BP BHEAD INT S

AN ACT Relating to a pilot project within the department of corrections and the department of information services to reduce financial and operational barriers to efficient service delivery; amending RCW 39.04.220, 39.29.040, 41.04.340, 41.06.380, 43.01.090, 43.19.715, 43.19.720, 43.78.030, 43.78.100, 43.82.010, 43.88.150, 43.88.180, 43.105.041, 43.105.052, and 72.09.100; reenacting and amending RCW 43.19.190, 43.88.030, 43.88.110, and 43.88.160; adding new sections to chapter 41.06 RCW; creating new sections; providing an effective date; and providing an expiration date.

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

NEW SECTION. Sec. 1. (1) The legislature finds that efficient, cost-effective delivery of quality services are essential as the state is faced with increasing revenue and expenditure constraints. It is, therefore, prudent for the state to determine whether or not greater budget and operational flexibility for agencies will result in better service delivery, and to provide agencies with a range of management tools to meet the challenges of the future.

(2) The commission on efficiency and accountability in state government, referred to in sections 1 through 6 of this act as the efficiency commission, has identified certain financial and operational requirements for state agencies that may be excessive and overly complex, inhibit sound budgetary and management practices, reduce risk-taking, innovation, and initiative in program management, and result in unnecessary barriers to providing cost-effective and quality service to our citizens. The efficiency commission has determined that the state should test whether or not agencies that operate without these requirements can provide services more efficiently and at less cost.

(3) It is, therefore, the purpose of this act to initiate a pilot project that will provide the legislature and the governor with sufficient information to evaluate the effectiveness of a variety of waivers and incentives that provide agencies with greater freedom to innovate. The goal of the project is an effective, efficient, quality-driven state government within which agencies have incentives and flexibility to continually improve service delivery.

(4) This act shall be known as the Blueprint for Change.

NEW SECTION. Sec. 2. (1) A three-year pilot project designed to evaluate the effects of waiving certain financial and administrative requirements for agencies and providing financial incentives to achieve improved service delivery and efficiency savings is established. The pilot project applies to the department of corrections and the department of information services.

(2) The pilot agencies, in collaboration with the efficiency commission, shall develop procedures to implement the pilot project.

(3) The pilot agencies, in collaboration with the efficiency commission and the office of financial management, shall develop reporting mechanisms to evaluate the effects of waivers and incentives.

(4) The pilot agencies shall report on the status of the project to the efficiency commission and the office of financial management on a quarterly basis for the period of the pilot project, unless otherwise determined by the efficiency commission, the office of financial management, and the pilot agencies.

(5) The agencies participating in the pilot project shall develop outcome-based performance measures for programs and internal operations affected by the incentives and waivers.

NEW SECTION. Sec. 3. (1) To carry out the pilot projects provided for in section 2 of this act, pilot agencies may institute, from July 1, 1994, to July 1, 1997, any or all of the following incentives and waivers:

(a) Pilot agencies may be exempt from:

(i) Allotment plan requirements under RCW 43.88.110, in those cases where the pilot agency can document that appropriate fiscal controls are in place;

(ii) Developing budgets at the object and subobject level under RCW 43.88.030 upon concurrence of the efficiency commission and the director of financial management that performance-based measures are adequate to identify and monitor agency performance and that the necessary agency internal controls are in place;

(iii) Full-time equivalent (FTE) and position/classification controls in the budget and by the office of financial management under RCW 43.88.160;

(iv) Limitations on purchasing services by contract, as specified in RCW 41.06.380, in those cases where the pilot agency can document that it can achieve cost savings, efficiencies, or improved performance and service delivery;

(v) Limitations on entering into personal service contracts, as specified in chapter 39.29 RCW, if the agency can document that appropriate management and fiscal controls over the contracts are in place and competitive procurement practices are followed;

(vi) State-wide requirements for purchasing, material control, and central stores under chapter 43.19 RCW;

(vii) State-wide requirements for acquisition of real estate under RCW 43.82.010 and for payment of real estate services under RCW 43.01.090;

(viii) Requirements for purchasing information services and products under chapter 43.105 RCW in those cases where the pilot agency can document that services and products can be obtained in a more timely or efficient manner, or at a lower price, and that adequate management controls are in place;

(ix) Provisions of civil service statutes and rules applicable to other state employees;

(x) RCW 43.19.710, 43.19.715, and 43.19.720 that require agencies to participate in the consolidated mail services;

(xi) Requirements for purchasing services from the state printer in RCW 43.78.030 and 43.78.100.

(b) A pilot agency may retain, beyond the fiscal biennium, up to fifty percent of savings resulting from operating efficiencies that are documented by the agency and verified by the director of financial management. A pilot agency shall deposit the savings in the efficiency incentive account, hereby established as a nonappropriated account in the custody of the state treasurer to be used by the agency during the project period solely for continued productivity or service delivery improvements.

(c) To improve operating efficiency and reduce the use of sick leave, overtime, and callback, a pilot agency may provide an incentive of twenty-five percent of the sick leave accrued and not used to employees whose sick leave usage for a fiscal year is no more sixteen hours. Incentives may be in the form of a bonus payment or the employee may convert the sick leave to use for planned annual leave, at the discretion of the agency director.

(d) The department of information services may make available information services to tribal organizations and the federal government.

(e) The department of information services may enter into strategic partnerships with nongovernmental organizations to advance the state's economic development, improve delivery of technology services and infrastructure, leverage public investments, and ensure success of state information technology application development projects, if competitive procurement practices are followed.

(f) The department of information services may be exempt from the agency rate plan provisions of RCW 43.105.052(3) if the department and the office of financial management mutually agree to any rate changes.

(g) Correctional industries of the department of corrections may expand its instate products and services to the private sector in areas not currently provided by Washington-based businesses.

(h) The department of corrections may continue expedited prison construction.

(2) During the pilot project the director of financial management may exempt a pilot agency from office of financial management policies and procedures as determined necessary for the successful implementation of the project.

(3) Documentation required of a pilot agency must be available upon request by the legislature, the director of financial management, or the efficiency commission. The director of financial management may establish conditions and requirements on pilot agency waivers and incentives to ensure responsible financial management.

