs shall be for rate setting, settlement, and other purposes deemed appropriate by the department.


                                                                                                                            Sec. 7. RCW 74.46.521 and 2001 1st sp.s. c 8 s 13 are each amended to read as follows:

                                                                                                                            (1) The operations component rate allocation corresponds to the general operation of a nursing facility for one resident for one day, including but not limited to management, administration, utilities, office supplies, accounting and bookkeeping, minor building maintenance, minor equipment repairs and replacements, and other supplies and services, exclusive of direct care, therapy care, support services, property, financing allowance, and variable return.

(2) Except as provided in subsection (4) of this section, beginning October 1, 1998, the department shall determine each medicaid nursing facility's operations component rate allocation using cost report data specified by RCW 74.46.431(7)(a). Effective July 1, 2002, operations component rates for all facilities except essential community providers shall be based upon a minimum occupancy of ninety percent of licensed beds, and no operations component rate shall be revised in response to beds banked on or after May 25, 2001, under chapter 70.38 RCW.

 (3) Except as provided in subsection (4) of this section, to determine each facility's operations component rate the department shall:

(a) Array facilities' adjusted general operations costs per adjusted resident day, as determined by dividing each facility's total allowable operations cost by its adjusted resident days for the same report period, increased if necessary to a minimum occupancy of eighty-five percent; that is, the greater of actual or imputed occupancy at eighty-five percent of licensed beds, for each facility from facilities' cost reports from the applicable report year, for facilities located within urban counties and for those located within nonurban counties and determine the median adjusted cost for each peer group;

(b) Set each facility's operations component rate at the lower of:

(i) The facility's per resident day adjusted operations costs from the applicable cost report period adjusted if necessary to a minimum occupancy of eighty-five percent of licensed beds before July 1, 2002, and ninety percent effective July 1, 2002; or

(ii) The adjusted median per resident day general operations cost for that facility's peer group, urban counties or nonurban counties; and

(c) Adjust each facility's operations component rate for economic trends and conditions as provided in RCW 74.46.431(7)(b).

(4)(a) Effective July 1, 2006, for any facility whose direct care component rate allocation is set equal to its June 30, 2006, direct care component rate allocation, as provided in RCW 74.46.506(5)(i), the facility's operations component rate allocation shall also be set equal to the facility's June 30, 2006, operations component rate allocation.

(b) The operations component rate allocation for facilities whose operations component rate is set equal to their June 30, 2006, operations component rate, shall be adjusted for economic trends and conditions as provided in RCW 74.46.431(7)(b).

(5) The operations component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with RCW 74.46.421.


NEW SECTION. Sec. 8. This act takes effect July 1, 2006."


Correct the title.


Representative Cody moved the adoption of amendment (1180) to amendment (1166):


On page 25, beginning on line 7, after "occupancy of" strike "eighty-five" and insert "ninety"


On page 25, at the beginning of line 9, strike "eighty-five" and insert "ninety"



                                                                                                               Representative Cody spoke in favor of the adoption of the amendment to amendment (1166).


                                                                                                               The amendment to amendment (1166) was adopted.


                                                                                                               Amendment (1166) as amended was adopted. The bill was ordered engrossed.


{{43225}}                                                                                                               There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


                                                                                                               Representatives Cody, Hinkle, Alexander and Bailey spoke in favor of passage of the bill.


                                                                                                               The Speaker (Representative Lovick presiding) stated the question before the House to be the final passage of Engrossed House Bill No. 2716.


MOTION


                                                                                                               On motion of Representative Santos, Representative Williams was excused.


ROLL CALL


                                                                                                               The Clerk called the roll on the final passage of Engrossed House Bill No. 2716 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Excused - 1.

                                                                                                               Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, Darneille, DeBolt, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hasegawa, Hinkle, Holmquist, Hudgins, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Sommers, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Wood, Woods and Mr. Speaker - 97.

                                                                                                               Excused: Representative Williams - 1.


                                                                                                               ENGROSSED HOUSE BILL NO. 2716, having received the necessary constitutional majority, was declared passed.


                                                                                                               The Speaker assumed the chair.


{{43226}}                                                                                                                          MESSAGES FROM THE SENATE

March 7, 2006

Mr. Speaker:


The Senate concurred in the House amendment to ENGROSSED SENATE BILL NO. 6194.

Brad Hendrickson, Deputy Secretary


March 7, 2006

Mr. Speaker:


The Senate concurred in the House amendments to the following bills and passed the bills as amended by the House:

SUBSTITUTE SENATE BILL NO. 5654,

SUBSTITUTE SENATE BILL NO. 6196,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 6239,

SUBSTITUTE SENATE BILL NO. 6323,

SUBSTITUTE SENATE BILL NO. 6365,

SECOND SUBSTITUTE SENATE BILL NO. 6558,

SUBSTITUTE SENATE BILL NO. 6618,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6625,

SENATE BILL NO. 6826,

and the same are herewith transmitted.

Brad Hendrickson, Deputy Secretary


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


INTRODUCTION & FIRST READING

 

HB 3320by Representative Hinkle


AN ACT Relating to a controlled substances prescription monitoring program; amending RCW 42.56.360; adding a new chapter to Title 69 RCW; prescribing penalties; and providing an effective date.


Referred to Committee on Health Care.

 

{{43907}}HB 3321by Representative Linville


AN ACT Relating to the small business development center; creating a new section; and making an appropriation.


Referred to Committee on Appropriations.

 

{{43908}}HJM 4044by Representatives Woods, Cox, Hankins, Clements, Pearson, McDonald, Haler, Skinner, Armstrong, McCune, Curtis, Bailey, Alexander, Sump, Hinkle, Priest, Kretz, Orcutt, Condotta, Schindler, Ahern, DeBolt, Shabro, Newhouse, Serben, Strow, Nixon and Buck


Renaming the Tacoma Narrows Bridge the Fisher/Oke Bridge.


Referred to Committee on Transportation.

 

{{43909}}HJR 4227by Representatives Holmquist, Pearson, Condotta, Curtis, Cox, Ericksen, Roach, McCune, Campbell, Serben, Dunn, Talcott, McDonald, Hinkle, Buri, Schindler and Bailey


                                                                                                               Protecting the name of marriage, protecting the legal incidents of marriage and limiting court jurisdiction over marriage.


                                                                                                               Referred to Committee on Juvenile Justice & Family Law.

 

{{43910}}HJR 4228                                                                                                             by Representatives Holmquist, Anderson, Condotta, Curtis, Cox, Ericksen, Roach, McCune, Campbell, Serben, Dunn, Rodne, Talcott, McDonald, Hinkle, Buri, Schindler and Bailey


                                                                                                               Limiting judicial jurisdiction over what constitutes marriage in this state.


                                                                                                               Referred to Committee on Juvenile Justice & Family Law.

 

{{43911}}HCR 4419                                                                                                            by Representatives Armstrong, Anderson, Pearson, Condotta, Curtis, Cox, Ericksen, Roach, McCune, Serben, Dunn, Talcott, McDonald, Holmquist, Hinkle, Buri, Schindler and Bailey


                                                                                                                Exempting all bills and joint resolutions dealing with marriage from the cutoff dates established in SCR 8414.


                                                                                                               Referred to Committee on Rules.

 

ESSB 6896                                                                                                           by Senate Committee on Ways & Means (originally sponsored by Senators Prentice, Doumit, Brown, Regala, Rockefeller and Kohl-Welles)


                                                                                                               AN ACT Relating to funding state budgetary reserves including an adjustment to the state expenditure limit; amending RCW 43.135.025 and 43.135.035; reenacting and amending RCW 43.84.092 and 43.84.092; adding new sections to chapter 41.45 RCW; making appropriations; providing an effective date; providing expiration dates; and declaring an emergency.


                                                                                                               Representative Armstrong moved that the rules be suspended and HOUSE CONCURRENT RESOLUTION NO. 4419 be placed on the Second Reading calendar.


                                                                                                               Representative Armstrong spoke in favor of the motion.


                                                                                                               Representative Kessler spoke against the motion.


                                                                                                               The Speaker stated the question before the House to be the motion to suspend the rules and place House Concurrent Resolution No. 4419 on the Second Reading calendar.


ROLL CALL


The Clerk called the roll on the motion to suspend the rules and place House Concurrent Resolution No. 4419 on the Second Reading calendar, and the motion failed the House by the following vote: Yeas - 42, Nays - 56, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kretz, Kristiansen, McCune, McDonald, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Walsh and Woods - 42.

Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Green, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kilmer, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Tom, Upthegrove, Wallace, Williams, Wood and Mr. Speaker - 56.


There being no objection, the rules were suspended and ENGROSSED SUBSTITUTE SENATE BILL NO. 6896 was placed on the Second Reading calendar.


There being no objection, the remaining bills, memorial and resolutions listed on the day's introduction sheet under the fourth order of business were referred to the committees so designated.


{{43230}}There being no objection, the House advanced to the sixth order of business.


SECOND READING


{{43232}}ENGROSSED SUBSTITUTE SENATE BILL NO. 6896, By Senate Committee on Ways & Means (originally sponsored by Senators Prentice, Doumit, Brown, Regala, Rockefeller and Kohl-Welles)


Providing for state funding stabilization. (REVISED FOR ENGROSSED: Funding state budgetary reserves including an adjustment to the state expenditure limit.)


The bill was read the second time.


{{43233}}Representative Bailey moved the adoption of amendment (1184):


Beginning on page 1, line 7, strike all of section 1.


On page 2, beginning on line 6, strike all of section 2.



                                                                                                                            On page 2, line 34, after "September 1, 2006, a" strike "1.29" and insert "2.07"


                                                                                                                            On page 3, line 4, after "September 1, 2006, a" strike "0.87" and insert "2.25"


                                                                                                                            On page 3, line 9, after "January 1, 2007, a" strike "1.77" and insert "2.25"


                                                                                                                            On page 3, beginning on line 20, strike all of subsection (6) and insert the following:

                                                                                                                            "(6) Upon completion of the 2005 actuarial valuation, the pension funding council and the state actuary shall review the contribution rates for the plan 1 unfunded accrued liability for fiscal year 2008 and fiscal year 2009 and the pension funding council shall adopt contribution rates to complete a three-year phase-in schedule for the unfunded liability in the teachers' retirement system plan 1, and a four-year phase-in schedule for the unfunded liability in the public employees' retirement system plan 1, adjusted for any material changes in benefits or actuarial assumptions, methods, and experience. The expected present value of the projected contributions during the three and four-year phase-in periods shall be the same as the expected present value of the projected contributions that would have been collected for the unfunded liabilities using the rates originally recommended by the pension funding council for payment during the 2003-05, and 2005-07 fiscal biennia, as well as the projected contributions for the unfunded liabilities for the 2007-09 biennium."


                                                                                                                            On page 3, beginning on line 32, strike all of section 4 and insert the following:

                                                                                                                            "NEW SECTION. Sec. 4. (1) The sum of $102,800,000 is appropriated for the fiscal year ending June 30, 2007, from the general fund and the sum of $59,800,000 is appropriated from the special retirement contribution increase revolving account for the purposes of paying increased employer contribution rate costs for payment of the additional rates created in section 1 of this act.

                                                                                                                            (2) To facilitate the transfer of moneys from dedicated funds and accounts, the state treasurer shall transfer sufficient moneys from each dedicated fund or account, including local funds of state agencies and institutions of higher education, to the special retirement contribution increase revolving account in accordance with schedules provided by the office of financial management."


                                                                                                                            Renumber the remaining sections consecutively, and correct any internal references accordingly.


                                                                                                               Representatives Bailey, Ericksen, Clements, Chandler, Alexander, Roach, Armstrong and Newhouse spoke in favor of the adoption of the amendment.


                                                                                                               Representative Fromhold spoke against the adoption of the amendment.


{{43234}}                                                                                                               An electronic roll call vote was requested and the request was granted.


