MORNING SESSION

Senate Chamber, Olympia, Tuesday, February 9, 2010

The Senate was called to order at 9:00 a.m. by President Owen. The Secretary called the roll and announced to the President that all Senators were present with the exception of Senator McCaslin.

The Sergeant at Arms Color Guard consisting of Pages Julia Brown and Jack Makin, presented the Colors. Pastor Brad Carlson of Yelm Prairie Christian Center offered the prayer.

MOTION

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

MOTION

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

REPORTS OF STANDING COMMITTEES

February 8, 2010

SB 6843 Prime Sponsor, Senator Prentice: Preserving essential public services by temporarily suspending the two-thirds vote requirement for tax increases and permanently modifying provisions of Initiative Measure No. 960 for improved efficiency and consistency with state budgeting. Reported by Committee on Ways & Means

MAJORITY recommendation: Do pass. Signed by Senators Prentice, Chair; Fraser, Vice Chair, Capital Budget Chair; Tom, Vice Chair, Operating Budget; Fairley; Keiser; Kline; Kohl-Welles; McDermott; Murray; Oemig; Pridemore; Regala and Rockefeller.

MINORITY recommendation: Do not pass. Signed by Senators Zarelli; Brandland; Carrell; Honeyford; Parlette and Schoesler.

Passed to Committee on Rules for second reading.

MOTION

On motion of Senator Eide, the measure listed on the Standing Committee report was referred to the committee as designated.

MOTION

On motion of Senator Eide, the Senate advanced to the third order of business.

MESSAGE FROM THE GOVERNOR

GUBERNATORIAL APPOINTMENTS

February 4, 2010

TO THE HONORABLE, THE SENATE OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

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

PATRICIA T. LANTZ, appointed January 15, 2010, for the term ending December 31, 2014, as Member of the Parks and Recreation Commission.

Sincerely,

CHRISTINE O. GREGOIRE, Governor

Referred to Committee on Natural Resources, Ocean & Recreation.

February 5, 2010

TO THE HONORABLE, THE SENATE OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

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

IRA SENGUPTA, reappointed December 9, 2009, for the term ending September 30, 2014, as Member, Board of Trustees, Renton Technical College District No. 27.

Sincerely,

CHRISTINE O. GREGOIRE, Governor

Referred to Committee on Higher Education & Workforce Development.

MOTION

On motion of Senator Eide, all appointees listed on the Gubernatorial Appointments report were referred to the committees as designated.

MOTION

On motion of Senator Eide, the Senate advanced to the fifth order of business.

INTRODUCTION AND FIRST READING

SB 6851 by Senators Murray, Brown, Tom, Pridemore, Rockefeller, Kline, Oemig, Kauffman, McDermott, Gordon, Jacobsen, Keiser, Franklin, Fairley, McAuliffe, Eide, Fraser, Berkey, Shin, Kastama, Hargrove, Kohl-Welles, Regala and Prentice

AN ACT Relating to the clean water act of 2010 funding cleanup of water pollution and other programs necessary for the health and well- being of Washington citizens through an increase in the tax on hazardous substances; amending RCW 82.21.030; adding new sections to chapter 90.48 RCW; adding a new section to chapter 46.68 RCW; adding a new section to chapter 90.71 RCW; creating new sections; providing an effective date; and declaring an emergency.

Referred to Committee on Ways & Means.

SB 6852 by Senator Roach

AN ACT Relating to child protective services workers; and adding a new section to chapter 26.44 RCW.

Referred to Committee on Human Services & Corrections.

SB 6853 by Senators Rockefeller, Kastama, Tom, Regala, Gordon, Ranker, Prentice, Oemig, Keiser and Kline

AN ACT Relating to creating the legislative review of tax preferences act of 2010.

Referred to Committee on Ways & Means.

SB 6854 by Senators Honeyford, Hewitt, King and Parlette

AN ACT Relating to modifying the sales and use tax exemptions for machinery and equipment; amending RCW 82.08.02565 and 82.12.02565; adding new sections to chapter 82.08 RCW; adding new sections to chapter 82.12 RCW; adding a new section to chapter 82.16 RCW; adding a new section to chapter 82.63 RCW; creating new sections; and providing expiration dates.

Referred to Committee on Ways & Means.

INTRODUCTION AND FIRST READING OF HOUSE BILLS

EHB 1139 by Representative Liias

AN ACT Relating to increasing the membership of public transportation benefit area authorities; and amending RCW 36.57A.050.

Referred to Committee on Transportation.

HB 1541 by Representatives Seaquist, Conway, Crouse and Simpson

AN ACT Relating to granting half-time service credit for half-time educational employment prior to January 1, 1987, in plans 2 and 3 of the school employees' retirement system and the public employees' retirement system; adding a new section to chapter 41.35 RCW; and adding a new section to chapter 41.40 RCW.

Referred to Committee on Ways & Means.

HB 1690 by Representatives Hasegawa, Hunt, Hudgins, Anderson and Kenney

AN ACT Relating to authorizing alternative public works contracting procedures; amending RCW 28B.20.140, 39.10.200, 39.10.230, 39.10.210, and 43.131.408; and creating a new section.

Referred to Committee on Government Operations & Elections.

HB 1785 by Representatives Armstrong, O'Brien, Condotta and Kelley

AN ACT Relating to the Washington state patrol chief for a day program; adding a new section to chapter 43.43 RCW; and creating a new section.

Referred to Committee on Transportation.

EHB 2360 by Representative Darneille

AN ACT Relating to consolidation of administrative services for AIDS grants in the department of health; amending RCW 70.24.400; and providing an effective date.

Referred to Committee on Ways & Means.

HB 2398 by Representatives Hunt and Armstrong

AN ACT Relating to election notices; amending RCW 29A.08.140 and 29A.32.260; adding a new section to chapter 29A.52 RCW; and repealing RCW 29A.52.311 and 29A.52.351.

Referred to Committee on Government Operations & Elections.

HB 2456 by Representatives Schmick, Springer, Short and Fagan

AN ACT Relating to population thresholds that determine the number of local councilmembers and receipt of local funds; amending RCW 35A.12.010 and 47.26.345; and creating a new section.

Referred to Committee on Government Operations & Elections.

ESHB 2464 by House Committee on Transportation (originally sponsored by Representatives Liias, Johnson, O'Brien, Morrell, Maxwell, Sullivan, Simpson, Van De Wege, Kenney, Ericks and Sells)

AN ACT Relating to approaching certain emergency, roadside assistance, or police vehicles in emergency zones; amending RCW 46.61.212, 46.63.020, 46.20.342, and 46.63.110; creating a new section; prescribing penalties; providing an effective date; and providing an expiration date.

Referred to Committee on Transportation.