NEW SECTION. Sec. 4. (1) The director of financial management shall cause to be conducted a study of the costs and benefits of the waivers and incentives used by the pilot agencies. The study shall include, but not be limited to: (a) An assessment of the impact of the incentives and waivers impact on efficiency, quality, and economy of services provided by the pilot agencies; and (b) an analysis and recommendations for continuing, expanding, or terminating the incentives and waivers.

(2) The director of financial management shall report the results of the study to the governor and the legislature no later than December 1, 1997.

NEW SECTION. Sec. 5. The efficiency commission may review organizational and personal incentive programs and activities in Washington state, including but not limited to agency-based programs, the teamwork incentive program, and the brainstorm program and evaluate the methods and programs for providing incentives in other states and in the private sector. The commission shall report its findings to the governor and the legislature by November 1, 1994.

NEW SECTION. Sec. 6. The efficiency commission shall evaluate requests by pilot agencies for additional modifications to legislative and administrative requirements or incentive systems identified during the pilot period, and the commission may make recommendations to the legislature for further modifications as deemed appropriate.

Sec. 7. RCW 39.04.220 and 1991 c 130 s 2 are each amended to read as follows:

As provided for in sections 1, 2, and 3 of this act:

(1) In addition to currently authorized methods of public works contracting, and in lieu of the requirements of RCW 39.04.010 and 39.04.020 through 39.04.060, capital projects funded for over ((~~ten~~)) three million dollars ((~~appropriated and~~)) authorized by the legislature for the department of corrections ((in the 1989‑91 biennium at the McNeil Island corrections center, the Clallam Bay corrections center, the construction of new correctional facilities under the authority of the secretary of corrections including drug camps; work camps; a new medium security prison and such other correctional)) to construct or repair facilities as may be authorized by the legislature ((~~during the biennium ending June 30, 1993,~~)) may be accomplished under contract using the ((~~general contractor/construction manager~~)) construction manager/general contractor method described in this section. For the purposes of this section, "((~~general contractor/construction manager~~)) construction manager/general contractor" means a firm with which the department of general administration with the concurrence of the department of corrections has selected and negotiated a maximum allowable construction cost to be guaranteed by the firm, after competitive selection through a formal advertisement, and competitive bids to provide services that may include life-cycle cost design considerations, value engineering, scheduling, cost estimating, constructability, alternative construction options for cost savings, and sequencing of work, and to act as the construction manager and general contractor during the construction phase. ((The department of general administration shall establish an independent oversight advisory committee with representatives of interest groups with an interest in this subject area, the department of corrections, and the private sector, to review selection and contracting procedures. The general contractor/construction manager method is limited to contracts signed before July 1, 1996.))

(2) Contracts for the services of a ((~~general contractor/construction manager~~)) construction manager/general contractor awarded under the authority of this section shall be awarded through a competitive process requiring the public solicitation of proposals for ((~~general contractor/construction manager~~)) construction manager/general contractor services. Minority and women enterprise total project goals shall be specified in the bid instructions to the ((~~general contractor/construction manager~~)) construction manager/general contractor finalists. The director of general administration with the concurrence of the department of corrections is authorized to include an incentive clause in any contract awarded under this section for savings of either time or cost or both from that originally negotiated. No incentives granted shall exceed five percent of the maximum allowable construction cost. The director of general administration or his or her designee with the concurrence of the department of corrections shall establish a committee to evaluate the proposals considering such factors as ability of professional personnel; past performance in negotiated and complex projects; ability to meet time and budget requirements; location; recent, current, and projected work loads of the firm; and the concept of their proposal. After the committee has selected the most qualified finalists, these finalists shall submit sealed bids for the percent fee, which is the percentage amount to be earned by the ((~~general contractor/construction manager~~)) construction manager/general contractor as overhead and profit, on the estimated maximum allowable construction cost and the fixed amount for the detailed specified general conditions work. The maximum allowable construction cost may be negotiated between the department of general administration with the concurrence of the department of corrections and the selected firm after the scope of the project is adequately determined to establish a guaranteed contract cost for which the ((~~general contractor/construction manager~~)) construction manager/general contractor will provide a performance and payment bond. The guaranteed contract cost includes the fixed amount for the detailed specified general conditions work, the negotiated maximum allowable construction cost, the percent fee on the negotiated maximum allowable construction cost, and sales tax. If the department of general administration with the concurrence of the department of corrections is unable to negotiate a satisfactory maximum allowable construction cost with the firm selected that the department of general administration with the concurrence of the department of corrections determines to be fair, reasonable, and within the available funds, negotiations with that firm shall be formally terminated and the department of general administration with the concurrence of the department of corrections shall negotiate with the next low bidder and continue until an agreement is reached or the process is terminated. If the maximum allowable construction cost varies more than fifteen percent from the bid estimated maximum allowable construction cost due to requested and approved changes in the scope by the state, the percent fee shall be renegotiated. All subcontract work shall be competitively bid with public bid openings. Specific goals for women and minority enterprises shall be specified ((~~in each subcontract bid package that responsive bidders will have to~~)) for the construction manager/general contractor firm that it shall meet or exceed. All subcontractors or construction managers/general contractors who bid work over one hundred thousand dollars shall post a bid bond, and the awarded subcontractor shall provide a performance and payment bond for their contract amount if required by the ((~~general contractor/construction manager~~)) construction manager/general contractor firm. The bidding of subcontract work by the ((~~general contractor/construction manager~~)) construction manager/general contractor or its subsidiaries is prohibited but it may negotiate with the low-responsive bidder in accordance with RCW 39.04.015 or rebid if authorized by the director of general administration with the concurrence of the department of corrections. In the event no bids are received, the bids received are over the state's budget amount, or the subcontractor fails to perform, the construction manager/general contractor shall self-perform the work.

(3) If the project is completed for less than the agreed upon maximum allowable construction cost, any savings not otherwise negotiated as part of an incentive clause shall accrue to the state. If the project is completed for more than the agreed upon maximum allowable construction cost, excepting increases due to any contract change orders approved by the state, the additional cost shall be the responsibility of the ((~~general contractor/construction manager~~)) construction manager/general contractor.

(4) The powers and authority conferred by this section shall be construed as in addition and supplemental to powers or authority conferred by any other law, and nothing contained herein shall be construed as limiting any other powers or authority of the department of general administration with the concurrence of the department of corrections.