                                                                                                               The Speaker stated the question before the House to be adoption of amendment (1184) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


The Clerk called the roll on the adoption of amendment (1184) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 47, Nays - 51, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 47.

Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 51.


{{43235}}Representative Walsh moved the adoption of amendment (1177):


On page 3, beginning on line 32, strike all of sections 4, 5, and 6


Renumber remaining sections consecutively and correct title and internal references accordingly.


Representatives Walsh, Orcutt, Anderson and Ericksen spoke in favor of the adoption of the amendment.


Representative Sommers spoke against the adoption of the amendment.


{{43236}}An electronic roll call vote was requested and the request was granted..


The Speaker stated the question before the House to be adoption of amendment (1177) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


The Clerk called the roll on the adoption of amendment (1177) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 47, Nays - 51, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 47.

                                                                                                               Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood, and Mr. Speaker - 51.


{{43237}}                                                                                                               Representative Anderson moved the adoption of amendment (1173):


                                                                                                                            On page 4, line 5, after "Sec. 6." strike all material through "fund for" on line 7 and insert "The legislature finds that the voter-approved means for funding the student achievement fund have been amended in each of the last two biennia for the purposes of increasing resources to the state general fund, and that it is in the interest of the education of the children of Washington to be true to the intent of the voters when they approved Initiative No. 728. The legislature therefore resolves to restore the originally intended revenue distribution from the state property tax levy for"

 


                                                                                                                            On page 14, after line 12, insert the following:

                                                                                                                            "Sec. 11. RCW 84.52.068 and 2005 c 514 s 1104 are each amended to read as follows:

                                                                                                                            (1) A portion of the proceeds of the state property tax levy shall be deposited into the student achievement fund as provided in this section.

                                                                                                                            (2)(a) The amount of the deposit shall be based upon the average number of full-time equivalent students in the school districts during the previous school year as reported to the office of the superintendent of public instruction by August 31st of the previous school year.

                                                                                                                            (b) ((For the 2004-2005 through 2007-2008 school years, an annual amount equal to two hundred fifty-four dollars per full-time equivalent student in all school districts shall be deposited in the student achievement fund.

                                                                                                                            (c) For the 2008-2009 school year, an annual amount equal to two hundred sixty-five dollars per full-time equivalent student in all school districts shall be deposited in the student achievement fund.

                                                                                                                            (d) For the 2009-2010 school year, an annual amount equal to two hundred seventy-seven dollars per full-time equivalent student in all school districts shall be deposited in the student achievement fund.

                                                                                                                            (e) For the 2010-2011 school year and each year thereafter, an annual amount equal to two hundred seventy-eight dollars per full-time equivalent student in all school districts shall be deposited in the student achievement fund)) For the 2005-06 school year, an amount equal to three hundred dollars per full-time equivalent student in all school districts shall be deposited in the student achievement fund.

                                                                                                                            (c) For the 2006-07 school year, an amount equal to three hundred seventy-five dollars per full-time equivalent student in all school districts shall be deposited in the student achievement fund.

(d) For the 2007-08 school year, an amount equal to four hundred fifty dollars per full-time equivalent student in all school districts shall be deposited in the student achievement fund.

(e) For each subsequent school year, the amount deposited per full- time equivalent student shall be adjusted for inflation.

(f) The school district annual amounts shall be deposited based on the monthly apportionment schedule as defined in RCW 28A.510.250. The office of the superintendent of public instruction shall notify the department of the monthly amounts to be deposited into the student achievement fund to meet the apportionment schedule.

(3) For the purposes of this section, "inflation" means the percentage change in the implicit price deflator for the United States for each fiscal year as published by the federal bureau of labor statistics."


Renumber remaining sections consecutively and correct title and internal references accordingly.


Representative Anderson spoke in favor of the adoption of the amendment.


Representative Hunter spoke against the adoption of the amendment.


{{43238}}An electronic roll call vote was requested and the request was granted..


The Speaker stated the question before the House to be adoption of amendment (1173) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


The Clerk called the roll on the adoption of amendment (1173) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 47, Nays - 51, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh, and Woods - 47.

Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 51.


{{43239}}Representative Anderson moved the adoption of amendment (1173):



                                                                                                                            On page 3, beginning on line 32, strike all of sections 4, 5, and 6 


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


                                                                                                               Representative Anderson spoke in favor of adoption of the amendment.


                                                                                                               Representative Hunter spoke against the adoption of the amendment.


                                                                                                               An electronic roll call vote was requested and the request was granted..


                                                                                                               The Speaker stated the question before the House to be adoption of amendment (1173) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


                                                                                                               The Clerk called the roll on the adoption of amendment (1173) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 47, Nays - 51, Excused - 0.

                                                                                                               Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 47.

                                                                                                               Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 51.


                                                                                                               Representative Buri moved the adoption of amendment (1174):


                                                                                                                            Beginning on page 4, line 9, strike all of sections 7 and 8


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


                                                                                                                            Beginning on page 14, line 14, strike all of section 12


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


Representatives Buri, Alexander, Orcutt, Ericksen, Armstrong and Kristiansen spoke in favor of the adoption of the amendment.


Representative McIntire spoke against the adoption of the amendment.


{{43240}}An electronic roll call vote was requested and the request was granted..


The Speaker stated the question before the House to be adoption of amendment (1174) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


The Clerk called the roll on the adoption of amendment (1174) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 46, Nays - 52, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 46.

Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunn, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 52.


{{43241}}Representative McDonald moved the adoption of amendment (1176):


Beginning on page 4, line 9, strike all of sections 7 and 8 and insert the following:


"Sec. 7. RCW 43.135.035 and 2005 c 72 s 2 are each amended to read as follows:

(1) After July 1, 1995, any action or combination of actions by the legislature that ((raises state revenue or requires revenue-neutral tax shifts)) constitutes a tax increase may be taken only if approved by a ((two-thirds)) three-fifths vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter. ((However, for legislation enacted between the effective date of this 2005 act and June 30, 2007, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken with the approval of a majority of members elected to each house, so long as state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter.)) This section does not apply to a tax that will be used exclusively for highway purposes under Article II, section 40 of the state Constitution.

                                                                                                                            (2)(a) If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until approved by a vote of the people at a November general election. The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.

                                                                                                                            (b) The ballot title for any vote of the people required under this section shall be substantially as follows:


                                                                                                                            "Shall taxes be imposed on . . . . . . . in order to allow a spending increase above last year's authorized spending adjusted for inflation and population increases?"


                                                                                                                            (3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a ((two-thirds)) three-fifths vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency((, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance)). The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.

                                                                                                                            (b) ((Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.)) Taxes enacted pursuant to an emergency previously declared under this section may be imposed with a favorable vote of a majority of members elected to each house of the legislature, and shall expire not later than twelve months after the effective date of the emergency declaration.

                                                                                                                            (c) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.

                                                                                                                            (4) If the cost of any state program or function is shifted from the state general fund on or after January 1, 1993, to another source of funding, or if moneys are transferred from the state general fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures.

(5) If the cost of any state program or function is shifted to the state general fund on or after January 1, 2000, from another source of funding, or if moneys are transferred to the state general fund from another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift.


Sec. 8. RCW 43.135.035 and 2005 c 72 s 5 are each amended to read as follows:

(1) After July 1, 1995, any action or combination of actions by the legislature that ((raises state revenue or requires revenue-neutral tax shifts)) constitutes a tax increase may be taken only if approved by a ((two-thirds)) three-fifths vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter. This section does not apply to a tax that will be used exclusively for highway purposes under Article II, section 40 of the state Constitution.

(2)(a) If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until approved by a vote of the people at a November general election. The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.

(b) The ballot title for any vote of the people required under this section shall be substantially as follows:


"Shall taxes be imposed on . . . . . . . in order to allow a spending increase above last year's authorized spending adjusted for personal income growth?"


(3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a ((two-thirds)) three-fifths vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency((, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance)). The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.

(b) ((Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.)) Taxes enacted pursuant to an emergency previously declared under this section may be imposed with a favorable vote of a majority of members elected to each house of the legislature, and shall expire not later than twelve months after the effective date of the emergency declaration.

(c) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.


                                                                                                                            (4) If the cost of any state program or function is shifted from the state general fund or a related fund to another source of funding, or if moneys are transferred from the state general fund or a related fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund or a related fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund or a related fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures.

                                                                                                                            (5) If the cost of any state program or function and the ongoing revenue necessary to fund the program or function are shifted to the state general fund or a related fund on or after January 1, 2007, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift."


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


                                                                                                                            On page 14, line 14, strike "Sections 7 and 8 of this act expire" and insert "Section 7 of this act expires"

 

                                                                                                                            On page 14, after line 15, insert the following:


                                                                                                                            "NEW SECTION. Sec. 13. Section 8 of this act takes effect July 1, 2007.


                                                                                                                            NEW SECTION. Sec. 14. Sections 7 and 8 of this act take effect if the proposed amendment to Article VII, section . . . of the state Constitution (HJR 4218) is validly submitted to and is approved and ratified by the voters at a general election held in November 2006. If the proposed amendment is not approved and ratified, sections 6 and 7 of this act are void in their entirety."


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


                                                                                                                            On page 14, line 16, strike "This act is" and insert "Sections 1 through 7, 9, and 10 of this act are"


                                                                                                                            On page 14, line 18, after "institutions, and" strike "takes" and insert "take"


                                                                                                               Representatives McDonald, Anderson, Orcutt, Ericksen and Serben spoke in favor of the adoption of the amendment.


                                                                                                               Representative McIntire spoke against the adoption of the amendment.


{{43242}}                                                                                                               An electronic roll call vote was requested and the request was granted..


                                                                                                               The Speaker stated the question before the House to be adoption of amendment (1176) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


The Clerk called the roll on the adoption of amendment (1176) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 47, Nays - 51, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 47.

Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 51.


{{43243}}Representative Anderson moved the adoption of amendment (1172):


Beginning on page 4, line 9, strike all of sections 7 and 8 and insert the following:


"Sec. 7. RCW 43.135.035 and 2005 c 72 s 2 are each amended to read as follows:

(1) After July 1, 1995, any action or combination of actions by the legislature that ((raises state revenue or requires revenue-neutral tax shifts)) constitutes a tax increase may be taken only if approved by a ((two-thirds)) three-fifths vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter. ((However, for legislation enacted between the effective date of this 2005 act and June 30, 2007, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken with the approval of a majority of members elected to each house, so long as state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter.)) This section does not apply to a tax that will be used exclusively for highway purposes under Article II, section 40 of the state Constitution.

(2)(a) If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until approved by a vote of the people at a November general election. The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.


                                                                                                                            (b) The ballot title for any vote of the people required under this section shall be substantially as follows:


                                                                                                                            "Shall taxes be imposed on . . . . . . . in order to allow a spending increase above last year's authorized spending adjusted for inflation and population increases?"


                                                                                                                            (3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a ((two-thirds)) three-fifths vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency((, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance)). The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.

                                                                                                                            (b) ((Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.)) Taxes enacted pursuant to an emergency previously declared under this section may be imposed with a favorable vote of a majority of members elected to each house of the legislature, and shall expire not later than twelve months after the effective date of the emergency declaration.

                                                                                                                            (c) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.

                                                                                                                            (4) If the cost of any state program or function is shifted from the state general fund on or after January 1, 1993, to another source of funding, or if moneys are transferred from the state general fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures.

                                                                                                                            (5) If the cost of any state program or function is shifted to the state general fund on or after January 1, 2000, from another source of funding, or if moneys are transferred to the state general fund from another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift.


                                                                                                                            Sec. 8. RCW 43.135.035 and 2005 c 72 s 5 are each amended to read as follows:

                                                                                                                            (1) After July 1, 1995, any action or combination of actions by the legislature that ((raises state revenue or requires revenue-neutral tax shifts)) constitutes a tax increase may be taken only if approved by a ((two-thirds)) three-fifths vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter. This section does not apply to a tax that will be used exclusively for highway purposes under Article II, section 40 of the state Constitution.