HB 2490 by Representative Angel

AN ACT Relating to persons with intellectual disabilities; amending RCW 44.04.280, 10.95.030, 10.95.070, 10.95.130, 26.26.220, 28B.20.410, 28B.20.414, 39.32.010, 41.05.095, 43.20B.080, 43.190.020, 48.01.035, 70.10.010, 70.10.030, 70.41.020, 70.83.020, 70.83.040, 71.34.020, 71A.10.020, 74.09.035, 74.09.120, 74.09.510, 74.09.700, 74.29.010, 74.42.010, 74.42.490, 74.46.020, 82.65A.020, 82.65A.030, and 72.29.010; amending 1965 c 11 s 1 (uncodified); reenacting and amending RCW 13.34.030; and creating a new section.

Referred to Committee on Government Operations & Elections.

HB 2510 by Representatives Kelley, Rodne, Hurst, Bailey, Kirby, Simpson and Morrell

AN ACT Relating to authorizing public hospital districts to execute commonly accepted security instruments, as required to participate in federal programs that reduce the costs of financing the construction, rehabilitation, replacing, and equipping of hospitals or other health care facilities; and amending RCW 70.44.060.

Referred to Committee on Financial Institutions, Housing & Insurance.

HB 3056 by Representatives Pearson, Hurst, Kessler, Klippert, Kirby, Kenney and Kelley

AN ACT Relating to pretrial release or detention; adding a new chapter to Title 10 RCW; and providing a contingent effective date.

Referred to Committee on Judiciary.

ESHJR 4220 by House Committee on Public Safety & Emergency Preparedness (originally sponsored by Representatives Hope, Kelley, Green, Conway, Parker, Hurst, Campbell, Wallace, Orcutt, Simpson, Ericks, Ericksen, Van De Wege, Morrell, Takko, Appleton, Maxwell, Orwall, Pearson, Kirby, Sells, Kenney, Johnson, Dammeier, Roberts and McCune)

Amending the state Constitution so that the provision relating to bailable crimes by sufficient sureties is modified.

Referred to Committee on Judiciary.

MOTION

On motion of Senator Eide, all measures listed on the Introduction and First Reading report were referred to the committees as designated.

MOTION

At 9:08 a.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

The Senate was called to order at 10:40 a.m. by President Owen.

MOTION

On motion of Senator Eide, the Senate advanced to the sixth order of business.

SECOND READING

CONFIRMATION OF GUBERNATORIAL APPOINTMENTS

MOTION

Senator Pridemore moved that Gubernatorial Appointment No. 9020, Yang-Su Cho, as a member of the Board of Trustees, State School for the Blind, be confirmed.

Senator Pridemore spoke in favor of the motion.

MOTION

On motion of Senator Brandland, Senator McCaslin was excused.

MOTION

On motion of Senator Marr, Senator Brown was excused.

APPOINTMENT OF YANG-SU CHO

The President declared the question before the Senate to be the confirmation of Gubernatorial Appointment No. 9020, Yang-Su Cho as a member of the Board of Trustees, State School for the Blind.

The Secretary called the roll on the confirmation of Gubernatorial Appointment No. 9020, Yang-Su Cho as a member of the Board of Trustees, State School for the Blind and the appointment was confirmed by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

Voting yea: Senators Becker, Benton, Berkey, Brandland, Brown, Carrell, Delvin, Eide, Fairley, Franklin, Fraser, Gordon, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, King, Kline, Kohl-Welles, Marr, McAuliffe, McDermott, Morton, Murray, Oemig, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

Excused: Senator McCaslin

Gubernatorial Appointment No. 9020, Yang-Su Cho, having received the constitutional majority was declared confirmed as a member of the Board of Trustees, State School for the Blind.

MOTION

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

THIRD READING

SUBSTITUTE SENATE BILL NO. 5704, by Senate Committee on Government Operations & Elections (originally sponsored by Senators Swecker, Becker, Stevens and Roach).

Concerning creation of a flood district by three or more counties.

The bill was read on Third Reading.

MOTION

On motion of Senator Swecker, the rules were suspended and Substitute Senate Bill No. 5704 was returned to second reading for the purpose of amendment.

SECOND READING

SUBSTITUTE SENATE BILL NO. 5704, by Senate Committee on Government Operations & Elections (originally sponsored by Senators Swecker, Becker, Stevens and Roach)

Concerning creation of a flood district by three or more counties.

The measure was read the second time.

MOTION

Senator Swecker moved that the following striking amendment by Senator Swecker be adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 85.38.090 and 1991 c 349 s 12 are each amended to read as follows:

(1) Whenever the governing body of a special district has more than three members, the governing body shall be reduced to three members as of January 1, 1986, by eliminating the positions of those district governing body members with the shortest remaining terms of office. The remaining three governing body members shall have staggered terms with the one having the shortest remaining term having his or her position filled at the 1987 special district general election, the one with the next shortest remaining term having his or her position filled at the 1989 special district general election, and the one with the longest remaining term having his or her position filled at the 1992 special district general election. If any of these remaining three governing body members have identical remaining terms of office, the newly calculated remaining terms of these persons shall be determined by lot with the county auditor who assists the special district in its elections managing such lot procedure. The newly established terms shall be recorded by the county auditor.

(2) However, whenever five or more special districts have consolidated under chapter 85.36 RCW and the consolidated district has five members in its governing body on July 28, 1985, the consolidated district may adopt a resolution retaining a five-member governing body. At any time thereafter, such a district may adopt a resolution and reduce the size of the governing body to three members with the reduction occurring as provided in subsection (1) of this section, but the years of the effective dates shall be extended so that the reduction occurs at the next January 1st occurring after the date of the adoption of the resolution. Whenever a special district is so governed by a five-member governing body, two members shall be elected at each of two consecutive special district general elections, and one member shall be elected at the following special district general election, each to serve a six-year staggered term.

(3) Subsections (1) and (2) of this section do not apply to flood districts that contain three or more counties.

NEW SECTION. Sec. 2. A new section is added to chapter 85.38 RCW to read as follows:

The following applies to flood districts that contain three or more counties:

(1) The governing body shall include one member from each county and two additional governing members. No more than two governing members may be from one county.

(2) The initial members of the governing body must be chosen by each county legislative authority, with each county choosing one member, and the counties with the two largest populations within the special flood district choosing one member each. These initial governing body members shall serve until their successors are elected and qualified at the next special district general election.

(3) At this first election, the members receiving the two greatest number of votes shall serve six-year terms, the members receiving the third and fourth greatest number of votes shall serve four-year terms, and the remaining members shall serve two-year terms of office.

(4) The requirements for the filing period and method for filing declarations of candidacy for the governing body of the district and the arrangement of candidate names on the ballot for all special district elections conducted after the initial election in the district shall be the same as the requirements for the initial election in the district. No primary elections may be held for the governing body of a special district.

(5)(a) Whenever a vacancy occurs in the governing body, the legislative authority of the county within which the largest portion of the special flood district is located shall appoint a district voter to serve until a person is elected, at the next special district general election occurring sixty or more days after the vacancy has occurred, to serve the remainder of the unexpired term. The person so elected shall take office immediately when qualified as defined in RCW 29A.04.133.