Sec. 8. RCW 39.29.040 and 1987 c 414 s 7 are each amended to read as follows:

This chapter does not apply to:

(1) Contracts specifying a fee of less than two thousand five hundred dollars if the total of the contracts from that agency with the contractor within a fiscal year does not exceed two thousand five hundred dollars;

(2) Contracts awarded to companies that furnish a service where the tariff is established by the utilities and transportation commission or other public entity;

(3) Intergovernmental agreements awarded to any governmental entity, whether federal, state, or local and any department, division, or subdivision thereof;

(4) Contracts awarded for services to be performed for a standard fee, when the standard fee is established by the contracting agency or any other governmental entity and a like contract is available to all qualified applicants;

(5) Contracts for services that are necessary to the conduct of collaborative research if prior approval is granted by the funding source;

(6) Contracts for client services;

(7) Contracts for architectural and engineering services as defined in RCW 39.80.020, which shall be entered into under chapter 39.80 RCW; ((~~and~~))

(8) Contracts for the employment of expert witnesses for the purposes of litigation, except that such contracts shall be filed within the same time period as emergency contracts; and

(9) Contracts entered into by the department of corrections and the department of information services to the extent that these agencies may be exempt from this chapter under sections 1, 2, and 3 of this act, if competitive procurement practices are followed.

Sec. 9. RCW 41.04.340 and 1993 c 281 s 17 are each amended to read as follows:

(1) An attendance incentive program is established for all eligible employees. As used in this section the term "eligible employee" means any employee of the state, other than teaching and research faculty at the state and regional universities and The Evergreen State College, entitled to accumulate sick leave and for whom accurate sick leave records have been maintained. No employee may receive compensation under this section for any portion of sick leave accumulated at a rate in excess of one day per month. The state and regional universities and The Evergreen State College shall maintain complete and accurate sick leave records for all teaching and research faculty.

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

(3) As provided for in sections 1, 2, and 3 of this act, the department of corrections and the department of information services may provide an additional incentive of twenty-five percent of the sick leave accrued and not used to employees whose sick leave usage for a fiscal year is no more than sixteen hours. Incentives may be in the form of a bonus payment or the employee may convert the sick leave to use for planned annual leave and are at the discretion of the director.

(4) At the time of separation from state service due to retirement or death, an eligible employee or the employee's estate may elect to receive remuneration at a rate equal to one day's current monetary compensation of the employee for each four full days of accrued sick leave.

((~~(4)~~)) (5) Pursuant to this subsection, in lieu of cash remuneration the state may, with equivalent funds, provide eligible employees with a benefit plan providing for reimbursement of medical expenses. The committee for deferred compensation shall develop any benefit plan established under this subsection, but may offer and administer the plan only if (a) each eligible employee has the option of whether to receive cash remuneration or to have his or her employer transfer equivalent funds to the plan; and (b) the committee has received an opinion from the United States internal revenue service stating that participating employees, prior to the time of receiving reimbursement for expenses, will incur no United States income tax liability on the amount of the equivalent funds transferred to the plan.

((~~(5)~~)) (6) Remuneration or benefits received under this section shall not be included for the purpose of computing a retirement allowance under any public retirement system in this state.

((~~(6)~~)) (7) With the exception of subsection ((~~(4)~~)) (5) of this section, this section shall be administered, and rules shall be adopted to carry out its purposes, by the Washington personnel resources board for persons subject to chapter 41.06 RCW: PROVIDED, That determination of classes of eligible employees shall be subject to approval by the office of financial management.

((~~(7)~~)) (8) Should the legislature revoke any remuneration or benefits granted under this section, no affected employee shall be entitled thereafter to receive such benefits as a matter of contractual right.

Sec. 10. RCW 41.06.380 and 1979 ex.s. c 46 s 2 are each amended to read as follows:

Nothing contained in this chapter shall prohibit any department, as defined in RCW 41.06.020, from purchasing services by contract with individuals or business entities if such services were regularly purchased by valid contract by such department prior to April 23, 1979: PROVIDED, That no such contract may be executed or renewed if it would have the effect of terminating classified employees or classified employee positions existing at the time of the execution or renewal of the contract. The limitations on contracts for services contained in this section do not apply to contracts entered into by the department of corrections or the department of information services to the extent that these agencies may be exempt from these requirements under sections 1, 2, and 3 of this act.

NEW SECTION. Sec. 11. A new section is added to chapter 41.06 RCW to read as follows:

(1) As provided for in sections 1, 2, and 3 of this act, and based on policies established in consultation with their joint employee-management committees created by RCW 41.06.540, the department of corrections and the department of information services may purchase services by contract with individuals, businesses, or nonprofit entities.

(2) A pilot agency's decision to contract out must be in accordance with an agency analysis that determines that contracting out will result in:

(a) Cost savings; or

(b) Efficiencies; or

NEW SECTION. Sec. 12. A new section is added to chapter 41.06 RCW to read as follows:

(1) Notwithstanding any other provisions of this chapter, upon request, the director of personnel, after consultation with the department of corrections and the department of information services and employee organizations, may adopt rules consistent with the purposes of sections 1, 2, and 3 of this act regarding any personnel matter affecting employees of the department of corrections and the department of information services. The director's rules will take precedence over rules adopted by the personnel resources board and the Washington management services rules.

Sec. 13. RCW 43.01.090 and 1991 sp.s. c 31 s 10 are each amended to read as follows:

The director of general administration may assess a charge or rent against each state board, commission, agency, office, department, activity, or other occupant or user for payment of a proportionate share of costs for occupancy of buildings, structures, or facilities including but not limited to all costs of acquiring, constructing, operating, and maintaining such buildings, structures, or facilities and the repair, remodeling, or furnishing thereof and for the rendering of any service or the furnishing or providing of any supplies, equipment, or materials.

The director of general administration may recover the full costs including appropriate overhead charges of the foregoing by periodic billings as determined by the director including but not limited to transfers upon accounts and advancements into the general administration facilities and services revolving fund. Rates shall be established by the director of general administration after consultation with the director of financial management. The director of general administration may allot, provide, or furnish any of such facilities, structures, services, equipment, supplies, or materials to any other public service type occupant or user at such rates or charges as are equitable and reasonably reflect the actual costs of the services provided: PROVIDED, HOWEVER, That the legislature, its duly constituted committees, interim committees, and other committees shall be exempted from the provisions of this section. As provided for in sections 1, 2, and 3 of this act, the director of general administration shall adjust the charges or rents for the department of corrections and the department of information services to reflect changes in service levels provided to those departments.