(2)(a) If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until approved by a vote of the people at a November general election. The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.

(b) The ballot title for any vote of the people required under this section shall be substantially as follows:


"Shall taxes be imposed on . . . . . . . in order to allow a spending increase above last year's authorized spending adjusted for personal income growth?"


(3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a ((two-thirds)) three-fifths vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency((, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance)). The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.

(b) ((Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.)) Taxes enacted pursuant to an emergency previously declared under this section may be imposed with a favorable vote of a majority of members elected to each house of the legislature, and shall expire not later than twelve months after the effective date of the emergency declaration.

(c) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.

(4) If the cost of any state program or function is shifted from the state general fund or a related fund to another source of funding, or if moneys are transferred from the state general fund or a related fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund or a related fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund or a related fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures.


                                                                                                                            (5) If the cost of any state program or function and the ongoing revenue necessary to fund the program or function are shifted to the state general fund or a related fund on or after January 1, 2007, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift."


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


                                                                                                                            On page 14, line 14, strike "Sections 7 and 8 of this act expire" and insert "Section 7 of this act expires"

 

                                                                                                                            On page 14, after line 15, insert the following:


                                                                                                                            "NEW SECTION. Sec. 13. Section 8 of this act takes effect July 1, 2007.


                                                                                                                            NEW SECTION. Sec. 14. Sections 7 and 8 of this act take effect if the proposed amendment to Article VII, section . . . of the state Constitution (HJR 4218) is validly submitted to and is approved and ratified by the voters at a general election held in November 2006. If the proposed amendment is not approved and ratified, sections 6 and 7 of this act are void in their entirety."


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


                                                                                                                            On page 14, line 16, strike "This act is" and insert "Sections 1 through 7, 9, and 10 of this act are"


                                                                                                                            On page 14, line 18, after "institutions, and" strike "takes" and insert "take"


                                                                                                               Representatives Anderson and Alexander spoke in favor of the adoption of the amendment.


                                                                                                               Representative McIntire spoke against the adoption of the amendment.


                                                                                                               An electronic roll call vote was requested and the request was granted..


                                                                                                               The Speaker stated the question before the House to be adoption of amendment (1172) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


                                                                                                               The Clerk called the roll on the adoption of amendment (1172) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 48, Nays - 50, Excused - 0.

                                                                                                               Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Springer, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 48.

Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 50.


{{43245}}


The Speaker called upon Representative Lovick to preside.


Representative Alexander moved the adoption of amendment (1186):


Beginning on page 4, line 9, strike all of sections 7 and 8 and insert the following:

"Sec. 7. RCW 43.41.260 and 1995 c 265 s 21 are each amended to read as follows:

The health care authority, the office of financial management, and the department of social and health services shall together monitor the enrollee level in the basic health plan and the medicaid caseload of children ((funded from the health services account)). The office of financial management shall adjust the funding levels by interagency reimbursement of funds between the basic health plan and medicaid and adjust the funding levels between the health care authority and the medical assistance administration of the department of social and health services to maximize combined enrollment.


Sec. 8. RCW 48.14.0201 and 2005 c 405 s 1 are each amended to read as follows:

(1) As used in this section, "taxpayer" means a health maintenance organization as defined in RCW 48.46.020, a health care service contractor as defined in RCW 48.44.010, or a self-funded multiple employer welfare arrangement as defined in RCW 48.125.010.

(2) Each taxpayer shall pay a tax on or before the first day of March of each year to the state treasurer through the insurance commissioner's office. The tax shall be equal to the total amount of all premiums and prepayments for health care services received by the taxpayer during the preceding calendar year multiplied by the rate of two percent.

(3) Taxpayers shall prepay their tax obligations under this section. The minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation for the preceding calendar year recomputed using the rate in effect for the current year. For the prepayment of taxes due during the first calendar year, the minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation that would have been due had the tax been in effect during the previous calendar year. The tax prepayments shall be paid to the state treasurer through the commissioner's office by the due dates and in the following amounts:

(a) On or before June 15, forty-five percent;

(b) On or before September 15, twenty-five percent;

(c) On or before December 15, twenty-five percent.


                                                                                                                            (4) For good cause demonstrated in writing, the commissioner may approve an amount smaller than the preceding calendar year's tax obligation as recomputed for calculating the health maintenance organization's, health care service contractor's, self-funded multiple employer welfare arrangement's, or certified health plan's prepayment obligations for the current tax year.

                                                                                                                            (5) Moneys collected under this section shall be deposited in the general fund ((through March 31, 1996, and in the health services account under RCW 43.72.900 after March 31, 1996)).

                                                                                                                            (6) The taxes imposed in this section do not apply to:

                                                                                                                            (a) Amounts received by any taxpayer from the United States or any instrumentality thereof as prepayments for health care services provided under Title XVIII (medicare) of the federal social security act.

                                                                                                                            (b) Amounts received by any taxpayer from the state of Washington as prepayments for health care services provided under:

                                                                                                                            (i) The medical care services program as provided in RCW 74.09.035;

                                                                                                                            (ii) The Washington basic health plan on behalf of subsidized enrollees as provided in chapter 70.47 RCW; or

                                                                                                                            (iii) The medicaid program on behalf of elderly or disabled clients as provided in chapter 74.09 RCW when these prepayments are received prior to July 1, 2009, and are associated with a managed care contract program that has been implemented on a voluntary demonstration or pilot project basis.

                                                                                                                            (c) Amounts received by any health care service contractor, as defined in RCW 48.44.010, as prepayments for health care services included within the definition of practice of dentistry under RCW 18.32.020.

                                                                                                                            (d) Participant contributions to self-funded multiple employer welfare arrangements that are not taxable in this state.

                                                                                                                            (7) Beginning January 1, 2000, the state does hereby preempt the field of imposing excise or privilege taxes upon taxpayers and no county, city, town, or other municipal subdivision shall have the right to impose any such taxes upon such taxpayers. This subsection shall be limited to premiums and payments for health benefit plans offered by health care service contractors under chapter 48.44 RCW, health maintenance organizations under chapter 48.46 RCW, and self-funded multiple employer welfare arrangements as defined in RCW 48.125.010. The preemption authorized by this subsection shall not impair the ability of a county, city, town, or other municipal subdivision to impose excise or privilege taxes upon the health care services directly delivered by the employees of a health maintenance organization under chapter 48.46 RCW.

                                                                                                                            (8)(a) The taxes imposed by this section apply to a self-funded multiple employer welfare arrangement only in the event that they are not preempted by the employee retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq. The arrangements and the commissioner shall initially request an advisory opinion from the United States department of labor or obtain a declaratory ruling from a federal court on the legality of imposing state premium taxes on these arrangements. Once the legality of the taxes has been determined, the multiple employer welfare arrangement certified by the insurance commissioner must begin payment of these taxes.

                                                                                                                            (b) If there has not been a final determination of the legality of these taxes, then beginning on the earlier of (i) the date the fourth multiple employer welfare arrangement has been certified by the insurance commissioner, or (ii) April 1, 2006, the arrangement shall deposit the taxes imposed by this section into an interest bearing escrow account maintained by the arrangement. Upon a final determination that the taxes are not preempted by the employee retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq., all funds in the interest bearing escrow account shall be transferred to the state treasurer.

(9) The effect of transferring contracts for health care services from one taxpayer to another taxpayer is to transfer the tax prepayment obligation with respect to the contracts.

(10) On or before June 1st of each year, the commissioner shall notify each taxpayer required to make prepayments in that year of the amount of each prepayment and shall provide remittance forms to be used by the taxpayer. However, a taxpayer's responsibility to make prepayments is not affected by failure of the commissioner to send, or the taxpayer to receive, the notice or forms.


Sec. 9. RCW 66.24.210 and 2001 c 124 s 1 are each amended to read as follows:

(1) There is hereby imposed upon all wines except cider sold to wine distributors and the Washington state liquor control board, within the state a tax at the rate of twenty and one-fourth cents per liter. There is hereby imposed on all cider sold to wine distributors and the Washington state liquor control board within the state a tax at the rate of three and fifty-nine one-hundredths cents per liter: PROVIDED, HOWEVER, That wine sold or shipped in bulk from one winery to another winery shall not be subject to such tax. The tax provided for in this section shall be collected by direct payments based on wine purchased by wine distributors. Every person purchasing wine under the provisions of this section shall on or before the twentieth day of each month report to the board all purchases during the preceding calendar month in such manner and upon such forms as may be prescribed by the board, and with such report shall pay the tax due from the purchases covered by such report unless the same has previously been paid. Any such purchaser of wine whose applicable tax payment is not postmarked by the twentieth day following the month of purchase will be assessed a penalty at the rate of two percent a month or fraction thereof. The board may require that every such person shall execute to and file with the board a bond to be approved by the board, in such amount as the board may fix, securing the payment of the tax. If any such person fails to pay the tax when due, the board may forthwith suspend or cancel the license until all taxes are paid.

(2) An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section. All revenues collected during any month from this additional tax shall be transferred to the state general fund by the twenty-fifth day of the following month.

(3) An additional tax is imposed on wines subject to tax under subsection (1) of this section, at the rate of one-fourth of one cent per liter for wine sold after June 30, 1987. After June 30, 1996, such additional tax does not apply to cider. An additional tax of five one- hundredths of one cent per liter is imposed on cider sold after June 30, 1996. All revenues collected under this subsection (3) shall be disbursed quarterly to the Washington wine commission for use in carrying out the purposes of chapter 15.88 RCW.

(4) An additional tax is imposed on all wine subject to tax under subsection (1) of this section. The additional tax is equal to twenty- three and forty-four one-hundredths cents per liter on fortified wine as defined in RCW 66.04.010(((38))) (39) when bottled or packaged by the manufacturer, one cent per liter on all other wine except cider, and eighteen one-hundredths of one cent per liter on cider. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.


                                                                                                                            (5)(a) An additional tax is imposed on all cider subject to tax under subsection (1) of this section. The additional tax is equal to two and four one-hundredths cents per liter of cider sold after June 30, 1996, and before July 1, 1997, and is equal to four and seven one- hundredths cents per liter of cider sold after June 30, 1997.

                                                                                                                            (b) All revenues collected from the additional tax imposed under this subsection (5) shall be deposited in the ((health services account under RCW 43.72.900)) general fund.

                                                                                                                            (6) For the purposes of this section, "cider" means table wine that contains not less than one-half of one percent of alcohol by volume and not more than seven percent of alcohol by volume and is made from the normal alcoholic fermentation of the juice of sound, ripe apples or pears. "Cider" includes, but is not limited to, flavored, sparkling, or carbonated cider and cider made from condensed apple or pear must.


                                                                                                                            Sec. 10. RCW 66.24.290 and 2003 c 167 s 5 are each amended to read as follows:

                                                                                                                            (1) Any microbrewer or domestic brewery or beer distributor licensed under this title may sell and deliver beer and strong beer to holders of authorized licenses direct, but to no other person, other than the board; and every such brewery or beer distributor shall report all sales to the board monthly, pursuant to the regulations, and shall pay to the board as an added tax for the privilege of manufacturing and selling the beer and strong beer within the state a tax of one dollar and thirty cents per barrel of thirty-one gallons on sales to licensees within the state and on sales to licensees within the state of bottled and canned beer, including strong beer, shall pay a tax computed in gallons at the rate of one dollar and thirty cents per barrel of thirty-one gallons. Any brewery or beer distributor whose applicable tax payment is not postmarked by the twentieth day following the month of sale will be assessed a penalty at the rate of two percent per month or fraction thereof. Beer and strong beer shall be sold by breweries and distributors in sealed barrels or packages. The moneys collected under this subsection shall be distributed as follows: (a) Three- tenths of a percent shall be distributed to border areas under RCW 66.08.195; and (b) of the remaining moneys: (i) Twenty percent shall be distributed to counties in the same manner as under RCW 66.08.200; and (ii) eighty percent shall be distributed to incorporated cities and towns in the same manner as under RCW 66.08.210.