(b) If an election for the position which became vacant would otherwise have been held at this special district election, only one election shall be held and the person elected to fill the succeeding term for that position shall take office immediately when qualified as defined in RCW 29A.04.133 and shall serve both the remainder of the unexpired term and the succeeding term. A vacancy occurs upon the death, resignation, or incapacity of a governing body member or whenever the governing body member ceases being a qualified voter of the special district.

(6) An elected or appointed member of a special district governing body, or a candidate for a special district governing body, must be a qualified voter of the special district: PROVIDED, That the state, its agencies and political subdivisions, or their designees under RCW 85.38.010(3) shall not be eligible for election or appointment."

Senator Swecker spoke in favor of adoption of the striking amendment.

The President declared the question before the Senate to be the adoption of the amendment by Senator Swecker to Substitute Senate Bill No. 5704.

The motion by Senator Swecker carried and the striking amendment was adopted by voice vote.

MOTION

There being no objection, the following title amendment was adopted:

On page 1, line 2 of the title, after "counties;" strike the remainder of the title and insert "amending RCW 85.38.090; and adding a new section to chapter 85.38 RCW."

MOTION

On motion of Senator Swecker, the rules were suspended, Engrossed Substitute Senate Bill No. 5704 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Senator Swecker spoke in favor of passage of the bill.

The President declared the question before the Senate to be the final passage of Engrossed Substitute Senate Bill No. 5704.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 5704 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

Excused: Senator McCaslin

ENGROSSED SUBSTITUTE SENATE BILL NO. 5704, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

MOTION

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

MOTION

On motion of Senator Eide, Substitute Senate Bill No. 6240 was not substituted for Senate Bill No. 6240 and the substitute bill was not adopted.

SECOND READING

SENATE BILL NO. 6240, by Senators Keiser, Eide, Kauffman, Gordon and McDermott

Regulating joint underwriting associations.

The measure was read the second time.

MOTION

Senator Eide moved that the following striking amendment by Senator Eide and others be adopted:

0)Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. Availability of insurance for loss arising from flooding in the geographical area protected by any dam on the Green river is vital to the economy of the state of Washington. If adequate property insurance for loss arising from this flood is not available, the security of citizens' property and the viability of business operations and services are threatened. This chapter gives the commissioner authority to ensure continued availability of excess insurance to insure property at risk from, and business that is interrupted by, flood arising from the failure of a dam on the Green river or from efforts to prevent the failure of a dam on the Green river. The commissioner may establish a temporary joint underwriting association for excess flood insurance to insure property at risk from, and business that is interrupted by, flood arising from the failure of a dam on the Green river or from efforts to prevent the failure of a dam on the Green river if:

(1) Excess flood insurance of a particular class or type is not available from the voluntary market; or

(2) There are so few insurers selling excess flood insurance that a competitive market does not exist.

The commissioner may use appropriated funds as needed to establish and supervise the association.

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

(1) "Association" means a nonprofit underwriting association established under this chapter.

(2) "Board" means the governing board of the association.

(3) "Casualty insurance" has the same meaning as "general casualty insurance" in RCW 48.11.070. "Casualty insurance" does not include any type of:

(a) Workers' compensation insurance;

(b) Employers' liability insurance;

(d) Surety insurance.

(4) "Excess flood insurance" means insurance against loss, including business interruption, arising from flood that is in excess of the limit of liability insurance offered by the national flood insurance program.

(5) "Person" means a natural person, association, partnership, or corporation.

(6) "Property insurance" has the same meaning as in RCW 48.11.040 and does not include surety insurance.

NEW SECTION. Sec. 3. (1) The commissioner may create an association to provide excess flood insurance to insure property at risk from, and business that is interrupted by, flood arising from the failure of a dam on the Green river or from efforts to prevent the failure of a dam on the Green river if the requirements of this section are met.

(2) The commissioner must hold a hearing under chapters 48.04 and 34.05 RCW before forming an association.

(3) An association may not begin underwriting operations for excess flood or business interruption insurance until the commissioner finds that:

(a) If a market assistance plan formed under section 15 of this act finds that there are fewer than four admitted or surplus lines insurers offering excess flood insurance, exclusive of personal insurance, then the market assistance plan is inadequate to insure property at risk from, and business that is interrupted by, flood arising from the failure of a dam on the Green river or from efforts to prevent the failure of a dam on the Green river;

(b) Persons cannot buy excess flood insurance through the voluntary market; or

(4) At a hearing to appeal the commissioner's finding that excess flood insurance is unavailable through the voluntary market or that a competitive market does not exist, the finding that four or more admitted or surplus lines insurers are offering excess flood insurance, exclusive of personal insurance, is prima facie evidence that a competitive market does exist. A decision of the commissioner, finding that excess flood insurance is unavailable through the market assistance plan, voluntary market, or that a competitive market does not exist, may be appealed under chapters 48.04 and 34.05 RCW.

NEW SECTION. Sec. 4. (1) The association may offer policies only as follows:

(a) The coverage of any one policy may not exceed five million dollars; and

(b) The total amount of all coverage offered by the association may never exceed two hundred fifty million dollars.

(2) The board, jointly with the commissioner, shall apportion policies within these limitations on an equitable basis.

NEW SECTION. Sec. 5. (1) If an association is formed, a person that is unable to obtain excess flood or business interruption insurance because it is unavailable in the voluntary market or because the market is not competitive is eligible to apply to an association for insurance.

(2) The association may decline to insure particular persons that present an extraordinary risk because of the nature of their operations, property condition, past claims experience, or inadequate risk management. However, the location of a property for which insurance is sought from the association must not, in and of itself, constitute an extraordinary risk.

(3) Any decision to decline coverage must be sent to the applicant and include:

(a) A statement of the actual reason for declination; and

(b) A statement that the applicant may appeal the decision to the commissioner.

(4) If the commissioner finds that the decision to decline coverage is not supported by the criteria in this section, the commissioner may require the association to provide coverage.

(5) A decision of the commissioner to provide or to decline to provide coverage under this may be appealed under chapters 48.04 and 34.05 RCW.

NEW SECTION. Sec. 6. (1) The association is composed of all insurers that have a certificate of authority to write either casualty or property insurance, or both, in this state. Every property or casualty insurer, or both, must be a member of the association as a condition of its authority to continue to transact business in this state.

(2) The association has the general powers and limitations of a nonprofit corporation under chapter 24.03 RCW and of an insurance company under Title 48 RCW, as needed to transact its business.

(3) To the extent consistent with this chapter, the association and its member insurers are "persons" under chapter 48.30 RCW.

NEW SECTION. Sec. 7. (1) A governing board shall administer the association.

(2) The board and the commissioner shall work cooperatively to achieve the objectives of this chapter.

(3) The board may select and employ one or more persons to manage the operations of an association. Every managing person must be authorized to transact insurance in the state of Washington and have demonstrated expertise in excess flood insurance. The board may employ any advisors that the board deems necessary.

(4) The board must consist of seven persons appointed as set forth in this subsection.

(a) Three board members must be member insurers appointed by each of the following three trade associations: Property casualty insurers association of America, American insurance association, and national association of mutual insurance companies. At least one of the three insurers on the board must be a domestic insurer.