Upon receipt of such bill, each entity, occupant, or user shall cause a warrant or check in the amount thereof to be drawn in favor of the department of general administration which shall be deposited in the state treasury to the credit of the general administration facilities and services revolving fund established in RCW 43.19.500 unless the director of financial management has authorized another method for payment of costs.

Sec. 14. RCW 43.19.190 and 1993 sp.s. c 10 s 2 and 1993 c 379 s 102 are each reenacted and amended to read as follows:

The director of general administration, through the state purchasing and material control director, shall:

(1) Establish and staff such administrative organizational units within the division of purchasing as may be necessary for effective administration of the provisions of RCW 43.19.190 through 43.19.1939;

(2) Purchase all material, supplies, services, and equipment needed for the support, maintenance, and use of all state institutions, colleges, community colleges, technical colleges, college districts, and universities, the offices of the elective state officers, the supreme court, the court of appeals, the administrative and other departments of state government, and the offices of all appointive officers of the state: PROVIDED, That the provisions of RCW 43.19.190 through 43.19.1937 do not apply in any manner to the operation of the state legislature except as requested by the legislature: PROVIDED, That any agency may purchase material, supplies, services, and equipment for which the agency has notified the purchasing and material control director that it is more cost-effective for the agency to make the purchase directly from the vendor: PROVIDED, That primary authority for the purchase of specialized equipment, instructional, and research material for their own use shall rest with the colleges, community colleges, and universities: PROVIDED FURTHER, That universities operating hospitals and the state purchasing and material control director, as the agent for state hospitals as defined in RCW 72.23.010, and for health care programs provided in state correctional institutions as defined in RCW 72.65.010(3) and veterans' institutions as defined in RCW 72.36.010 and 72.36.070, may make purchases for hospital operation by participating in contracts for materials, supplies, and equipment entered into by nonprofit cooperative hospital group purchasing organizations: PROVIDED FURTHER, That primary authority for the purchase of materials, supplies, and equipment for resale to other than public agencies shall rest with the state agency concerned: PROVIDED FURTHER, That authority to purchase services as included herein does not apply to personal services as defined in chapter 39.29 RCW, unless such organization specifically requests assistance from the division of purchasing in obtaining personal services and resources are available within the division to provide such assistance: PROVIDED FURTHER, That the authority for the purchase of insurance and bonds shall rest with the risk manager under RCW 43.19.1935: PROVIDED FURTHER, That, except for the authority of the risk manager to purchase insurance and bonds, the director is not required to provide purchasing services for institutions of higher education that choose to exercise independent purchasing authority under RCW 28B.10.029: PROVIDED FURTHER, That the provisions of this chapter relating to purchasing, material control, and central stores do not apply to the department of corrections and the department of information services to the extent that these agencies may be exempt from these requirements under sections 1, 2, and 3 of this act;

(3) Provide the required staff assistance for the state supply management advisory board through the division of purchasing;

(4) Have authority to delegate to state agencies authorization to purchase or sell, which authorization shall specify restrictions as to dollar amount or to specific types of material, equipment, services, and supplies: PROVIDED, That acceptance of the purchasing authorization by a state agency does not relieve such agency from conformance with other sections of RCW 43.19.190 through 43.19.1939, or from policies established by the director after consultation with the state supply management advisory board: PROVIDED FURTHER, That delegation of such authorization to a state agency, including an educational institution to which this section applies, to purchase or sell material, equipment, services, and supplies shall not be granted, or otherwise continued under a previous authorization, if such agency is not in substantial compliance with overall state purchasing and material control policies as established herein;

(5) Contract for the testing of material, supplies, and equipment with public and private agencies as necessary and advisable to protect the interests of the state;

(6) Prescribe the manner of inspecting all deliveries of supplies, materials, and equipment purchased through the division;

(7) Prescribe the manner in which supplies, materials, and equipment purchased through the division shall be delivered, stored, and distributed;

(8) Provide for the maintenance of a catalogue library, manufacturers' and wholesalers' lists, and current market information;

(9) Provide for a commodity classification system and may, in addition, provide for the adoption of standard specifications after receiving the recommendation of the supply management advisory board;

(10) Provide for the maintenance of inventory records of supplies, materials, and other property;

(11) Prepare rules and regulations governing the relationship and procedures between the division of purchasing and state agencies and vendors;

(12) Publish procedures and guidelines for compliance by all state agencies, including those educational institutions to which this section applies, which implement overall state purchasing and material control policies;

(13) Conduct periodic visits to state agencies, including those educational institutions to which this section applies, to determine if statutory provisions and supporting purchasing and material control policies are being fully implemented, and based upon such visits, take corrective action to achieve compliance with established purchasing and material control policies under existing statutes when required.

Sec. 15. RCW 43.19.715 and 1993 c 219 s 3 are each amended to read as follows:

The director shall establish a consolidated mail service to handle all incoming, outgoing, and internal mail in the 98504 zip code area or successor zip code areas for agencies in the Olympia, Tumwater, and Lacey area. The director may include additional geographic areas within the consolidated mail service, based upon his or her determination. The department shall also provide mail services to legislative and judicial agencies in the Olympia, Tumwater, and Lacey area upon request.

The director may bill state agencies and other entities periodically for mail services rendered.

This section does not apply to the department of corrections and the department of information services to the extent that these agencies may be exempt from these requirements under sections 1, 2, and 3 of this act.

Sec. 16. RCW 43.19.720 and 1993 c 219 s 5 are each amended to read as follows:

The department, in cooperation with the office of financial management, shall review current and prospective needs of state agencies for any equipment to process mail throughout state government. If after such consultation, the department should find that the economy, efficiency, or effectiveness of state government would be improved by such a transfer or other disposition, then the property shall be transferred or otherwise disposed.

After making such finding, the department shall direct the transfer of existing state property, facilities, and equipment pertaining to the consolidated mail service or United States postal service. Any dispute concerning the benefits in state governmental economy, efficiency, and effectiveness shall be resolved by the office of financial management.