                                                                                                                            (2) An additional tax is imposed on all beer and strong beer subject to tax under subsection (1) of this section. The additional tax is equal to two dollars per barrel of thirty-one gallons. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

                                                                                                                            (3)(a) An additional tax is imposed on all beer and strong beer subject to tax under subsection (1) of this section. The additional tax is equal to ninety-six cents per barrel of thirty-one gallons through June 30, 1995, two dollars and thirty-nine cents per barrel of thirty-one gallons for the period July 1, 1995, through June 30, 1997, and four dollars and seventy-eight cents per barrel of thirty-one gallons thereafter.

                                                                                                                            (b) The additional tax imposed under this subsection does not apply to the sale of the first sixty thousand barrels of beer each year by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of this exemption.

(c) All revenues collected from the additional tax imposed under this subsection (3) shall be deposited in the ((health services account under RCW 43.72.900)) general fund.

(4) An additional tax is imposed on all beer and strong beer that is subject to tax under subsection (1) of this section that is in the first sixty thousand barrels of beer and strong beer by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of the exemption under subsection (3)(b) of this section. The additional tax is equal to one dollar and forty-eight and two-tenths cents per barrel of thirty-one gallons. By the twenty-fifth day of the following month, three percent of the revenues collected from this additional tax shall be distributed to border areas under RCW 66.08.195 and the remaining moneys shall be transferred to the state general fund.

(5) The board may make refunds for all taxes paid on beer and strong beer exported from the state for use outside the state.

(6) The board may require filing with the board of a bond to be approved by it, in such amount as the board may fix, securing the payment of the tax. If any licensee fails to pay the tax when due, the board may forthwith suspend or cancel his or her license until all taxes are paid.


Sec. 11. RCW 70.05.125 and 1998 c 266 s 1 are each amended to read as follows:

(1) The county public health account is created in the state treasury. Funds deposited in the county public health account shall be distributed by the state treasurer to each local public health jurisdiction based upon amounts certified to it by the department of community, trade, and economic development in consultation with the Washington state association of counties. The account shall include funds distributed under RCW ((82.44.110 and)) 82.14.200(8) and such funds as are appropriated to the account from the ((health services account under RCW 43.72.900)) general fund, the public health services account under RCW 43.72.902, and such other funds as the legislature may appropriate to it.

(2)(a) The director of the department of community, trade, and economic development shall certify the amounts to be distributed to each local public health jurisdiction using 1995 as the base year of actual city contributions to local public health.

(b) Only if funds are available and in an amount no greater than available funds under RCW 82.14.200(8), the department of community, trade, and economic development shall adjust the amount certified under (a) of this subsection to compensate for any annexation of an area with fifty thousand residents or more to any city as a result of a petition during calendar year 1996 or 1997, or for any city that became newly incorporated as a result of an election during calendar year 1994 or 1995. The amount to be adjusted shall be equal to the amount which otherwise would have been lost to the health jurisdiction due to the annexation or incorporation as calculated using the jurisdiction's 1995 funding formula.

(c) The county treasurer shall certify the actual 1995 city contribution to the department. Funds in excess of the base shall be distributed proportionately among the health jurisdictions based on incorporated population figures as last determined by the office of financial management.

(3) Moneys distributed under this section shall be expended exclusively for local public health purposes.


Sec. 12. RCW 70.47.015 and 1997 c 337 s 1 are each amended to read as follows:


                                                                                                                            (1) The legislature finds that the basic health plan has been an effective program in providing health coverage for uninsured residents. Further, since 1993, substantial amounts of public funds have been allocated for subsidized basic health plan enrollment.

                                                                                                                            (2) It is the intent of the legislature that the basic health plan enrollment be expanded expeditiously, ((consistent with funds available in the health services account,)) with the goal of two hundred thousand adult subsidized basic health plan enrollees and one hundred thirty thousand children covered through expanded medical assistance services by June 30, 1997, with the priority of providing needed health services to children in conjunction with other public programs.

                                                                                                                            (3) Effective January 1, 1996, basic health plan enrollees whose income is less than one hundred twenty-five percent of the federal poverty level shall pay at least a ten-dollar premium share.

                                                                                                                            (4) No later than July 1, 1996, the administrator shall implement procedures whereby hospitals licensed under chapters 70.41 and 71.12 RCW, health carrier, rural health care facilities regulated under chapter 70.175 RCW, and community and migrant health centers funded under RCW 41.05.220, may expeditiously assist patients and their families in applying for basic health plan or medical assistance coverage, and in submitting such applications directly to the health care authority or the department of social and health services. The health care authority and the department of social and health services shall make every effort to simplify and expedite the application and enrollment process.

                                                                                                                            (5) No later than July 1, 1996, the administrator shall implement procedures whereby health insurance agents and brokers, licensed under chapter 48.17 RCW, may expeditiously assist patients and their families in applying for basic health plan or medical assistance coverage, and in submitting such applications directly to the health care authority or the department of social and health services. Brokers and agents may receive a commission for each individual sale of the basic health plan to anyone not signed up within the previous five years and a commission for each group sale of the basic health plan, if funding for this purpose is provided in a specific appropriation to the health care authority. No commission shall be provided upon a renewal. Commissions shall be determined based on the estimated annual cost of the basic health plan, however, commissions shall not result in a reduction in the premium amount paid to health carriers. For purposes of this section "health carrier" is as defined in RCW 48.43.005. The administrator may establish: (a) Minimum educational requirements that must be completed by the agents or brokers; (b) an appointment process for agents or brokers marketing the basic health plan; or (c) standards for revocation of the appointment of an agent or broker to submit applications for cause, including untrustworthy or incompetent conduct or harm to the public. The health care authority and the department of social and health services shall make every effort to simplify and expedite the application and enrollment process.

 

                                                                                                                            Sec. 13. RCW 82.04.260 and 2005 c 513 s 2 are each amended to read as follows:

                                                                                                                            (1) Upon every person engaging within this state in the business of manufacturing:

                                                                                                                            (a) Wheat into flour, barley into pearl barley, soybeans into soybean oil, canola into canola oil, canola meal, or canola byproducts, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business shall be equal to the value of the flour, pearl barley, oil, canola meal, or canola byproduct manufactured, multiplied by the rate of 0.138 percent;

(b) Seafood products which remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured, multiplied by the rate of 0.138 percent;

(c) Dairy products that as of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135, including byproducts from the manufacturing of the dairy products such as whey and casein; or selling the same to purchasers who transport in the ordinary course of business the goods out of state; as to such persons the tax imposed shall be equal to the value of the products manufactured multiplied by the rate of 0.138 percent. As proof of sale to a person who transports in the ordinary course of business goods out of this state, the seller shall annually provide a statement in a form prescribed by the department and retain the statement as a business record;

(d) Until July 1, 2009, alcohol fuel, biodiesel fuel, or biodiesel feedstock, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel, biodiesel fuel, or biodiesel feedstock manufactured, multiplied by the rate of 0.138 percent; and

(e) Alcohol fuel or wood biomass fuel, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel or wood biomass fuel manufactured, multiplied by the rate of 0.138 percent.

(2) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business shall be equal to the value of the peas split or processed, multiplied by the rate of 0.138 percent.

(3) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.

(4) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of 0.138 percent.

(5) Upon every person engaging within this state in the business of acting as a travel agent or tour operator; as to such persons the amount of the tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.

(6) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.

(7) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such activities multiplied by the rate of 0.275 percent. Persons subject to taxation under this subsection shall be exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.

                                                                                                                            (8) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business shall be equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of 3.3 percent.

                                                                                                                            If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state shall be determined in accordance with the methods of apportionment required under RCW 82.04.460.

                                                                                                                            (9) Upon every person engaging within this state as an insurance agent, insurance broker, or insurance solicitor licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with respect to such licensed activities shall be equal to the gross income of such business multiplied by the rate of 0.484 percent.

                                                                                                                            (10) Upon every person engaging within this state in business as a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation or by the state or any of its political subdivisions, as to such persons, the amount of tax with respect to such activities shall be equal to the gross income of the business multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5 percent thereafter. The moneys collected under this subsection shall be deposited in the ((health services account created under RCW 43.72.900)) general fund.

                                                                                                                            (11)(a) Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing commercial airplanes, or components of such airplanes, as to such persons the amount of tax with respect to such business shall, in the case of manufacturers, be equal to the value of the product manufactured, or in the case of processors for hire, be equal to the gross income of the business, multiplied by the rate of:

                                                                                                                            (i) 0.4235 percent from October 1, 2005, through the later of June 30, 2007, or the day preceding the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550; and

                                                                                                                            (ii) 0.2904 percent beginning on the later of July 1, 2007, or the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550.

                                                                                                                            (b) Beginning October 1, 2005, upon every person engaging within this state in the business of making sales, at retail or wholesale, of commercial airplanes, or components of such airplanes, manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the airplanes or components multiplied by the rate of:

(i) 0.4235 percent from October 1, 2005, through the later of June 30, 2007, or the day preceding the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550; and

(ii) 0.2904 percent beginning on the later of July 1, 2007, or the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550.

(c) For the purposes of this subsection (11), "commercial airplane," "component," and "final assembly of a superefficient airplane" have the meanings given in RCW 82.32.550.

(d) In addition to all other requirements under this title, a person eligible for the tax rate under this subsection (11) must report as required under RCW 82.32.545.

(e) This subsection (11) does not apply after the earlier of: July 1, 2024; or December 31, 2007, if assembly of a superefficient airplane does not begin by December 31, 2007, as determined under RCW 82.32.550.


Sec. 14. RCW 82.08.150 and 2003 c 167 s 11 are each amended to read as follows:

(1) There is levied and shall be collected a tax upon each retail sale of spirits in the original package at the rate of fifteen percent of the selling price. The tax imposed in this subsection shall apply to all such sales including sales by the Washington state liquor stores and agencies, but excluding sales to spirits, beer, and wine restaurant licensees.

(2) There is levied and shall be collected a tax upon each sale of spirits in the original package at the rate of ten percent of the selling price on sales by Washington state liquor stores and agencies to spirits, beer, and wine restaurant licensees.

(3) There is levied and shall be collected an additional tax upon each retail sale of spirits in the original package at the rate of one dollar and seventy-two cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to spirits, beer, and wine restaurant licensees.

(4) An additional tax is imposed equal to fourteen percent multiplied by the taxes payable under subsections (1), (2), and (3) of this section.

(5) An additional tax is imposed upon each retail sale of spirits in the original package at the rate of seven cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to spirits, beer, and wine restaurant licensees. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

(6)(a) An additional tax is imposed upon retail sale of spirits in the original package at the rate of one and seven-tenths percent of the selling price through June 30, 1995, two and six-tenths percent of the selling price for the period July 1, 1995, through June 30, 1997, and three and four-tenths of the selling price thereafter. This additional tax applies to all such sales including sales by Washington state liquor stores and agencies, but excluding sales to spirits, beer, and wine restaurant licensees.

(b) An additional tax is imposed upon retail sale of spirits in the original package at the rate of one and one-tenth percent of the selling price through June 30, 1995, one and seven-tenths percent of the selling price for the period July 1, 1995, through June 30, 1997, and two and three-tenths of the selling price thereafter. This additional tax applies to all such sales to spirits, beer, and wine restaurant licensees.

                                                                                                                            (c) An additional tax is imposed upon each retail sale of spirits in the original package at the rate of twenty cents per liter through June 30, 1995, thirty cents per liter for the period July 1, 1995, through June 30, 1997, and forty-one cents per liter thereafter. This additional tax applies to all such sales including sales by Washington state liquor stores and agencies, and including sales to spirits, beer, and wine restaurant licensees.