(b) Four board members must be residents of the state. One is appointed by the insurance commissioner. One is appointed by the King county council. One is appointed by the association of Washington cities, to represent one or more of the following municipal governments: Auburn, Kent, Renton, or Tukwila. One is appointed by the board of directors of the center for advanced manufacturing Puget Sound. None of the resident-appointees may be employed by, serve on the board of directors of, or have a substantial ownership interest in any insurer.

(c) Original board members must be appointed to serve an initial term of three years and may be appointed for a second term. Board members may serve consecutive terms. Successor board members must be appointed as soon as possible subject to (a) and (b) of this subsection.

(5) The commissioner shall notify the members of the board if he or she has information that any board member is dishonest, reckless, or incompetent or is failing to perform any duty of his or her office, and the board shall meet immediately to consider the matter. The commissioner must receive notice of the time and place of this meeting. If the board finds by a majority of the board members, with the accused board member not voting on this matter, that the commissioner's objection is well-founded, the accused board member shall be removed immediately. The successor of a board member removed under this section must be appointed as soon as possible subject to subsection (4) of this section.

(6) All members of the board shall conduct the business of the association in a manner that is in the interest of all policyholders of the association. Board members stand in a fiduciary relationship to the association and must discharge their duties in good faith and with that diligence, care, and skill that ordinary, prudent persons would exercise under similar circumstances in a like position.

(7) Each person serving on the board or any subcommittee thereof, each member insurer of the association, and each officer and employee of the association must be indemnified by the association against all costs and expenses actually and necessarily incurred by him, her, or it in connection with the defense of any action, suit, or proceeding in which he, she, or it is made a party by reason of his, her, or its being or having been a member of the board, or a member or officer or employee of the association, except in relation to matters as to which he, she, or it has been judged in such action, suit, or proceeding to be liable by reason of willful misconduct in the performance of his, her, or its duties as a member of the board, or member, officer, or employee of the association. This indemnification is not exclusive of other rights as to which the member, officer, or employee may be entitled as a matter of law.

(8) Members of the board may be reimbursed by the association for actual and necessary expenses incurred to attend meetings.

NEW SECTION. Sec. 8. (1) The board must adopt a plan of operation within thirty days of its appointment.

(2) The plan of operation may take effect only after it has been reviewed by the commissioner. Any changes recommended by the commissioner must be either approved by a majority of the members of the board or a written statement of the board's reasons for rejection of any provision provided to the commissioner. The commissioner may continue to consult with the board to arrive at a plan of operation that is approved by both the commissioner and the board, or the commissioner may accept the plan of operation of the board. This process must conclude with a plan of operation accepted by the board within thirty days of the first board appointed under this act.

(a) The plan of operation may be amended by agreement of a majority of the members of the board and the commissioner.

(b) The association must use rates that are demonstrably sound as compared to accepted actuarial standards. At the time of filing with the commissioner, the rates must be accompanied by an actuarial analysis. The rates must comply with chapter 48.19 RCW and be approved by the commissioner.

NEW SECTION. Sec. 9. The association must file a statement annually with the commissioner that contains information about the association's transactions, financial condition, and operations during the preceding year. The statement must be in the form and in a manner approved by the commissioner. The association must maintain its records according to the accounting practices and procedures manual adopted by the national association of insurance commissioners. The commissioner may require the association to furnish additional information if the commissioner considers it necessary to evaluate the scope, operation, and experience of the association.

NEW SECTION. Sec. 10. (1) The commissioner may examine the transactions, financial condition, and operations of the association when the commissioner finds it necessary in order to carry out the purposes of this chapter. Except as set forth in subsections (2) and (3) of this section, each examination must be conducted in the manner prescribed for domestic insurance companies in chapter 48.03 or 48.37 RCW.

(2) The commissioner is not required to examine any association on a prescribed cycle or schedule.

(3) An association created under this chapter is responsible for the total costs of its financial and market conduct examinations. RCW 48.03.060 (1) and (2) and 48.37.060(14) (a) and (b) are not applicable to the examination of an association created under this chapter.

NEW SECTION. Sec. 11. (1) The association is not a member of the guaranty fund created under chapter 48.32 RCW. The guaranty fund, this state, and any political subdivisions are not responsible for losses sustained by the association.

(2) The association is exempt from payment of all fees and all taxes levied by the state or any of its subdivisions, except taxes levied on real or personal property.

NEW SECTION. Sec. 12. (1) The association is funded by premiums paid by persons insured by the association.

(a) All premiums for the association must be deposited into a fund or funds under management of the board.

(b) Premiums must be used to pay claims, administrative costs, and other expenses of the association.

(2) The association may assess its members to pay past and future financial obligations of the association, not funded by premiums.

(3) If the association makes an assessment, an assessed insurer must pay the association within thirty days after it receives notice of the assessment. If an insurer does not pay an assessment within thirty days after it receives notice of the assessment:

(a) The assessment accrues interest at the maximum legal rate until it is paid in full. The interest is paid to the association;

(b) The association may collect the assessment in a civil action and must be awarded its attorneys' fees if it prevails;

(d) The commissioner may fine the insurer up to ten thousand dollars.

(4) This section may be enforced under RCW 48.02.080.

NEW SECTION. Sec. 13. (1) The association may operate for a period of five years. At the end of the five-year period, the association must be dissolved unless the legislature authorizes its continued operation.

(2) If, at any time, the commissioner or the board of directors holds a hearing under chapters 48.04 and 34.05 RCW and determines that excess flood and business interruption insurance is available through a market assistance plan, in the voluntary market, or that a competitive market exists, the commissioner must order the association to end its underwriting operations.

(3) If the commissioner or the board of directors orders the association to end all underwriting operations, the commissioner must supervise the dissolution of the association, including settlement of all financial and legal obligations and distribution of any remaining assets as follows:

(a) If there has been an assessment on the members of the association, and after all creditors of the association are paid in full, then to the member insurers in a proportional manner and as determined by rule by the commissioner; or

(b) If there has not been an assessment on the members of the association, or if there are funds remaining after distribution under (a) of this subsection and after all creditors of the association are paid in full, then to the policyholders in a proportional manner and as determined by rule by the commissioner.

NEW SECTION. Sec. 14. The commissioner may adopt all rules needed to implement and administer this chapter and to ensure the efficient operation of the association, including but not limited to rules:

(1) Creating sample plans of operation for the assistance of the board;

(2) Requiring or limiting certain policy provisions;

(3) Containing the basis and method for assessing members for operation of the association; and

(4) Establishing the order in which the assets of the association that is dissolved by the commissioner must be distributed.

NEW SECTION. Sec. 15. (1) The commissioner must by rule require insurers authorized to write property insurance in this state to form a market assistance plan to assist persons located in the geographical area protected by any dam on the Green river that are unable to purchase excess flood or business interruption insurance in an adequate amount from either the admitted or nonadmitted market.

(2) For the purpose of this section, a market assistance plan means a voluntary mechanism by insurers writing property insurance in this state in either the admitted or nonadmitted market to provide excess flood or business interruption insurance for a class of insurance as designated in writing to the plan by the commissioner.