Sec. 17. RCW 43.78.030 and 1993 c 379 s 104 are each amended to read as follows:

The public printer shall print and bind the session laws, the journals of the two houses of the legislature, all bills, resolutions, documents, and other printing and binding of either the senate or house, as the same may be ordered by the legislature; and such forms, blanks, record books, and printing and binding of every description as may be ordered by all state officers, boards, commissions, and institutions, and the supreme court, and the court of appeals and officers thereof, as the same may be ordered on requisition, from time to time, by the proper authorities. This section shall not apply to the printing of the supreme court and the court of appeals reports, to the printing of bond certificates or bond offering disclosure documents, or to any printing done or contracted for by institutions of higher education, the department of corrections, or the department of information services to the extent that these agencies may be exempt from these requirements under sections 1, 2, and 3 of this act: PROVIDED, That institutions of higher education, in consultation with the public printer, develop vendor selection procedures comparable to those used by the public printer for contracted printing jobs. Where any institution or institution of higher learning of the state is or may become equipped with facilities for doing such work, it may do any printing: (1) For itself, or (2) for any other state institution when such printing is done as part of a course of study relative to the profession of printer. Any printing and binding of whatever description as may be needed by any institution or agency of the state department of social and health services not at Olympia, or the supreme court or the court of appeals or any officer thereof, the estimated cost of which shall not exceed one thousand dollars, may be done by any private printing company in the general vicinity within the state of Washington so ordering, if in the judgment of the officer of the agency so ordering, the saving in time and processing justifies the award to such local private printing concern.

Beginning on July 1, 1989, and on July 1 of each succeeding odd-numbered year, the dollar limit specified in this section shall be adjusted as follows: The office of financial management shall calculate such limit by adjusting the previous biennium's limit by an appropriate federal inflationary index reflecting the rate of inflation for the previous biennium. Such amounts shall be rounded to the nearest fifty dollars.

Sec. 18. RCW 43.78.100 and 1993 c 379 s 106 are each amended to read as follows:

The public printer shall furnish all paper, stock, and binding materials required in all public work, and shall charge the same to the state, as it is actually used, at the actual price at which it was purchased plus five percent for waste, insurance, storage, and handling. This section does not apply to institutions of higher education, the department of corrections, or the department of information services, to the extent that the department of corrections and the department of information services may be exempt from this requirement under sections 1, 2, and 3 of this act.

Sec. 19. RCW 43.82.010 and 1990 c 47 s 1 are each amended to read as follows:

(1) The director of the department of general administration, on behalf of the agency involved, shall purchase, lease, rent, or otherwise acquire all real estate, improved or unimproved, as may be required by elected state officials, institutions, departments, commissions, boards, and other state agencies, or federal agencies where joint state and federal activities are undertaken and may grant easements and transfer, exchange, sell, lease, or sublease all or part of any surplus real estate for those state agencies which do not otherwise have the specific authority to dispose of real estate. This section does not transfer financial liability for the acquired property to the department of general administration.

(2) Except for real estate occupied by federal agencies, the director shall determine the location, size, and design of any real estate or improvements thereon acquired or held pursuant to subsection (1) of this section.

(3) The director is authorized to purchase, lease, rent, or otherwise acquire improved or unimproved real estate as owner or lessee and to lease or sublet all or a part of such real estate to state or federal agencies. The director shall charge each using agency its proportionate rental which shall include an amount sufficient to pay all costs, including, but not limited to, those for utilities, janitorial and accounting services, and sufficient to provide for contingencies; which shall not exceed five percent of the average annual rental, to meet unforeseen expenses incident to management of the real estate.

(4) If the director determines that it is necessary or advisable to undertake any work, construction, alteration, repair, or improvement on any real estate acquired pursuant to subsections (1) or (3) of this section, the director shall cause plans and specifications thereof and an estimate of the cost of such work to be made and filed in his office and the state agency benefiting thereby is hereby authorized to pay for such work out of any available funds: PROVIDED, That the cost of executing such work shall not exceed the sum of twenty-five thousand dollars. Work, construction, alteration, repair, or improvement in excess of twenty-five thousand dollars, other than that done by the owner of the property if other than the state, shall be performed in accordance with the public works law of this state.

(5) In order to obtain maximum utilization of space, the director shall make space utilization studies, and shall establish standards for use of space by state agencies.

(6) The director may construct new buildings on, or improve existing facilities, and furnish and equip, all real estate under his management.

(7) All conveyances and contracts to purchase, lease, rent, transfer, exchange, or sell real estate and to grant and accept easements shall be approved as to form by the attorney general, signed by the director or the director's designee, and recorded with the county auditor of the county in which the property is located.

(8) The director may delegate any or all of the functions specified in this section to any agency upon such terms and conditions as the director deems advisable.

(9) This section does not apply to the acquisition of real estate by:

(a) The state college and universities for research or experimental purposes;

(b) The state liquor control board for liquor stores and warehouses; ((~~and~~))

(c) The department of natural resources, the department of ((~~fisheries, the department of~~)) fish and wildlife, the department of transportation, and the state parks and recreation commission for purposes other than the leasing of offices, warehouses, and real estate for similar purposes; and

(d) The department of corrections and the department of information services to the extent that these agencies may be exempt from these requirements under sections 1, 2, and 3 of this act.

(10) Notwithstanding any provision in this chapter to the contrary, the department of general administration may negotiate ground leases for public lands on which property is to be acquired under a financing contract pursuant to chapter 39.94 RCW under terms approved by the state finance committee.