                                                                                                                            (d) All revenues collected during any month from additional taxes under this subsection shall be deposited in the ((health services account created under RCW 43.72.900)) general fund by the twenty-fifth day of the following month.

                                                                                                                            (7) The tax imposed in RCW 82.08.020 shall not apply to sales of spirits in the original package.

                                                                                                                            (8) The taxes imposed in this section shall be paid by the buyer to the seller, and each seller shall collect from the buyer the full amount of the tax payable in respect to each taxable sale under this section. The taxes required by this section to be collected by the seller shall be stated separately from the selling price and for purposes of determining the tax due from the buyer to the seller, it shall be conclusively presumed that the selling price quoted in any price list does not include the taxes imposed by this section.

                                                                                                                            (9) As used in this section, the terms, "spirits" and "package" shall have the meaning ascribed to them in chapter 66.04 RCW.


                                                                                                                            Sec. 15. RCW 82.24.020 and 2003 c 114 s 1 are each amended to read as follows:

                                                                                                                            (1) There is levied and there shall be collected as provided in this chapter, a tax upon the sale, use, consumption, handling, possession or distribution of all cigarettes, in an amount equal to the rate of eleven and one-half mills per cigarette.

                                                                                                                            (2) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of five and one-fourth mills per cigarette. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

                                                                                                                            (3) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of ten mills per cigarette through June 30, 1994, eleven and one-fourth mills per cigarette for the period July 1, 1994, through June 30, 1995, twenty mills per cigarette for the period July 1, 1995, through June 30, 1996, and twenty and one-half mills per cigarette thereafter. All revenues collected during any month from this additional tax shall be deposited in the ((health services account created under RCW 43.72.900)) general fund by the twenty-fifth day of the following month.

                                                                                                                            (4) Wholesalers subject to the payment of this tax may, if they wish, absorb one-half mill per cigarette of the tax and not pass it on to purchasers without being in violation of this section or any other act relating to the sale or taxation of cigarettes.

                                                                                                                            (5) For purposes of this chapter, "possession" shall mean both (a) physical possession by the purchaser and, (b) when cigarettes are being transported to or held for the purchaser or his or her designee by a person other than the purchaser, constructive possession by the purchaser or his or her designee, which constructive possession shall be deemed to occur at the location of the cigarettes being so transported or held.


Sec. 16. RCW 82.24.028 and 2002 c 2 s 3 are each amended to read as follows:

In addition to the tax imposed upon the sale, use, consumption, handling, possession, or distribution of cigarettes set forth in RCW 82.24.020, there is imposed a tax in an amount equal to the rate of thirty mills per cigarette effective January 1, 2002. All revenues collected during any month from this additional tax shall be deposited in the ((health services account created under RCW 43.72.900)) general fund by the twenty-fifth day of the following month.


Sec. 17. RCW 82.26.020 and 2005 c 180 s 3 are each amended to read as follows:

(1) There is levied and there shall be collected a tax upon the sale, handling, or distribution of all tobacco products in this state at the following rate:

(a) Seventy-five percent of the taxable sales price of cigars, not to exceed fifty cents per cigar; or

(b) Seventy-five percent of the taxable sales price of all tobacco products that are not cigars.

(2) Taxes under this section shall be imposed at the time the distributor (a) brings, or causes to be brought, into this state from without the state tobacco products for sale, (b) makes, manufactures, fabricates, or stores tobacco products in this state for sale in this state, (c) ships or transports tobacco products to retailers in this state, to be sold by those retailers, or (d) handles for sale any tobacco products that are within this state but upon which tax has not been imposed.

(3) The moneys collected under this section shall be deposited as follows:

(a) ((Thirty-seven)) Eighty-seven percent in the general fund; and

(b) ((Fifty percent in the health services account created under RCW 43.72.900; and

(c) ))Thirteen percent in the water quality account under RCW 70.146.030 for the period beginning July 1, 2005, through June 30, 2021, and in the general fund for the period beginning July 1, 2021.


NEW SECTION. Sec. 18. A new section is added to chapter 43.79 RCW to read as follows:

(1) For the fiscal biennium beginning July 1, 2007, and for each fiscal biennium thereafter, the treasurer shall transfer the following amounts from revenues deposited in the general fund pursuant to RCW 82.24.028 and 82.26.028:

(a) To the violence reduction and drug enforcement account under RCW 69.50.520, six million nine hundred thirty-two thousand dollars, as required by RCW 82.24.020(2); and

(b) To the water quality account under RCW 70.146.030, seven million eight hundred eighty-five thousand dollars, as required by RCW 82.24.027(2)(a).

(2) Ten percent of the amounts deposited into the general fund under RCW 82.24.028 and 82.26.028 shall be transferred no less frequently than annually by the treasurer to the tobacco prevention and control account established by RCW 43.79.480. The amounts transferred shall be used exclusively for implementation of the Washington state tobacco prevention and control plan. For the fiscal year beginning on July 1, 2007, and for each fiscal year thereafter, the legislature shall appropriate no less than twenty-six million two hundred forty thousand dollars from the tobacco prevention and control account for implementation of the Washington state tobacco prevention and control plan.



                                                                                                                            NEW SECTION. Sec. 19. RCW 43.72.900 (Health services account) and 2003 c 259 s 1, 2002 c 371 s 909, 2002 c 2 s 2, & 1993 c 492 s 469 are each repealed."


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.

 

                                                                                                                            On page 9, beginning on line 3, strike "the health services account," and insert "((the health services account,))"


                                                                                                                            On page 12, beginning on line 14, strike "the health services account," and insert "((the health services account,))"


                                                                                                                            On page 14, line 12, strike all of section 12


                                                                                                                            Renumber remaining sections consecutively and correct title and internal references accordingly.


                                                                                                               Representative Alexander spoke in favor of the adoption of the amendment.


                                                                                                               Representative Sommers spoke against the adoption of the amendment.


{{43246}}                                                                                                               An electronic roll call vote was requested and the request was granted..


                                                                                                               The Speaker (Representative Lovick presiding) stated the question before the House to be adoption of amendment (1186) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


                                                                                                               The Clerk called the roll on the adoption of amendment (1186) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 47, Nays - 51, Excused - 0.

                                                                                                               Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 47.

                                                                                                               Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 51.


{{43247}}                                                                                                               Representative Alexander moved the adoption of amendment (1187):


Beginning on page 4, line 9, strike all of sections 7 and 8 and insert the following:


"Sec. 7. RCW 43.135.025 and 2000 2nd sp.s. c 2 s 1 are each amended to read as follows:

(1) The state shall not expend from the general fund during any fiscal year state moneys in excess of the state expenditure limit established under this chapter.

(2) Except pursuant to a declaration of emergency under RCW 43.135.035 or pursuant to an appropriation under RCW 43.135.045(4)(b), the state treasurer shall not issue or redeem any check, warrant, or voucher that will result in a state general fund expenditure for any fiscal year in excess of the state expenditure limit established under this chapter. A violation of this subsection constitutes a violation of RCW 43.88.290 and shall subject the state treasurer to the penalties provided in RCW 43.88.300.

(3) The state expenditure limit for any fiscal year shall be the previous fiscal year's state expenditure limit increased by a percentage rate that equals the fiscal growth factor.

(4) For purposes of computing the state expenditure limit for the fiscal year beginning July 1, 1995, the phrase "the previous fiscal year's state expenditure limit" means the total state expenditures from the state general fund, not including federal funds, for the fiscal year beginning July 1, 1989, plus the fiscal growth factor. This calculation is then computed for the state expenditure limit for fiscal years 1992, 1993, 1994, and 1995, and as required under RCW 43.135.035(4).

(5) A state expenditure limit committee is established for the purpose of determining and adjusting the state expenditure limit as provided in this chapter. The members of the state expenditure limit committee are the director of financial management, the attorney general or the attorney general's designee, and the chairs and ranking minority members of the senate committee on ways and means and the house of representatives committee on appropriations. All actions of the state expenditure limit committee taken pursuant to this chapter require an affirmative vote of at least ((three)) four members.

(6)(a) Prior to final passage of the omnibus operating budget by the legislature, the expenditure limit committee shall meet to adjust the expenditure limit for transfers and cost shifts under RCW 43.135.035 (4) and (5) and 43.135.060(2). If necessary, the committee shall make further adjustments after the governor signs the omnibus operating budget.

(b) Each November, the state expenditure limit committee shall adjust the expenditure limit for the preceding fiscal year based on actual expenditures and known changes in the fiscal growth factor and then project an expenditure limit for the next two fiscal years. If, by November 30th, the state expenditure limit committee has not adopted the expenditure limit adjustment and projected expenditure limit as provided in subsection (5) of this section, the attorney general or his or her designee shall adjust or project the expenditure limit, as necessary.

(7) "Fiscal growth factor" means the average of the sum of inflation and population change for each of the prior three fiscal years.

(8) "Inflation" means the percentage change in the implicit price deflator for the United States for each fiscal year as published by the federal bureau of labor statistics.

(9) "Population change" means the percentage change in state population for each fiscal year as reported by the office of financial management.



                                                                                                                            Sec. 8. RCW 43.135.025 and 2005 c 72 s 4 are each amended to read as follows:

                                                                                                                            (1) The state shall not expend from the general fund and related funds during any fiscal year state moneys in excess of the state expenditure limit established under this chapter.

                                                                                                                            (2) Except pursuant to a declaration of emergency under RCW 43.135.035 or pursuant to an appropriation under RCW 43.135.045(4)(b), the state treasurer shall not issue or redeem any check, warrant, or voucher that will result in a state general fund or related fund expenditure for any fiscal year in excess of the state expenditure limit established under this chapter. A violation of this subsection constitutes a violation of RCW 43.88.290 and shall subject the state treasurer to the penalties provided in RCW 43.88.300.

                                                                                                                            (3) The state expenditure limit for any fiscal year shall be the previous fiscal year's state expenditure limit increased by a percentage rate that equals the fiscal growth factor.

                                                                                                                            (4) For purposes of computing the state expenditure limit for the fiscal year beginning July 1, 2007, the phrase "the previous fiscal year's state expenditure limit" means the total state expenditures from the state general fund and related funds, not including federal funds, for the fiscal year beginning July 1, 2006, plus the fiscal growth factor.

                                                                                                                            (5) A state expenditure limit committee is established for the purpose of determining and adjusting the state expenditure limit as provided in this chapter. The members of the state expenditure limit committee are the director of financial management, the attorney general or the attorney general's designee, and the chairs and ranking minority members of the senate committee on ways and means and the house of representatives committee on appropriations. All actions of the state expenditure limit committee taken pursuant to this chapter require an affirmative vote of at least four members.

                                                                                                                            (6)(a) Prior to final passage of the omnibus operating budget by the legislature, the expenditure limit committee shall meet to adjust the expenditure limit for transfers and cost shifts under RCW 43.135.035 (4) and (5) and 43.135.060(2). If necessary, the committee shall make further adjustments after the governor signs the omnibus operating budget.

                                                                                                                            (b) Each November, the state expenditure limit committee shall adjust the expenditure limit for the preceding fiscal year based on actual expenditures and known changes in the fiscal growth factor and then project an expenditure limit for the next two fiscal years. If, by November 30th, the state expenditure limit committee has not adopted the expenditure limit adjustment and projected expenditure limit as provided in subsection (5) of this section, the attorney general or his or her designee shall adjust or project the expenditure limit, as necessary.

                                                                                                                            (7) "Fiscal growth factor" means the average ((growth in state personal income for the prior ten fiscal years)) of the sum of inflation and population change for each of the prior three fiscal years.

                                                                                                                            (8) "General fund" means the state general fund.

                                                                                                                            (9) "Related fund" means the health services account, violence reduction and drug enforcement account, public safety and education account, water quality account, education legacy trust account, or student achievement fund.