(3) The bylaws and method of operation of any market assistance plan must be approved by the commissioner prior to its operation.

(4) A market assistance plan must have a minimum of twenty-five insurers willing to insure risks within the class designated by the commissioner. If twenty-five insurers do not voluntarily agree to participate, the commissioner may require either property or property and casualty, or both, insurers to participate in a market assistance plan as a condition of continuing to do business in this state. The commissioner must make this requirement to fulfill the quota of at least twenty-five insurers. The commissioner must make his or her designation on the basis of the insurer's premium volume of property insurance in this state.

NEW SECTION. Sec. 16. The board and the commissioner shall report to the respective committees of the house of representatives and senate having jurisdiction over the insurance code by January 31, 2011, and each subsequent January 31st of each year that the association remains in existence.

Sec. 17. RCW 48.15.040 and 1983 1st ex.s. c 32 s 4 are each amended to read as follows:

If certain insurance coverages cannot be procured from authorized insurers, such coverages, hereinafter designated as "surplus lines," may be procured from unauthorized insurers subject to the following conditions:

(1) The insurance must be procured through a licensed surplus line broker.

(2) The insurance must not be procurable, after diligent effort has been made to do so from among a majority of the insurers authorized to transact that kind of insurance in this state.

(3) Coverage shall not be procured from an unauthorized insurer for the purpose of securing a lower premium rate than would be accepted by any authorized insurer nor to secure any other competitive advantage.

(4) The commissioner may by regulation establish the degree of effort required to comply with subsections (2) and (3) of this section.

(5) At the time of the procuring of any such insurance an affidavit setting forth the facts referred to in subsections (2) and (3) of this section must be executed by the surplus line broker. Such affidavit shall be filed with the commissioner within thirty days after the insurance is procured.

(6) For purposes of chapter 48.-- RCW (the new chapter created in section 18 of this act), a joint underwriting association established or authorized by the legislature is not an authorized insurer.

NEW SECTION. Sec. 18. Sections 1 through 16 of this act constitute a new chapter in Title 48 RCW.

NEW SECTION. Sec. 19. 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.

NEW SECTION. Sec. 20. This act expires December 31, 2016."

Senator Eide spoke in favor of adoption of the striking amendment.

Senator Schoesler spoke against adoption of the striking amendment.

MOTION

Senator Pflug, moved that further consideration of Senate Bill No. 6240 be deferred and the bill hold its place on the second reading calendar.

Senators Eide and Keiser spoke against the motion to defer.

Senator Roach spoke in favor of the motion to defer.

The President declared the question before the Senate to be the motion by Senator Pflug that further consideration of Senate Bill No. 6240 be deferred.

The motion by Senator Pflug did not carry by voice vote.

The President declared the question before the Senate to be the adoption of the striking amendment by Senator Eide and others to Senate Bill No. 6240.

The motion by Senator Eide carried and the striking amendment was adopted by voice vote.

MOTION

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the title, after "associations;" strike the remainder of the title and insert "amending RCW 48.15.040; adding a new chapter to Title 48 RCW; providing an expiration date; and declaring an emergency."

MOTION

On motion of Senator Eide, the rules were suspended, Engrossed Senate Bill No. 6240 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Senators Kauffman and Keiser spoke in favor of passage of the bill.

Senators Schoesler and Pflug spoke against passage of the bill.

POINT OF INQUIRY

Senator Benton: “Would the lady from the Thirty-Fifth yield to a question? I’m sorry, Thirty-Third, Mr. President. Senator, can I clarify in your statement and I was trying to listen very closely but I wanted to make sure. I thought I heard you say that it no longer spreads the risk across the entire state. Is that correct? That it’s limited now in the bill?

Senator Keiser: “The joint underwriting association is limited to the Green River Valley. That’s where the market assistance plant will be limited to, as well as, if there needs to be a JUA, the businesses that could be part of the JUA and pay premiums to the JUA would be only in the Kent Valley. But the risk, I am saying, is spread across all of us. We all share the risk. Our economy shares the risk. We all share the risk if there is catastrophic flooding. Hopefully there won’t be.”

The President declared the question before the Senate to be the final passage of Engrossed Senate Bill No. 6240.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6240 and the bill passed the Senate by the following vote: Yeas, 30; Nays, 18; Absent, 0; Excused, 1.

Voting yea: Senators Berkey, Brown, Eide, Fairley, Franklin, Fraser, Gordon, Hargrove, Hatfield, Haugen, Hobbs, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, McAuliffe, McDermott, Murray, Oemig, Prentice, Pridemore, Ranker, Regala, Roach, Rockefeller, Shin and Tom

Voting nay: Senators Becker, Benton, Brandland, Carrell, Delvin, Hewitt, Holmquist, Honeyford, King, Marr, Morton, Parlette, Pflug, Schoesler, Sheldon, Stevens, Swecker and Zarelli

Excused: Senator McCaslin

ENGROSSED SENATE BILL NO. 6240, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

MOTION TO LIMIT DEBATE

Senator Eide: “Mr. President, I move that the members of the Senate be allowed to speak but once on each question before the Senate, that such speech be limited to three minutes and that members be prohibited from yielding their time, however, the maker of a motion shall be allowed to open and close debate. This motion shall be in effect through February 9, 2010.”

The President declared the question before the Senate to be the motion by Senator Eide to limit debate.

The motion by Senator Eide carried and debate was limited through February 9, 2010 by voice vote.

REMARKS BY THE PRESIDENT

President Owen: “The President would note that he has acquired a new timer to make sure that we’re accurate in our debates. … Oh yeah, it’s perfectly within time. Yeah, Mine.”

PERSONAL PRIVILEGE

Senator Hewitt: “So, I’m wondering, do you have two of those so if we stop debate half way do we have to tip it upside down and wait for the, this high tech thing to end up so we can then go on with debate. How does this work?”

REPLY BY THE PRESIDENT

President Owen: “We’ll cross that bridge when we get to it Senator.”

SECOND READING

SENATE BILL NO. 6286, by Senators Kline, Haugen, Tom, Keiser, Kauffman and McDermott

Concerning the liability and powers of cities and flood control zone districts.

MOTION

On motion of Senator Kline, Substitute Senate Bill No. 6286 was substituted for Senate Bill No. 6286 and the substitute bill was placed on the second reading and read the second time.

MOTION

Senator Haugen moved that the following amendment by Senator Haugen be adopted.

0) On page 1, line 6, after "city," insert "diking district,"

On page 1, line 11, after "cities," insert "diking district or districts,"

Senator Haugen spoke in favor of adoption of the amendment.

The President declared the question before the Senate to be the adoption of the amendment by Senator Haugen on page 1, line 6 to Substitute Senate Bill No. 6286.

The motion by Senator Haugen carried and the amendment was adopted by voice vote.

MOTION

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the title, after "cities" insert ", diking districts,"

MOTION

On motion of Senator Kline, the rules were suspended, Engrossed Substitute Senate Bill No. 6286 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Senators Kline and Swecker spoke in favor of passage of the bill.