Sec. 20. RCW 43.88.030 and 1991 c 358 s 1 and 1991 c 284 s 1 are each reenacted and amended to read as follows:

(1) The director of financial management shall provide all agencies with a complete set of instructions for submitting biennial budget requests to the director at least three months before agency budget documents are due into the office of financial management. The director shall provide agencies that are required under RCW 44.40.070 to develop comprehensive six-year program and financial plans with a complete set of instructions for submitting these program and financial plans at the same time that instructions for submitting other budget requests are provided. The budget document or documents shall consist of the governor's budget message which shall be explanatory of the budget and shall contain an outline of the proposed financial policies of the state for the ensuing fiscal period, as well as an outline of the proposed six-year financial policies where applicable, and shall describe in connection therewith the important features of the budget. The message shall set forth the reasons for salient changes from the previous fiscal period in expenditure and revenue items and shall explain any major changes in financial policy. Attached to the budget message shall be such supporting schedules, exhibits and other explanatory material in respect to both current operations and capital improvements as the governor shall deem to be useful to the legislature. The budget document or documents shall set forth a proposal for expenditures in the ensuing fiscal period, or six-year period where applicable, based upon the estimated revenues as approved by the economic and revenue forecast council or upon the estimated revenues of the office of financial management for those funds, accounts, and sources for which the office of the economic and revenue forecast council does not prepare an official forecast, including those revenues anticipated to support the six-year programs and financial plans under RCW 44.40.070. In estimating revenues to support financial plans under RCW 44.40.070, the office of financial management shall rely on information and advice from the interagency revenue task force. Revenues shall be estimated for such fiscal period from the source and at the rates existing by law at the time of submission of the budget document, including the supplemental budgets submitted in the even-numbered years of a biennium. However, the estimated revenues for use in the governor's budget document may be adjusted to reflect budgetary revenue transfers and revenue estimates dependent upon budgetary assumptions of enrollments, workloads, and caseloads. All adjustments to the approved estimated revenues must be set forth in the budget document. The governor may additionally submit, as an appendix to each supplemental, biennial, or six-year agency budget or to the budget document or documents, a proposal for expenditures in the ensuing fiscal period from revenue sources derived from proposed changes in existing statutes.

Supplemental and biennial documents shall reflect a six-year expenditure plan consistent with estimated revenues from existing sources and at existing rates for those agencies required to submit six-year program and financial plans under RCW 44.40.070. Any additional revenue resulting from proposed changes to existing statutes shall be separately identified within the document as well as related expenditures for the six-year period.

The budget document or documents shall also contain:

(a) Revenues classified by fund and source for the immediately past fiscal period, those received or anticipated for the current fiscal period, those anticipated for the ensuing biennium, and those anticipated for the ensuing six-year period to support the six-year programs and financial plans required under RCW 44.40.070;

(b) The undesignated fund balance or deficit, by fund;

(c) Such additional information dealing with expenditures, revenues, workload, performance, and personnel as the legislature may direct by law or concurrent resolution;

(d) Such additional information dealing with revenues and expenditures as the governor shall deem pertinent and useful to the legislature;

(e) Tabulations showing expenditures classified by fund, function, activity, and object: PROVIDED, That the department of corrections and the department of information services may be exempt from developing budgets at the object and subobject level under sections 1, 2, and 3 of this act;

(f) A delineation of each agency's activities, including those activities funded from nonbudgeted, nonappropriated sources, including funds maintained outside the state treasury; and

(g) Identification of all proposed direct expenditures to implement the Puget Sound water quality plan under chapter 90.70 RCW, shown by agency and in total.

(2) The budget document or documents shall include detailed estimates of all anticipated revenues applicable to proposed operating or capital expenditures and shall also include all proposed operating or capital expenditures. The total of beginning undesignated fund balance and estimated revenues less working capital and other reserves shall equal or exceed the total of proposed applicable expenditures. The budget document or documents shall further include:

(a) Interest, amortization, and redemption charges on the state debt;

(b) Payments of all reliefs, judgments, and claims;

(d) Expenditures incident to the operation for each agency;

(e) Revenues derived from agency operations;

(f) Expenditures and revenues shall be given in comparative form showing those incurred or received for the immediately past fiscal period and those anticipated for the current biennium and next ensuing biennium, as well as those required to support the six-year programs and financial plans required under RCW 44.40.070;

(g) A showing and explanation of amounts of general fund and other funds obligations for debt service and any transfers of moneys that otherwise would have been available for appropriation;

(h) Common school expenditures on a fiscal-year basis;

(i) A showing, by agency, of the value and purpose of financing contracts for the lease/purchase or acquisition of personal or real property for the current and ensuing fiscal periods.

(3) A separate capital budget document or schedule shall be submitted that will contain the following:

(a) A capital plan consisting of proposed capital spending for at least four fiscal periods succeeding the next fiscal period;

(b) A capital program consisting of proposed capital projects for at least the two fiscal periods succeeding the next fiscal period;

(c) A capital plan consisting of proposed capital spending for at least four fiscal periods succeeding the next fiscal period;

(d) A statement of the reason or purpose for a project;

(e) Verification that a project is consistent with the provisions set forth in chapter 36.70A RCW;

(f) A statement about the proposed site, size, and estimated life of the project, if applicable;

(g) Estimated total project cost;

(h) Estimated total project cost for each phase of the project as defined by the office of financial management;

(i) Estimated ensuing biennium costs;

(j) Estimated costs beyond the ensuing biennium;

(k) Estimated construction start and completion dates;

(l) Source and type of funds proposed;

(m) Such other information bearing upon capital projects as the governor deems to be useful;

(n) Standard terms, including a standard and uniform definition of maintenance for all capital projects;

(o) Such other information as the legislature may direct by law or concurrent resolution.

For purposes of this subsection (3), the term "capital project" shall be defined subsequent to the analysis, findings, and recommendations of a joint committee comprised of representatives from the house capital appropriations committee, senate ways and means committee, legislative transportation committee, legislative evaluation and accountability program committee, and office of financial management.

(4) No change affecting the comparability of agency or program information relating to expenditures, revenues, workload, performance and personnel shall be made in the format of any budget document or report presented to the legislature under this section or RCW 43.88.160(1) relative to the format of the budget document or report which was presented to the previous regular session of the legislature during an odd-numbered year without prior legislative concurrence. Prior legislative concurrence shall consist of (a) a favorable majority vote on the proposal by the standing committees on ways and means of both houses if the legislature is in session or (b) a favorable majority vote on the proposal by members of the legislative evaluation and accountability program committee if the legislature is not in session.

Sec. 21. RCW 43.88.110 and 1991 sp.s. c 32 s 27 and 1991 c 358 s 2 are each reenacted and amended to read as follows:

This section sets forth the expenditure programs and the allotment and reserve procedures to be followed by the executive branch for public funds.

(1) Allotments of an appropriation for any fiscal period shall conform to the terms, limits, or conditions of the appropriation.