                                                                                                                            Sec. 9. RCW 43.135.035 and 2005 c 72 s 2 are each amended to read as follows:

                                                                                                                            (1) After July 1, 1995, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken only if approved by a two-thirds vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter. However, for legislation enacted between the effective date of this 2005 act and June 30, ((2007)) 2006, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken with the approval of a majority of members elected to each house, so long as state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter.

(2)(a) ((If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until)) Except as provided in subsection (3) of this section, total expenditures from the state general fund and related funds may exceed the expenditure limit only after the expenditures are approved by a vote of the people at a November general election. ((The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.))

(b) The ballot title for any vote of the people required under this section shall be substantially as follows:


"Shall ((taxes be imposed on . . . . . . . in order to allow a)) state spending ((increase)) be increased above last year's authorized spending adjusted for inflation and population increases?"


(3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a ((two-thirds)) three-fifths vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency((, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance)). The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.

(b) ((Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.

(c))) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.

(4) If the cost of any state program or function is shifted from the state general fund on or after January 1, 1993, to another source of funding, or if moneys are transferred from the state general fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures.

                                                                                                                            (5) If the cost of any state program or function is shifted to the state general fund on or after January 1, 2000, from another source of funding, or if moneys are transferred to the state general fund from another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift.


                                                                                                                            Sec. 10. RCW 43.135.035 and 2005 c 72 s 5 are each amended to read as follows:

                                                                                                                            (1) After July 1, 1995, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken only if approved by a two-thirds vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter.

                                                                                                                            (2)(a) ((If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until)) Except as provided in subsection (3) of this section, total expenditures from the state general fund and related funds may exceed the expenditure limit only after the expenditures are approved by a vote of the people at a November general election. ((The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.))

                                                                                                                            (b) The ballot title for any vote of the people required under this section shall be substantially as follows:


                                                                                                                            "Shall ((taxes be imposed on . . . . . . . in order to allow a)) state spending ((increase)) be increased above last year's authorized spending adjusted for ((personal income growth)) inflation and population increases?"


                                                                                                                            (3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a ((two-thirds)) three-fifths vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency((, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance)). The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.

                                                                                                                            (b) ((Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.

                                                                                                                            (c))) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.

                                                                                                                            (4) If the cost of any state program or function is shifted from the state general fund or a related fund to another source of funding, or if moneys are transferred from the state general fund or a related fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund or a related fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund or a related fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures.

(5) If the cost of any state program or function and the ongoing revenue necessary to fund the program or function are shifted to the state general fund or a related fund on or after January 1, 2007, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift.


NEW SECTION. Sec. 11. 2005 c 72 s 3 is repealed.


NEW SECTION. Sec. 12. Sections 7 and 9 of this act expire July 1, 2007.


NEW SECTION. Sec. 13. Sections 8 and 10 of this act take effect July 1, 2007.


NEW SECTION. Sec. 14. Sections 9 and 10 of this take effect if the proposed amendment to Article VIII, section . . . of the state Constitution (HJR 4219) is validly submitted to and is approved and ratified by the voters at a general election held in November 2006. If the proposed amendment is not approved and ratified, sections 9 and 10 of this act are void in their entirety."


Renumber remaining sections consecutively and correct the title and internal references accordingly.


On page 14, beginning on line 14, strike all of section 12


Renumber remaining sections consecutively and correct the title and internal references accordingly.


POINT OF ORDER


Representative Sommers requested a scope and object ruling on the amendment (1187) to Engrossed Substitute Senate Bill No. 6896.


SPEAKER'S RULING


The Speaker (Representative Lovick presiding): "ENGROSSED SUBSTITUTE SENATE BILL NO. 6896 is entitled an act relating to "funding state budgetary reserves including an adjustment to the state expenditure limit." The bill makes appropriations to the Student Achievement Fund, the Health Services Account, and the newly-created Pension Funding Stabilization Account and adjusts the expenditure limit to reflect the budgetary reserve appropriations made in the bill.

Amendment 1187 makes comprehensive changes to the state's expenditure limit law, including changes to the composition and duties of the state expenditure limit committee, changes to the definition of the fiscal growth factor, adding the Education Legacy Trust Account to the funds covered by the expenditure limit, and, subject to passage of a constitutional amendment, changes to the procedures and votes required to exceed the expenditure limit.

                                                                                                               The amendment goes far beyond making an "adjustment to the state expenditure limit: as specified in the title, and instead, proposes comprehensive changes to the state's expenditure limit law.

                                                                                                               The Speaker therefore finds the amendment is beyond the scope and object of the bill.

                                                                                                               Representative Sommers, your point of order is well taken."


                                                                                                               The Speaker assumed the chair.


{{43250}}                                                                                                               Representative Serben moved the adoption of amendment (1175):


                                                                                                                            On page 14, line 16, after "Sec. 13" strike the remainder of the section and insert "Section 10 of this act takes effect July 1, 2006."


                                                                                                                            Correct the title.


                                                                                                               Representatives Serben, Alexander, Armstrong, Ericksen and Clements spoke in favor of the adoption of the amendment.


                                                                                                               Representative Fromhold spoke against the adoption of the amendment.


{{43251}}                                                                                                               An electronic roll call vote was requested and the request was granted.


                                                                                                               The Speaker stated the question before the House to be adoption of amendment (1175) to Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


                                                                                                               The Clerk called the roll on the adoption of amendment (1175) to Engrossed Substitute Senate Bill No. 6896, and the amendment was not adopted by the following vote: Yeas - 47, Nays - 51, Excused - 0.

                                                                                                               Voting yea: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 47.

                                                                                                               Voting nay: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 51.


{{43252}}There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


Representatives Sommers and Fromhold spoke in favor of passage of the bill.


Representative Alexander, Anderson, Curtis, Orcutt, Shabro, Ahern, Ericksen, Rodne, Armstrong, Chandler, Newhouse and Bailey spoke against the passage of the bill.


The Speaker stated the question before the House to be the final passage of Engrossed Substitute Senate Bill No. 6896.


ROLL CALL


The Clerk called the roll on the final passage of Engrossed Substitute Senate Bill No. 6896 and the bill passed the House by the following vote: Yeas - 51, Nays - 47, Excused - 0.

Voting yea: Representatives Appleton, Blake, Chase, Clibborn, Cody, Conway, Darneille, Dickerson, Dunshee, Eickmeyer, Ericks, Flannigan, Fromhold, Grant, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Kagi, Kenney, Kessler, Kirby, Lantz, Linville, Lovick, McCoy, McDermott, McIntire, Miloscia, Moeller, Morris, Murray, O'Brien, Ormsby, Pettigrew, Quall, Roberts, Santos, Schual-Berke, Sells, Simpson, Sommers, Springer, Sullivan, B., Sullivan, P., Takko, Upthegrove, Williams, Wood and Mr. Speaker - 51.

Voting nay: Representatives Ahern, Alexander, Anderson, Armstrong, Bailey, Buck, Buri, Campbell, Chandler, Clements, Condotta, Cox, Crouse, Curtis, DeBolt, Dunn, Ericksen, Green, Haler, Hankins, Hinkle, Holmquist, Jarrett, Kilmer, Kretz, Kristiansen, McCune, McDonald, Morrell, Newhouse, Nixon, Orcutt, Pearson, Priest, Roach, Rodne, Schindler, Serben, Shabro, Skinner, Strow, Sump, Talcott, Tom, Wallace, Walsh and Woods - 47.


ENGROSSED SUBSTITUTE SENATE BILL NO. 6896, having received the necessary constitutional majority, was declared passed.


{{43255}}SUBSTITUTE SENATE BILL NO. 6874, By Senate Committee on Ways & Means (originally sponsored by Senators Doumit, Zarelli, Hargrove, Morton, Sheldon and Rasmussen)


Providing tax incentives for the timber and timber products industries.



                                                                                                               The bill was read the second time.


                                                                                                               There being no objection, the committee amendment by the Committee on Finance was not adopted. (For Committee amendment, see Journal, 50th Day, February 27, 2006.)


{{43254}}                                                                                                               Representative McIntire moved the adoption of amendment (1190):


                                                                                                                            Strike everything after the enacting clause and insert the following:


                                                                                                                            "Sec. 1. RCW 82.04.260 and 2005 c 513 s 2 and 2005 c 443 s 4 are each reenacted and amended to read as follows:

                                                                                                                            (1) Upon every person engaging within this state in the business of manufacturing:

                                                                                                                            (a) Wheat into flour, barley into pearl barley, soybeans into soybean oil, canola into canola oil, canola meal, or canola byproducts, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business shall be equal to the value of the flour, pearl barley, oil, canola meal, or canola byproduct manufactured, multiplied by the rate of 0.138 percent;

                                                                                                                            (b) Seafood products which remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured, multiplied by the rate of 0.138 percent;

                                                                                                                            (c) Dairy products that as of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135, including byproducts from the manufacturing of the dairy products such as whey and casein; or selling the same to purchasers who transport in the ordinary course of business the goods out of state; as to such persons the tax imposed shall be equal to the value of the products manufactured multiplied by the rate of 0.138 percent. As proof of sale to a person who transports in the ordinary course of business goods out of this state, the seller shall annually provide a statement in a form prescribed by the department and retain the statement as a business record;

                                                                                                                            (d) Until July 1, 2009, alcohol fuel, biodiesel fuel, or biodiesel feedstock, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel, biodiesel fuel, or biodiesel feedstock manufactured, multiplied by the rate of 0.138 percent; and

                                                                                                                            (e) Alcohol fuel or wood biomass fuel, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel or wood biomass fuel manufactured, multiplied by the rate of 0.138 percent.

                                                                                                                            (2) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business shall be equal to the value of the peas split or processed, multiplied by the rate of 0.138 percent.

                                                                                                                            (3) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.

                                                                                                                            (4) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of 0.138 percent.

(5) Upon every person engaging within this state in the business of acting as a travel agent or tour operator; as to such persons the amount of the tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.

(6) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.

(7) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such activities multiplied by the rate of 0.275 percent. Persons subject to taxation under this subsection shall be exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.

(8) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business shall be equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of 3.3 percent.

If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state shall be determined in accordance with the methods of apportionment required under RCW 82.04.460.

(9) Upon every person engaging within this state as an insurance agent, insurance broker, or insurance solicitor licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with respect to such licensed activities shall be equal to the gross income of such business multiplied by the rate of 0.484 percent.

 (10) Upon every person engaging within this state in business as a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation or by the state or any of its political subdivisions, as to such persons, the amount of tax with respect to such activities shall be equal to the gross income of the business multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5 percent thereafter. The moneys collected under this subsection shall be deposited in the health services account created under RCW 43.72.900.

                                                                                                                            (11)(a) Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing commercial airplanes, or components of such airplanes, as to such persons the amount of tax with respect to such business shall, in the case of manufacturers, be equal to the value of the product manufactured, or in the case of processors for hire, be equal to the gross income of the business, multiplied by the rate of:

                                                                                                                            (i) 0.4235 percent from October 1, 2005, through the later of June 30, 2007, or the day preceding the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550; and

                                                                                                                            (ii) 0.2904 percent beginning on the later of July 1, 2007, or the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550.

                                                                                                                            (b) Beginning October 1, 2005, upon every person engaging within this state in the business of making sales, at retail or wholesale, of commercial airplanes, or components of such airplanes, manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the airplanes or components multiplied by the rate of:

                                                                                                                            (i) 0.4235 percent from October 1, 2005, through the later of June 30, 2007, or the day preceding the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550; and

                                                                                                                            (ii) 0.2904 percent beginning on the later of July 1, 2007, or the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550.

                                                                                                                            (c) For the purposes of this subsection (11), "commercial airplane," "component," and "final assembly of a superefficient airplane" have the meanings given in RCW 82.32.550.

                                                                                                                            (d) In addition to all other requirements under this title, a person eligible for the tax rate under this subsection (11) must report as required under RCW 82.32.545.