The President declared the question before the Senate to be the final passage of Engrossed Substitute Senate Bill No. 6286.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 6286 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

Excused: Senator McCaslin

ENGROSSED SUBSTITUTE SENATE BILL NO. 6286, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 2998, by House Committee on Ways & Means (originally sponsored by Representatives Seaquist, Armstrong, Hunt, Kessler, Wallace, Conway and Darneille)

Suspending certain monetary awards and salary increases.

The measure was read the second time.

MOTION

Senator Tom moved that the following committee striking amendment by the Committee on Ways & Means be adopted:

0)Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that the current economic crisis is requiring sacrifices by citizens and businesses all across the state. The legislature acknowledges the sacrifices also being made by the many state employees who have volunteered for unpaid furlough days including those, such as our ferry workers, who volunteered for pay freezes. The recession requires us to continue to find every possible cost savings while striving to continue to deliver key services to our citizens. Therefore, the legislature finds it necessary to immediately suspend recognition awards given to state employees. Until the economic climate permits the resumption of appropriate cash awards, the legislature encourages supervisors throughout state agencies to look for nonmonetary ways to acknowledge outstanding contributions to Washington's citizens by our state's civil servants.

Sec. 2. RCW 41.06.070 and 2009 c 33 s 36 and 2009 c 5 s 1 are each reenacted and amended to read as follows:

(1) The provisions of this chapter do not apply to:

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

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

(d) The officers of the Washington state patrol;

(e) Elective officers of the state;

(f) The chief executive officer of each agency;

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

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

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

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

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

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

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

(j) Assistant attorneys general;

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

(l) Inmate, student, part-time, or temporary employees, and part-time professional consultants, as defined by the Washington personnel resources board;

(m) The public printer or to any employees of or positions in the state printing plant;

(n) Officers and employees of the Washington state fruit commission;

(o) Officers and employees of the Washington apple commission;

(p) Officers and employees of the Washington state dairy products commission;

(q) Officers and employees of the Washington tree fruit research commission;

(r) Officers and employees of the Washington state beef commission;

(s) Officers and employees of the Washington grain commission;

(t) Officers and employees of any commission formed under chapter 15.66 RCW;

(u) Officers and employees of agricultural commissions formed under chapter 15.65 RCW;

(v) Officers and employees of the nonprofit corporation formed under chapter 67.40 RCW;

(w) Executive assistants for personnel administration and labor relations in all state agencies employing such executive assistants including but not limited to all departments, offices, commissions, committees, boards, or other bodies subject to the provisions of this chapter and this subsection shall prevail over any provision of law inconsistent herewith unless specific exception is made in such law;

(x) In each agency with fifty or more employees: Deputy agency heads, assistant directors or division directors, and not more than three principal policy assistants who report directly to the agency head or deputy agency heads;

(y) All employees of the marine employees' commission;

(z) Staff employed by the department of ((~~community, trade, and economic development~~)) commerce to administer energy policy functions and manage energy site evaluation council activities under RCW 43.21F.045(2)(m);

(aa) Staff employed by Washington State University to administer energy education, applied research, and technology transfer programs under RCW 43.21F.045 as provided in RCW 28B.30.900(5).

(2) The following classifications, positions, and employees of institutions of higher education and related boards are hereby exempted from coverage of this chapter:

(a) Members of the governing board of each institution of higher education and related boards, all presidents, vice presidents, and their confidential secretaries, administrative, and personal assistants; deans, directors, and chairs; academic personnel; and executive heads of major administrative or academic divisions employed by institutions of higher education; principal assistants to executive heads of major administrative or academic divisions; other managerial or professional employees in an institution or related board having substantial responsibility for directing or controlling program operations and accountable for allocation of resources and program results, or for the formulation of institutional policy, or for carrying out personnel administration or labor relations functions, legislative relations, public information, development, senior computer systems and network programming, or internal audits and investigations; and any employee of a community college district whose place of work is one which is physically located outside the state of Washington and who is employed pursuant to RCW 28B.50.092 and assigned to an educational program operating outside of the state of Washington;

(b) The governing board of each institution, and related boards, may also exempt from this chapter classifications involving research activities, counseling of students, extension or continuing education activities, graphic arts or publications activities requiring prescribed academic preparation or special training as determined by the board: PROVIDED, That no nonacademic employee engaged in office, clerical, maintenance, or food and trade services may be exempted by the board under this provision;

(3) In addition to the exemptions specifically provided by this chapter, the director of personnel may provide for further exemptions pursuant to the following procedures. The governor or other appropriate elected official may submit requests for exemption to the director of personnel stating the reasons for requesting such exemptions. The director of personnel shall hold a public hearing, after proper notice, on requests submitted pursuant to this subsection. If the director determines that the position for which exemption is requested is one involving substantial responsibility for the formulation of basic agency or executive policy or one involving directing and controlling program operations of an agency or a major administrative division thereof, the director of personnel shall grant the request and such determination shall be final as to any decision made before July 1, 1993. The total number of additional exemptions permitted under this subsection shall not exceed one percent of the number of employees in the classified service not including employees of institutions of higher education and related boards for those agencies not directly under the authority of any elected public official other than the governor, and shall not exceed a total of twenty-five for all agencies under the authority of elected public officials other than the governor.

The salary and fringe benefits of all positions presently or hereafter exempted except for the chief executive officer of each agency, full-time members of boards and commissions, administrative assistants and confidential secretaries in the immediate office of an elected state official, and the personnel listed in subsections (1)(j) through (v) and (y) and (2) of this section, shall be determined by the director of personnel. Changes to the classification plan affecting exempt salaries must meet the same provisions for classified salary increases resulting from adjustments to the classification plan as outlined in RCW 41.06.152.

For the twelve months following February 18, 2009, a salary or wage increase shall not be granted to any position exempt from classification under this chapter.

Any person holding a classified position subject to the provisions of this chapter shall, when and if such position is subsequently exempted from the application of this chapter, be afforded the following rights: If such person previously held permanent status in another classified position, such person shall have a right of reversion to the highest class of position previously held, or to a position of similar nature and salary.

Any classified employee having civil service status in a classified position who accepts an appointment in an exempt position shall have the right of reversion to the highest class of position previously held, or to a position of similar nature and salary.

A person occupying an exempt position who is terminated from the position for gross misconduct or malfeasance does not have the right of reversion to a classified position as provided for in this section.

From the effective date of this section until June 30, 2011, no monetary performance-based awards or incentives may be granted by the director or employers to employees covered by rules adopted under this section. This subsection does not prohibit the payment of awards provided for in chapter 41.60 RCW.