(2) The director of financial management shall provide all agencies with a complete set of operating and capital instructions for preparing a statement of proposed expenditures at least thirty days before the beginning of a fiscal period. The set of instructions need not include specific appropriation amounts for the agency.

(3) Within forty-five days after the beginning of the fiscal period or within forty-five days after the governor signs the omnibus biennial appropriations act, whichever is later, all agencies other than the department of corrections and the department of information services, which may be exempt from these requirements under sections 1, 2, and 3 of this act, shall submit to the governor a statement of proposed expenditures at such times and in such form as may be required by the governor.

(4) The office of financial management shall develop a method for monitoring capital appropriations and expenditures that will capture at least the following elements:

(a) Appropriations made for capital projects including transportation projects;

(b) Estimates of total project costs including past, current, ensuing, and future biennial costs;

(d) Comparisons of estimated construction start and completion dates with actual dates;

(e) Documentation of fund shifts between projects.

This data may be incorporated into the existing accounting system or into a separate project management system, as deemed appropriate by the office of financial management.

(5) If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050, the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods. Except for the legislative and judicial branches and other agencies headed by elective officials, the governor shall review the statement of proposed operating expenditures for reasonableness and conformance with legislative intent. Once the governor approves the statements of proposed operating expenditures, further revisions shall be made only at the beginning of the second fiscal year and must be initiated by the governor. However, changes in appropriation level authorized by the legislature, changes required by across-the-board reductions mandated by the governor, changes caused by executive increases to spending authority, and changes caused by executive decreases to spending authority for failure to comply with the provisions of chapter 36.70A RCW may require additional revisions. Revisions shall not be made retroactively. Revisions caused by executive increases to spending authority shall not be made after June 30, 1987. However, the governor may assign to a reserve status any portion of an agency appropriation withheld as part of across-the-board reductions made by the governor and any portion of an agency appropriation conditioned on a contingent event by the appropriations act. The governor may remove these amounts from reserve status if the across-the-board reductions are subsequently modified or if the contingent event occurs. The director of financial management shall enter approved statements of proposed expenditures into the state budgeting, accounting, and reporting system within forty-five days after receipt of the proposed statements from the agencies. If an agency or the director of financial management is unable to meet these requirements, the director of financial management shall provide a timely explanation in writing to the legislative fiscal committees.

(6) It is expressly provided that all agencies shall be required to maintain accounting records and to report thereon in the manner prescribed in this chapter and under the regulations issued pursuant to this chapter. Within ninety days of the end of the fiscal year, all agencies shall submit to the director of financial management their final adjustments to close their books for the fiscal year. Prior to submitting fiscal data, written or oral, to committees of the legislature, it is the responsibility of the agency submitting the data to reconcile it with the budget and accounting data reported by the agency to the director of financial management.

(7) The director of financial management shall monitor agency operating expenditures against the approved statement of proposed expenditures and shall provide the legislature with quarterly explanations of major variances.

(8) The director of financial management may exempt certain public funds from the allotment controls established under this chapter if it is not practical or necessary to allot the funds. Allotment control exemptions expire at the end of the fiscal biennium for which they are granted. The director of financial management shall report any exemptions granted under this subsection to the legislative fiscal committees.

Sec. 22. RCW 43.88.150 and 1991 c 284 s 3 are each amended to read as follows:

(1) For those agencies that make expenditures from both appropriated and nonappropriated funds for the same purpose, the governor shall direct such agencies to charge their expenditures in such ratio, as between appropriated and nonappropriated funds, as will conserve appropriated funds.

(2) Unless otherwise provided by law, if state moneys are appropriated for a capital project and matching funds or other contributions are required as a condition of the receipt of the state moneys, the state moneys shall be disbursed in proportion to and only to the extent that the matching funds or other contributions have been received and are available for expenditure.

(3) The office of financial management shall adopt guidelines for the implementation of this section. The guidelines may account for federal matching requirements or other requirements to spend other moneys in a particular manner.

(4) The department of corrections and the department of information services may be exempted from this section as provided in sections 1, 2, and 3 of this act.

Sec. 23. RCW 43.88.160 and 1993 c 500 s 7, 1993 c 406 s 4, and 1993 c 194 s 6 are each reenacted and amended to read as follows:

This section sets forth the major fiscal duties and responsibilities of officers and agencies of the executive branch. The regulations issued by the governor pursuant to this chapter shall provide for a comprehensive, orderly basis for fiscal management and control, including efficient accounting and reporting therefor, for the executive branch of the state government and may include, in addition, such requirements as will generally promote more efficient public management in the state.

(1) Governor; director of financial management. The governor, through the director of financial management, shall devise and supervise a modern and complete accounting system for each agency to the end that all revenues, expenditures, receipts, disbursements, resources, and obligations of the state shall be properly and systematically accounted for. The accounting system shall include the development of accurate, timely records and reports of all financial affairs of the state. The system shall also provide for central accounts in the office of financial management at the level of detail deemed necessary by the director to perform central financial management. The director of financial management shall adopt and periodically update an accounting procedures manual. Any agency maintaining its own accounting and reporting system shall comply with the updated accounting procedures manual and the rules of the director adopted under this chapter. An agency may receive a waiver from complying with this requirement if the waiver is approved by the director. Waivers expire at the end of the fiscal biennium for which they are granted. The director shall forward notice of waivers granted to the appropriate legislative fiscal committees. The director of financial management may require such financial, statistical, and other reports as the director deems necessary from all agencies covering any period.

(2) The director of financial management is responsible for quarterly reporting of primary operating budget drivers such as applicable workloads, caseload estimates, and appropriate unit cost data. These reports shall be transmitted to the legislative fiscal committees or by electronic means to the legislative evaluation and accountability program committee. Quarterly reports shall include actual monthly data and the variance between actual and estimated data to date. The reports shall also include estimates of these items for the remainder of the budget period.

(3) The director of financial management shall report at least annually to the appropriate legislative committees regarding the status of all appropriated capital projects, including transportation projects, showing significant cost overruns or underruns. If funds are shifted from one project to another, the office of financial management shall also reflect this in the annual variance report. Once a project is complete, the report shall provide a final summary showing estimated start and completion dates of each project phase compared to actual dates, estimated costs of each project phase compared to actual costs, and whether or not there are any outstanding liabilities or unsettled claims at the time of completion.