                                                                                                                            (e) This subsection (11) does not apply after the earlier of: July 1, 2024; or December 31, 2007, if assembly of a superefficient airplane does not begin by December 31, 2007, as determined under RCW 82.32.550.

(12)(a) Until July 1, 2024, upon every person engaging within this state in the business of extracting timber or extracting for hire timber; as to such persons the amount of tax with respect to the business shall, in the case of extractors, be equal to the value of products, including byproducts, extracted, or in the case of extractors for hire, be equal to the gross income of the business, multiplied by the rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30, 2024.

                                                                                                                            (b) Until July 1, 2024, upon every person engaging within this state in the business of manufacturing or processing for hire: (i) Timber into timber products or wood products; or (ii) timber products into other timber products or wood products; as to such persons the amount of the tax with respect to the business shall, in the case of manufacturers, be equal to the value of products, including byproducts, manufactured, or in the case of processors for hire, be equal to the gross income of the business, multiplied by the rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30, 2024.

                                                                                                                            (c) Until July 1, 2024, upon every person engaging within this state in the business of selling at wholesale: (i) Timber extracted by that person; (ii) timber products manufactured by that person from timber or other timber products; or (iii) wood products manufactured by that person from timber or timber products; as to such persons the amount of the tax with respect to the business shall be equal to the gross proceeds of sales of the timber, timber products, or wood products multiplied by the rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30, 2024.

(d) For purposes of this subsection, the following definitions apply:

 (i) "Timber products" means logs, wood chips, sawdust, wood waste, and similar products obtained wholly from the processing of timber; pulp; and recycled paper products.

(ii) "Wood products" means paper and paper products; dimensional lumber; engineered wood products such as particleboard, oriented strand board, medium density fiberboard, and plywood; wood doors; and wood windows.


NEW SECTION. Sec. 2. A new section is added to chapter 82.04 RCW to be codified between RCW 82.04.260 and 82.04.263 to read as follows:

(1) In addition to the taxes imposed under RCW 82.04.260(12), a surcharge is imposed on those persons who are subject to any of the taxes imposed under RCW 82.04.260(12). Except as otherwise provided in this section, the surcharge is equal to 0.052 percent added to the rates provided in RCW 82.04.260(12) (a), (b), and (c).

(2) All receipts from the surcharge imposed under this section shall be deposited into the forest and fish support account created in section 3 of this act.

(3)(a) The surcharge imposed under this section shall be suspended if:

(i) Receipts from the surcharge total at least eight million dollars during any fiscal biennium; or

(ii) The office of financial management certifies to the department that the federal government has appropriated at least two million dollars for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington for any federal fiscal year.

(b)(i) The suspension of the surcharge under (a)(i) of this subsection (3) shall take effect on the first day of the calendar month that is at least thirty days after the end of the month during which the department determines that receipts from the surcharge total at least eight million dollars during the fiscal biennium. The surcharge shall be imposed again at the beginning of the following fiscal biennium.

(ii) The suspension of the surcharge under (a)(ii) of this subsection (3) shall take effect on the later of the first day of October of any federal fiscal year for which the federal government appropriates at least two million dollars for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington, or the first day of a calendar month that is at least thirty days following the date that the office of financial management makes a certification to the department under subsection (5) of this section. The surcharge shall be imposed again on the first day of the following July.

(4)(a) If, by October 1st of any federal fiscal year, the office of financial management certifies to the department that the federal government has appropriated funds for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington but the amount of the appropriation is less than two million dollars, the department shall adjust the surcharge in accordance with this subsection.

                                                                                                                            (b) The department shall adjust the surcharge by an amount that the department estimates will cause the amount of funds deposited into the forest and fish support account for the state fiscal year that begins July 1st and that includes the beginning of the federal fiscal year for which the federal appropriation is made, to be reduced by twice the amount of the federal appropriation for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington.

                                                                                                                            (c) Any adjustment in the surcharge shall take effect at the beginning of a calendar month that is at least thirty days after the date that the office of financial management makes the certification under subsection (5) of this section.

                                                                                                                            (d) The surcharge shall be imposed again at the rate provided in subsection (1) of this section on the first day of the following state fiscal year unless the surcharge is suspended under subsection (3) of this section or adjusted for that fiscal year under this subsection.

                                                                                                                            (e) Adjustments of the amount of the surcharge by the department are final and shall not be used to challenge the validity of the surcharge imposed under this section.

                                                                                                                            (f) The department shall provide timely notice to affected taxpayers of the suspension of the surcharge or an adjustment of the surcharge.

                                                                                                                             (5) The office of financial management shall make the certification to the department as to the status of federal appropriations for tribal participation in forest and fish report-related activities.


                                                                                                                            NEW SECTION. Sec. 3. A new section is added to chapter 76.09 RCW to read as follows:

                                                                                                                            The forest and fish support account is hereby created in the state treasury. Receipts from appropriations, the surcharge imposed under RCW 82.04.260(12), and other sources must be deposited into the account. Expenditures from the account shall be used for activities pursuant to the state's implementation of the forests and fish report as defined in chapter 76.09 RCW and related activities, including, but not limited to, adaptive management, monitoring, and participation grants to tribes, state and local agencies, and not-for-profit public interest organizations. Expenditures from the account may be made only after appropriation by the legislature.


                                                                                                                            Sec. 4. RCW 34.05.030 and 2002 c 354 s 225 are each amended to read as follows:

                                                                                                                            (1) This chapter shall not apply to:

                                                                                                                            (a) The state militia, or

                                                                                                                            (b) The board of clemency and pardons, or

                                                                                                                            (c) The department of corrections or the indeterminate sentencing review board with respect to persons who are in their custody or are subject to the jurisdiction of those agencies.

                                                                                                                            (2) The provisions of RCW 34.05.410 through 34.05.598 shall not apply:

                                                                                                                            (a) To adjudicative proceedings of the board of industrial insurance appeals except as provided in RCW 7.68.110 and 51.48.131;

                                                                                                                            (b) Except for actions pursuant to chapter 46.29 RCW, to the denial, suspension, or revocation of a driver's license by the department of licensing;

                                                                                                                            (c) To the department of labor and industries where another statute expressly provides for review of adjudicative proceedings of a department action, order, decision, or award before the board of industrial insurance appeals;

(d) To actions of the Washington personnel resources board or the director of personnel; ((or))

 (e) To adjustments by the department of revenue of the amount of the surcharge imposed under section 2 of this act; or

(f) To the extent they are inconsistent with any provisions of chapter 43.43 RCW.

(3) Unless a party makes an election for a formal hearing pursuant to RCW 82.03.140 or 82.03.190, RCW 34.05.410 through 34.05.598 do not apply to a review hearing conducted by the board of tax appeals.

(4) The rule-making provisions of this chapter do not apply to:

(a) Reimbursement unit values, fee schedules, arithmetic conversion factors, and similar arithmetic factors used to determine payment rates that apply to goods and services purchased under contract for clients eligible under chapter 74.09 RCW; and

(b) Adjustments by the department of revenue of the amount of the surcharge imposed under section 2 of this act.

(5) All other agencies, whether or not formerly specifically excluded from the provisions of all or any part of the Administrative Procedure Act, shall be subject to the entire act.


Sec. 5. RCW 82.04.230 and 1993 sp.s. c 25 s 101 are each amended to read as follows:

Upon every person engaging within this state in business as an extractor, except persons taxable as an extractor under any other provision in this chapter; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, extracted for sale or for commercial or industrial use, multiplied by the rate of 0.484 percent.

The measure of the tax is the value of the products, including byproducts, so extracted, regardless of the place of sale or the fact that deliveries may be made to points outside the state.


Sec. 6. RCW 82.04.280 and 2004 c 24 s 6 are each amended to read as follows:

Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals, or magazines; (2) building, repairing or improving any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (3) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (4) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (5) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of RCW 48.05.310; (6) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the Federal Communications Commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (7) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of 0.484 percent.

                                                                                                                            As used in this section, "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.

                                                                                                                            As used in this section, "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.

                                                                                                                            As used in this section, "periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.


                                                                                                                            Sec. 7. RCW 82.04.280 and 2003 c 149 s 4 are each amended to read as follows:

                                                                                                                            Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals, or magazines; (2) building, repairing or improving any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (3) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (4) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (5) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of RCW 48.05.310; (6) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the Federal Communications Commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (7) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of 0.484 percent.

As used in this section, "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.

As used in this section, "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.

As used in this section, "periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.


Sec. 8. RCW 82.04.440 and 2005 c 301 s 3 are each amended to read as follows:

(1) Every person engaged in activities which are within the purview of the provisions of two or more of sections RCW 82.04.230 to 82.04.298, inclusive, shall be taxable under each paragraph applicable to the activities engaged in.

(2) Persons taxable under RCW 82.04.2909(2), 82.04.250, 82.04.270, 82.04.294(2), or 82.04.260 (4) ((or (13))), (11), or (12) with respect to selling products in this state, including those persons who are also taxable under section 2 of this act, shall be allowed a credit against those taxes for any (a) manufacturing taxes paid with respect to the manufacturing of products so sold in this state, and/or (b) extracting taxes paid with respect to the extracting of products so sold in this state or ingredients of products so sold in this state. Extracting taxes taken as credit under subsection (3) of this section may also be taken under this subsection, if otherwise allowable under this subsection. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the sale of those products.

(3) Persons taxable as manufacturers under RCW 82.04.240 or 82.04.260 (1)(b) or (12), including those persons who are also taxable under section 2 of this act, shall be allowed a credit against those taxes for any extracting taxes paid with respect to extracting the ingredients of the products so manufactured in this state. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the manufacturing of those products.

(4) Persons taxable under RCW 82.04.230, 82.04.240, 82.04.2909(1), 82.04.294(1), or 82.04.260 (1), (2), (4), (((6), or (13))) (11), or (12), including those persons who are also taxable under section 2 of this act, with respect to extracting or manufacturing products in this state shall be allowed a credit against those taxes for any (i) gross receipts taxes paid to another state with respect to the sales of the products so extracted or manufactured in this state, (ii) manufacturing taxes paid with respect to the manufacturing of products using ingredients so extracted in this state, or (iii) manufacturing taxes paid with respect to manufacturing activities completed in another state for products so manufactured in this state. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the extraction or manufacturing of those products.

                                                                                                                            (5) For the purpose of this section:

                                                                                                                            (a) "Gross receipts tax" means a tax:

                                                                                                                            (i) Which is imposed on or measured by the gross volume of business, in terms of gross receipts or in other terms, and in the determination of which the deductions allowed would not constitute the tax an income tax or value added tax; and

                                                                                                                            (ii) Which is also not, pursuant to law or custom, separately stated from the sales price.

                                                                                                                            (b) "State" means (i) the state of Washington, (ii) a state of the United States other than Washington, or any political subdivision of such other state, (iii) the District of Columbia, and (iv) any foreign country or political subdivision thereof.

                                                                                                                            (c) "Manufacturing tax" means a gross receipts tax imposed on the act or privilege of engaging in business as a manufacturer, and includes (i) the taxes imposed in RCW 82.04.240, 82.04.2909(1), 82.04.260 (1), (2), (4), ((and (13))) (11), and (12), and 82.04.294(1); ((and)) (ii) the tax imposed under section 2 of this act on persons who are engaged in business as a manufacturer; and (iii) similar gross receipts taxes paid to other states.

                                                                                                                            (d) "Extracting tax" means a gross receipts tax imposed on the act or privilege of engaging in business as an extractor, and includes (i) the tax imposed on extractors in RCW 82.04.230 and 82.04.260(12); (ii) the tax imposed under section 2 of this act on persons who are engaged in business as an extractor; and (iii) similar gross receipts taxes paid to other states.