Sec. 3. RCW 41.06.133 and 2009 c 534 s 2 and 2009 c 5 s 2 are each reenacted and amended to read as follows:

(1) The director shall adopt rules, consistent with the purposes and provisions of this chapter and with the best standards of personnel administration, regarding the basis and procedures to be followed for:

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

(b) Training and career development;

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

(d) Transfers;

(e) Promotional preferences;

(f) Sick leaves and vacations;

(g) Hours of work;

(h) Layoffs when necessary and subsequent reemployment, except for the financial basis for layoffs;

(i) The number of names to be certified for vacancies;

(j) Adoption and revision of a state salary schedule to reflect the prevailing rates in Washington state private industries and other governmental units. The rates in the salary schedules or plans shall be increased if necessary to attain comparable worth under an implementation plan under RCW 41.06.155 and, for institutions of higher education and related boards, shall be competitive for positions of a similar nature in the state or the locality in which an institution of higher education or related board is located. Such adoption and revision is subject to approval by the director of financial management in accordance with chapter 43.88 RCW;

(l) Optional lump sum relocation compensation approved by the agency director, whenever it is reasonably necessary that a person make a domiciliary move in accepting a transfer or other employment with the state. An agency must provide lump sum compensation within existing resources. If the person receiving the relocation payment terminates or causes termination with the state, for reasons other than layoff, disability separation, or other good cause as determined by an agency director, within one year of the date of the employment, the state is entitled to reimbursement of the lump sum compensation from the person;

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

(2) Rules adopted under this section by the director shall provide for local administration and management by the institutions of higher education and related boards, subject to periodic audit and review by the director.

(3) Rules adopted by the director under this section may be superseded by the provisions of a collective bargaining agreement negotiated under RCW 41.80.001 and 41.80.010 through 41.80.130. The supersession of such rules shall only affect employees in the respective collective bargaining units.

(4)(a) The director shall require that each state agency report annually the following data:

(i) The number of classified, Washington management service, and exempt employees in the agency and the change compared to the previous report;

(ii) The number of bonuses and performance-based incentives awarded to agency staff and the base wages of such employees; and

(iii) The cost of each bonus or incentive awarded.

(b) A report that compiles the data in (a) of this subsection for all agencies will be provided annually to the governor and the appropriate committees of the legislature and must be posted for the public on the department of personnel's agency web site.

(5) From the effective date of this section until June 30, 2011, no monetary performance-based awards or incentives may be granted by the director or employers to employees covered by rules adopted under this section. This subsection does not prohibit the payment of awards provided for in chapter 41.60 RCW.

Sec. 4. RCW 41.06.500 and 2009 c 5 s 3 are each amended to read as follows:

(1) Except as provided in RCW 41.06.070, notwithstanding any other provisions of this chapter, the director is authorized to adopt, after consultation with state agencies and employee organizations, rules for managers as defined in RCW 41.06.022. These rules shall not apply to managers employed by institutions of higher education or related boards or whose positions are exempt. The rules shall govern recruitment, appointment, classification and allocation of positions, examination, training and career development, hours of work, probation, certification, compensation, transfer, affirmative action, promotion, layoff, reemployment, performance appraisals, discipline, and any and all other personnel practices for managers. These rules shall be separate from rules adopted for other employees, and to the extent that the rules adopted under this section apply only to managers shall take precedence over rules adopted for other employees, and are not subject to review by the board.

(2) In establishing rules for managers, the director shall adhere to the following goals:

(a) Development of a simplified classification system that facilitates movement of managers between agencies and promotes upward mobility;

(b) Creation of a compensation system that provides flexibility in setting and changing salaries, and shall require review and approval by the director in the case of any salary changes greater than five percent proposed for any group of employees;

(c) Establishment of a performance appraisal system that emphasizes individual accountability for program results and efficient management of resources; effective planning, organization, and communication skills; valuing and managing workplace diversity; development of leadership and interpersonal abilities; and employee development;

(d) Strengthening management training and career development programs that build critical management knowledge, skills, and abilities; focusing on managing and valuing workplace diversity; empowering employees by enabling them to share in workplace decision making and to be innovative, willing to take risks, and able to accept and deal with change; promoting a workplace where the overall focus is on the recipient of the government services and how these services can be improved; and enhancing mobility and career advancement opportunities;

(e) Permitting flexible recruitment and hiring procedures that enable agencies to compete effectively with other employers, both public and private, for managers with appropriate skills and training; allowing consideration of all qualified candidates for positions as managers; and achieving affirmative action goals and diversity in the workplace;

(f) Providing that managers may only be reduced, dismissed, suspended, or demoted for cause; and

(g) Facilitating decentralized and regional administration.

(3) For the twelve months following February 18, 2009, a salary or wage increase shall not be granted to any position under this section.

(4) From the effective date of this section until June 30, 2011, no monetary performance-based awards or growth and development progression adjustments may be granted by the director or employers to the Washington management service employees covered by the rules adopted under this section. This subsection does not prohibit the payment of awards provided for in chapter 41.60 RCW.

Sec. 5. RCW 43.180.080 and 1997 c 163 s 1 are each amended to read as follows:

In addition to other powers and duties specified in this chapter, the commission may:

(1) Establish in resolutions relating to any issuance of bonds, or in any financing documents relating to such issuance, such standards and requirements applicable to the purchase of mortgages and mortgage loans or the making of loans to mortgage lenders as the commission deems necessary or desirable, including but not limited to: (a) The time within which mortgage lenders must make commitments and disbursements for mortgages or mortgage loans; (b) the location and other characteristics of single-family housing or multifamily housing to be financed by mortgages and mortgage loans; (c) the terms and conditions of mortgages and mortgage loans to be acquired; (d) the amounts and types of insurance coverage required on mortgages, mortgage loans, and bonds; (e) the representations and warranties of mortgage lenders confirming compliance with such standards and requirements; (f) restrictions as to interest rate and other terms of mortgages or mortgage loans or the return realized therefrom by mortgage lenders; (g) the type and amount of collateral security to be provided to assure repayment of any loans from the commission and to assure repayment of bonds; and (h) any other matters related to the purchase of mortgages or mortgage loans or the making of loans to lending institutions as shall be deemed relevant by the commission;

(2) Sue and be sued in its own name;

(3) Make and execute contracts and all other instruments necessary or convenient for the exercise of its purposes or powers, including but not limited to contracts or agreements for the origination, servicing, and administration of mortgages or mortgage loans, and the borrowing of money;

(4) Procure such insurance, including but not limited to insurance: (a) Against any loss in connection with its property and other assets, including but not limited to mortgages or mortgage loans, in such amounts and from such insurers as the commission deems desirable, and (b) to indemnify members of the commission for acts done in the course of their duties;

(5) Provide for the investment of any funds, including funds held in reserve, not required for immediate disbursement, and provide for the selection of investments;

(6) Fix, revise, and collect fees and charges in connection with the investigation and financing of housing or in connection with assignments, contracts, purchases of mortgages or mortgage loans, or any other actions permitted under this chapter or by the commission; and receive grants and contributions;

(7) Make such expenditures as are appropriate for paying the administrative costs of the commission and for carrying out the provisions of this chapter. These expenditures may be made only from funds consisting of the commission's receipts from fees and charges, grants and contributions, the proceeds of bonds issued by the commission, and other revenues; these expenditures shall not be made from funds of the state of Washington;

(8) Establish such special funds, and controls on deposits to and disbursements from them, as it finds convenient for the implementation of this chapter;