                                                                                                                            (e) "Business", "manufacturer", "extractor", and other terms used in this section have the meanings given in RCW 82.04.020 through 82.04.212, notwithstanding the use of those terms in the context of describing taxes imposed by other states.


                                                                                                                            NEW SECTION. Sec. 9. A new section is added to chapter 82.32 RCW to read as follows:

                                                                                                                            (1) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information on how a tax incentive is used.

                                                                                                                            (2)(a) A person who reports taxes under RCW 82.04.260(12) shall file a complete annual survey with the department. The survey is due by March 31st following any year in which a person reports taxes under RCW 82.04.260(12). The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590. The survey shall include the amount of tax reduced under the preferential rate in RCW 82.04.260(12). The survey shall also include the following information for employment positions in Washington:

                                                                                                                            (i) The number of total employment positions;

                                                                                                                            (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;

                                                                                                                             (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and

                                                                                                                            (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.

                                                                                                                            (b) The first survey filed under this subsection shall include employment, wage, and benefit information for the twelve-month period immediately before first use of a preferential tax rate under RCW 82.04.260(12).

(c) As part of the annual survey, the department may request additional information, including the amount of investment in equipment used in the activities taxable under the preferential rate in RCW 82.04.260(12), necessary to measure the results of, or determine eligibility for, the preferential tax rate in RCW 82.04.260(12).

(d) All information collected under this section, except the amount of the tax reduced under the preferential rate in RCW 82.04.260(12), is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax reduced is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request, except as provided in (e) of this subsection. If the amount of the tax reduced as reported on the survey is different than the amount actually reduced based on the taxpayer's excise tax returns or otherwise allowed by the department, the amount actually reduced may be disclosed.

(e) Persons for whom the actual amount of the tax reduction is less than ten thousand dollars during the period covered by the survey may request the department to treat the amount of the tax reduction as confidential under RCW 82.32.330.

(3) If a person fails to submit a complete annual survey under subsection (2) of this section by the due date or any extension under RCW 82.32.590, the department shall declare the amount of taxes reduced under the preferential rate in RCW 82.04.260(12) for the period covered by the survey to be immediately due and payable. The department shall assess interest, but not penalties, on the taxes. Interest shall be assessed at the rate provided for delinquent excise taxes under this chapter, retroactively to the date the reduced taxes were due, and shall accrue until the amount of the reduced taxes is repaid.

 (4) The department shall use the information from the annual survey required under subsection (2) of this section to prepare summary descriptive statistics by category. The department shall report these statistics to the legislature each year by September 1st. The requirement to prepare and report summary descriptive statistics shall cease after September 1, 2025.

(5) By November 1, 2011, and November 1, 2023, the fiscal committees of the house of representatives and the senate, in consultation with the department, shall report to the legislature on the effectiveness of the preferential tax rate provided in RCW 82.04.260(12). The report shall measure the effect of the preferential tax rate provided in RCW 82.04.260(12) on job retention, net jobs created for Washington residents, company growth, and other factors as the committees select. The report shall include a discussion of principles to apply in evaluating whether the legislature should continue the preferential tax rate provided in RCW 82.04.260(12).


Sec. 10. RCW 82.32.590 and 2005 c 514 s 1001 are each amended to read as follows:

(1) If the department finds that the failure of a taxpayer to file an annual survey under RCW 82.04.4452 or section 9 of this act by the due date was the result of circumstances beyond the control of the taxpayer, the department shall extend the time for filing the survey. Such extension shall be for a period of thirty days from the date the department issues its written notification to the taxpayer that it qualifies for an extension under this section. The department may grant additional extensions as it deems proper.

(2) In making a determination whether the failure of a taxpayer to file an annual survey by the due date was the result of circumstances beyond the control of the taxpayer, the department shall be guided by rules adopted by the department for the waiver or cancellation of penalties when the underpayment or untimely payment of any tax was due to circumstances beyond the control of the taxpayer.


                                                                                                                            Sec. 11. RCW 82.32.600 and 2005 c 514 s 1002 are each amended to read as follows:

                                                                                                                            (1) Persons required to file surveys under RCW 82.04.4452 or section 9 of this act must electronically file with the department all surveys, returns, and any other forms or information the department requires in an electronic format as provided or approved by the department((, unless the department grants relief under subsection (2) of this section)). As used in this section, "returns" has the same meaning as "return" in RCW 82.32.050.

                                                                                                                            (2) ((Upon request, the department may relieve a person of the obligations in subsection (1) of this section if the person's taxes have been reduced a cumulative total of less than one thousand dollars from all of the credits, exemptions, or preferential business and occupation tax rates, for which a person is required to file an annual survey under RCW 82.04.4452, 82.32.535, 82.32.545, 82.32.570, 82.32.560, 82.60.070, or 82.63.020.

                                                                                                                            (3) Persons who no longer qualify for relief under subsection (2) of this section will be notified in writing by the department and must comply with subsection (1) of this section by the date provided in the notice.

                                                                                                                            (4))) Any survey, return, or any other form or information required to be filed in an electronic format under subsection (1) of this section is not filed until received by the department in an electronic format.


                                                                                                                            Sec. 12. 2003 c 149 s 12 (uncodified) is amended to read as follows:

                                                                                                                            (1)(a) This act ((is)) and section 7, chapter . . ., Laws of 2006 (section 7 of this act) are contingent upon the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington.

                                                                                                                            (b) For the purposes of this section:

                                                                                                                            (i) "Commercial operation" means the same as "commencement of commercial production" as used in RCW 82.08.965.

                                                                                                                            (ii) "Semiconductor microchip fabrication" means "manufacturing semiconductor microchips" as defined in RCW 82.04.426.

                                                                                                                            (iii) "Significant" means the combined investment of new buildings and new machinery and equipment in the buildings, at the commencement of commercial production, will be at least one billion dollars.

                                                                                                                            (2) This act takes effect the first day of the month in which a contract for the construction of a significant semiconductor fabrication facility is signed, as determined by the director of the department of revenue.

                                                                                                                            (3)(a) The department of revenue shall provide notice of the effective date of this act to affected taxpayers, the legislature, and others as deemed appropriate by the department.

                                                                                                                            (b) If, after making a determination that a contract has been signed and this act is effective, the department discovers that commencement of commercial production did not take place within three years of the date the contract was signed, the department shall make a determination that this act is no longer effective, and all taxes that would have been otherwise due shall be deemed deferred taxes and are immediately assessed and payable from any person reporting tax under RCW 82.04.240(2) or claiming an exemption or credit under section 2 or 5 through 10 of this act. The department is not authorized to make a second determination regarding the effective date of this act.


NEW SECTION. Sec. 13. (1) Sections 1, 3, 4 through 6, and 8 through 12 of this act take effect July 1, 2006.

(2) Section 2 of this act takes effect July 1, 2007.

(3) Section 7 of this act takes effect if the contingency in section 12 of this act occurs.


NEW SECTION. Sec. 14. Section 6 of this act expires on the date that section 7 of this act takes effect."


Correct the title.


Representatives McIntire, Orcutt and Takko spoke in favor of the adoption of the amendment.


The amendment was adopted.


{{43256}}There being no objection, the rules were suspended, the second reading considered the third and the bill, as amended by the House, was placed on final passage.


Representatives McIntire, Orcutt, Kessler, Buck and Kretz spoke in favor of passage of the bill.


The Speaker stated the question before the House to be the final passage of Substitute Senate Bill No. 6874, as amended by the House.


ROLL CALL


The Clerk called the roll on the final passage of Substitute Senate Bill No. 6874, as amended by the House, and the bill passed the House by the following vote: Yeas - 93, Nays - 5, Excused - 0.

Voting yea: Representatives Ahern, Alexander, Anderson, Appleton, Armstrong, Bailey, Blake, Buck, Buri, Campbell, Chandler, Chase, Clements, Clibborn, Cody, Condotta, Conway, Cox, Crouse, Curtis, DeBolt, Dunn, Dunshee, Eickmeyer, Ericks, Ericksen, Flannigan, Fromhold, Grant, Green, Haigh, Haler, Hankins, Hinkle, Holmquist, Hunt, Hunter, Jarrett, Kagi, Kenney, Kessler, Kilmer, Kirby, Kretz, Kristiansen, Lantz, Linville, Lovick, McCoy, McCune, McDermott, McDonald, McIntire, Miloscia, Moeller, Morrell, Morris, Murray, Newhouse, Nixon, O'Brien, Orcutt, Ormsby, Pearson, Pettigrew, Priest, Quall, Roach, Roberts, Rodne, Santos, Schindler, Schual-Berke, Sells, Serben, Shabro, Simpson, Skinner, Springer, Strow, Sullivan, B., Sullivan, P., Sump, Takko, Talcott, Tom, Upthegrove, Wallace, Walsh, Williams, Wood, Woods and Mr. Speaker - 93.

Voting nay: Representatives Darneille, Dickerson, Hasegawa, Hudgins and Sommers - 5.


SUBSTITUTE SENATE BILL NO. 6874, as amended by the House, having received the necessary constitutional majority, was declared passed.



SIGNED BY THE SPEAKER


                                                                                                               The Speaker signed the following bills:

SUBSTITUTE HOUSE BILL NO. 1841,

SUBSTITUTE HOUSE BILL NO. 2155,

HOUSE BILL NO. 2466,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2475,

SECOND SUBSTITUTE HOUSE BILL NO. 2754,

ENGROSSED SENATE BILL NO. 5179,

SUBSTITUTE SENATE BILL NO. 5236,

SUBSTITUTE SENATE BILL NO. 5654,

SECOND ENGROSSED SENATE BILL NO. 5714,

SENATE BILL NO. 6059,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6106,

SUBSTITUTE SENATE BILL NO. 6141,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6151,

SECOND SUBSTITUTE SENATE BILL NO. 6172,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 6175,

SUBSTITUTE SENATE BILL NO. 6188,

SECOND SUBSTITUTE SENATE BILL NO. 6193,

SUBSTITUTE SENATE BILL NO. 6196,

SECOND SUBSTITUTE SENATE BILL NO. 6197,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6230,

SUBSTITUTE SENATE BILL NO. 6234,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 6239,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6244,

SUBSTITUTE SENATE BILL NO. 6246,

SUBSTITUTE SENATE BILL NO. 6247,

SENATE BILL NO. 6248,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6255,

SENATE BILL NO. 6264,

SENATE BILL NO. 6280,

SUBSTITUTE SENATE BILL NO. 6287,

SUBSTITUTE SENATE BILL NO. 6308,

SECOND SUBSTITUTE SENATE BILL NO. 6319,

SUBSTITUTE SENATE BILL NO. 6320,

SUBSTITUTE SENATE BILL NO. 6369,

SENATE BILL NO. 6373,

SUBSTITUTE SENATE BILL NO. 6377,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6396,

SENATE BILL NO. 6412,

SENATE BILL NO. 6418,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6427,

SENATE BILL NO. 6429,

SENATE BILL NO. 6453,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 6459,

SECOND SUBSTITUTE SENATE BILL NO. 6460,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6508,

SUBSTITUTE SENATE BILL NO. 6527,

SUBSTITUTE SENATE BILL NO. 6555,

SENATE BILL NO. 6568,

SUBSTITUTE SENATE BILL NO. 6613,

SUBSTITUTE SENATE BILL NO. 6617,

SENATE BILL NO. 6637,

ENGROSSED SENATE BILL NO. 6661,

SUBSTITUTE SENATE BILL NO. 6717,

SUBSTITUTE SENATE BILL NO. 6781,

SECOND SUBSTITUTE SENATE BILL NO. 6823,

SUBSTITUTE SENATE BILL NO. 6840,


{{43257}}                                                                                                               There being no objection, the House advanced to the eleventh order of business.


                                                                                                               There being no objection, the House adjourned until 10:00 a.m., March 8, 2006, the 59th Day of the Regular Session.


FRANK CHOPP, Speaker

RICHARD NAFZIGER, Chief Clerk