(9) Conduct such investigations and feasibility studies as it deems appropriate;

(10) Proceed with foreclosure actions or accept deeds in lieu of foreclosure together with the assignments of leases and rentals incidental thereto. Any properties acquired by the commission through such actions shall be sold as soon as practicable through persons licensed under chapter 18.85 RCW or at public auction, or by transfer to a public agency. In preparation for the disposition of the properties, the commission may own, lease, clear, construct, reconstruct, rehabilitate, repair, maintain, manage, operate, assign, or encumber the properties;

(11) Take assignments of leases and rentals;

(12) Subject to any provisions of the commission's contracts with the holders of obligations of the commission, consent to any modification with respect to rate of interest, time, and payment of any installment of principal or interest or any other term of any contract, mortgage, mortgage loan, mortgage loan commitment, contract, or agreement of any kind;

(13) Subject to provisions of the commission's contracts with the holders of bonds, permit the reduction of rental or carrying charges to persons unable to pay the regular rent or schedule of charges if, by reason of other income of the commission or by reason of payment by any department, agency, or instrumentality of the United States or of this state, the reduction can be made without jeopardizing the economic stability of the housing being financed;

(14) Sell, at public or private sale, with or without public bidding, any mortgage, mortgage loan, or other instrument or asset held by the commission;

(15) Employ, contract with, or engage engineers, architects, attorneys, financial advisors, bond underwriters, mortgage lenders, mortgage administrators, housing construction or financing experts, other technical or professional assistants, and such other personnel as are necessary. The commission may delegate to the appropriate persons the power to execute legal instruments on its behalf;

(16) Receive contributions or grants from any source unless otherwise prohibited;

(17) Impose covenants running with the land in order to satisfy and enforce the requirements of applicable state and federal law and commission policy with respect to housing or other facilities financed by the commission or assisted by federal, state, or local programs administered by the commission, by executing and recording regulatory agreements or other covenants between the commission and the person or entity to be bound. These regulatory agreements and covenants shall run with the land and be enforceable by the commission or its successors or assigns against the person or entity making the regulatory agreement or covenants or its successors or assigns, even though there may be no privity of estate or privity of contract between the commission or its successors or assigns and the person or entity against whom enforcement is sought. The term of any such covenant shall be set forth in the recorded agreement containing the covenant. This subsection shall apply to regulatory agreements and covenants previously entered into by the commission as well as regulatory agreements and covenants entered into by the commission on or after July 27, 1997;

(18) Delegate any of its powers and duties if consistent with the purposes of this chapter;

(19) Exercise any other power reasonably required to implement the purposes of this chapter.

From the effective date of this section through June 30, 2011, neither the commission nor its designees may grant any monetary performance-based awards or incentives to any employee. This subsection does not prohibit the payment of awards provided for in chapter 41.60 RCW.

NEW SECTION. Sec. 6. A new section is added to chapter 41.06 RCW to read as follows:

From the effective date of this section until June 30, 2011, no monetary performance-based awards or incentives may be granted by the director or employers to employees covered by rules adopted under this section. This section does not prohibit the payment of awards provided for in chapter 41.60 RCW.

NEW SECTION. Sec. 7. 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."

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Ways & Means to Substitute House Bill No. 2998.

The motion by Senator Tom carried and the committee striking amendment was adopted by voice vote.

MOTION

There being no objection, the following title amendment was adopted:

On page 1, line 2 of the title, after "increases;" strike the remainder of the title and insert "amending RCW 41.06.500 and 43.180.080; reenacting and amending RCW 41.06.070 and 41.06.133; adding a new section to chapter 41.06 RCW; creating a new section; and declaring an emergency."

MOTION

On motion of Senator Tom, the rules were suspended, Substitute House Bill No. 2998 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Senators Tom and Zarelli spoke in favor of passage of the bill.

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 2998 as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 2998 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

Excused: Senator McCaslin

SUBSTITUTE HOUSE BILL NO. 2998 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2921, by House Committee on Ways & Means (originally sponsored by Representatives Linville, Darneille, Ericks, Pettigrew, Probst, Haigh, Sullivan, Kelley and Wallace)

Capturing additional savings. Revised for 1st Substitute: Making 2010 supplemental operating appropriations.

The measure was read the second time.

MOTION

Senator Tom moved that the following committee amendment by the Committee on Ways & Means be adopted.

0) On page 96, line 34, after "activities," insert "where the costs are for the review and research conducted by the joint transportation committee pursuant to RCW 44.04.300,"

The President declared the question before the Senate to be the adoption of the committee amendment by the Committee on Ways & Means to Engrossed Substitute House Bill No. 2921.

The motion by Senator Tom carried and the committee amendment was adopted by voice vote.

MOTION

Senator Tom moved that the following amendment by Senator Tom be adopted.

On page 98, line 28, after "director of financial management" and before the period, insert "or the director's designee"

The President declared the question before the Senate to be the adoption of the amendment by Senator Tom on page 98, line 28 to Engrossed Substitute House Bill No. 2921.

The motion by Senator Tom carried and the amendment was adopted by voice vote.

MOTION

Senator Tom moved that the following committee amendment by the Committee on Ways & Means be adopted:

0) On page 99, after 14, insert the following:

"(5) Sections 601 through 604 of this act do not apply to agricultural commodity commissions and boards, and agricultural inspection programs operated by the department of agriculture."

The President declared the question before the Senate to be the adoption of the committee amendment by the Committee on Ways & Means to Engrossed Substitute House Bill No. 2921.

The motion by Senator Tom carried and the committee amendment was adopted by voice vote.

MOTION

On motion of Senator Tom, the rules were suspended, Engrossed Substitute House Bill No. 2921 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Senators Tom and Zarelli spoke in favor of the passage of the bill.

Senator King spoke on final passage.

The President declared the question before the Senate to be the final passage of Engrossed Substitute House Bill No. 2921 as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2921 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 45; Nays, 3; Absent, 0; Excused, 1.

Voting yea: Senators Becker, Benton, Berkey, Brandland, Brown, Carrell, Delvin, Eide, Fairley, Franklin, Fraser, Gordon, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McDermott, Morton, Murray, Oemig, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Rockefeller, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

Voting nay: Senators Honeyford, King and Roach

Excused: Senator McCaslin

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2921 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

MOTION

On motion of Senator Eide, the Senate reverted to the fourth order of business.

MESSAGE FROM THE HOUSE

January 28, 2010

MR. PRESIDENT:

The House passed SUBSTITUTE SENATE BILL NO. 6382 with the following amendment(s): 6382-S AMH ENGR H4808.E

0)Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 41.06.070 and 2009 c 33 s 36 and 2009 c 5 s 1 are each reenacted and amended to read as follows:

(1) The provisions of this chapter do not apply to:

(d) The officers of the Washington state patrol;

(e) Elective officers of the state;

(f) The chief executive officer of each agency;

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

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

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

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

(j) Assistant attorneys general;

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

(l) Inmate, student, part-time, or temporary employees, and part- time professional consultants, as defined by the Washington personnel resources board;