(4) In addition, the director of financial management, as agent of the governor, shall:

(a) Develop and maintain a system of internal controls and internal audits comprising methods and procedures to be adopted by each agency that will safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies for accounting and financial controls. The system developed by the director shall include criteria for determining the scope and comprehensiveness of internal controls required by classes of agencies, depending on the level of resources at risk.

Each agency head or authorized designee shall be assigned the responsibility and authority for establishing and maintaining internal audits following the standards of internal auditing of the institute of internal auditors;

(b) Make surveys and analyses of agencies with the object of determining better methods and increased effectiveness in the use of manpower and materials; and the director shall authorize expenditures for employee training to the end that the state may benefit from training facilities made available to state employees;

(d) Report to the governor with regard to duplication of effort or lack of coordination among agencies;

(e) Review any pay and classification plans, and changes thereunder, developed by any agency other than the department of corrections or the department of information services, which may be exempt from this requirement under sections 1, 2, and 3 of this act, for their fiscal impact: PROVIDED, That none of the provisions of this subsection shall affect merit systems of personnel management now existing or hereafter established by statute relating to the fixing of qualifications requirements for recruitment, appointment, or promotion of employees of any agency. The director shall advise and confer with agencies including appropriate standing committees of the legislature as may be designated by the speaker of the house and the president of the senate regarding the fiscal impact of such plans and may amend or alter said plans, except that for the following agencies no amendment or alteration of said plans may be made without the approval of the agency concerned: Agencies headed by elective officials;

(f) Fix the number and classes of positions or authorized ((~~man~~)) staff years of employment for each agency and during the fiscal period amend the determinations previously fixed by the director except that the director shall not be empowered to fix said number or said classes for the following: Agencies headed by elective officials, and the department of corrections and the department of information services, which may be exempt from this requirement under sections 1, 2, and 3 of this act;

(g) Provide for transfers and repayments between the budget stabilization account and the general fund as directed by appropriation and RCW 43.88.525 through 43.88.540;

(h) Adopt rules to effectuate provisions contained in (a) through (g) of this subsection. However, the director of financial management may waive such rules for the department of corrections and the department of information services under sections 1, 2, and 3 of this act.

(5) The treasurer shall:

(a) Receive, keep, and disburse all public funds of the state not expressly required by law to be received, kept, and disbursed by some other persons: PROVIDED, That this subsection shall not apply to those public funds of the institutions of higher learning which are not subject to appropriation;

(b) Receive, disburse, or transfer public funds under the treasurer's supervision or custody;

(c) Keep a correct and current account of all moneys received and disbursed by the treasurer, classified by fund or account;

(d) Coordinate agencies' acceptance and use of credit cards and other payment methods, if the agencies have received authorization under RCW 43.41.180;

(e) Perform such other duties as may be required by law or by regulations issued pursuant to this law.

It shall be unlawful for the treasurer to disburse public funds in the treasury except upon forms or by alternative means duly prescribed by the director of financial management. These forms or alternative means shall provide for authentication and certification by the agency head or the agency head's designee that the services have been rendered or the materials have been furnished; or, in the case of loans or grants, that the loans or grants are authorized by law; or, in the case of payments for periodic maintenance services to be performed on state owned equipment, that a written contract for such periodic maintenance services is currently in effect and copies thereof are on file with the office of financial management; and the treasurer shall not be liable under the treasurer's surety bond for erroneous or improper payments so made. When services are lawfully paid for in advance of full performance by any private individual or business entity other than as provided for by RCW 42.24.035, such individual or entity other than central stores rendering such services shall make a cash deposit or furnish surety bond coverage to the state as shall be fixed in an amount by law, or if not fixed by law, then in such amounts as shall be fixed by the director of the department of general administration but in no case shall such required cash deposit or surety bond be less than an amount which will fully indemnify the state against any and all losses on account of breach of promise to fully perform such services. No payments shall be made in advance for any equipment maintenance services to be performed more than three months after such payment. Any such bond so furnished shall be conditioned that the person, firm or corporation receiving the advance payment will apply it toward performance of the contract. The responsibility for recovery of erroneous or improper payments made under this section shall lie with the agency head or the agency head's designee in accordance with regulations issued pursuant to this chapter. Nothing in this section shall be construed to permit a public body to advance funds to a private service provider pursuant to a grant or loan before services have been rendered or material furnished.

(6) The state auditor shall:

(a) Report to the legislature the results of current post audits that have been made of the financial transactions of each agency; to this end the auditor may, in the auditor's discretion, examine the books and accounts of any agency, official or employee charged with the receipt, custody or safekeeping of public funds. Where feasible in conducting examinations, the auditor shall utilize data and findings from the internal control system prescribed by the office of financial management. The current post audit of each agency may include a section on recommendations to the legislature as provided in (c) of this subsection.

(b) Give information to the legislature, whenever required, upon any subject relating to the financial affairs of the state.

(c) Make the auditor's official report on or before the thirty-first of December which precedes the meeting of the legislature. The report shall be for the last complete fiscal period and shall include determinations as to whether agencies, in making expenditures, complied with the laws of this state. The state auditor is authorized to perform or participate in performance audits only as expressly authorized by the legislature in the omnibus biennial appropriations acts. A performance audit for the purpose of this section is the examination of the effectiveness of the administration, its efficiency, and its adequacy in terms of the programs of departments or agencies as previously approved by the legislature. The state auditor, upon completing an audit for legal and financial compliance under chapter 43.09 RCW, may report to the legislative budget committee or other appropriate committees of the legislature, in a manner prescribed by the legislative budget committee, on facts relating to the management or performance of governmental programs where such facts are discovered incidental to the legal and financial audit. The auditor may make such a report to a legislative committee only if the auditor has determined that the agency has been given an opportunity and has failed to resolve the management or performance issues raised by the auditor. If the auditor makes a report to a legislative committee, the agency may submit to the committee a response to the report. This subsection (6) shall not be construed to authorize the auditor to allocate other than de minimis resources to performance audits except as expressly authorized in the appropriations acts.

(d) Be empowered to take exception to specific expenditures that have been incurred by any agency or to take exception to other practices related in any way to the agency's financial transactions and to cause such exceptions to be made a matter of public record, including disclosure to the agency concerned and to the director of financial management. It shall be the duty of the director of financial management to cause corrective action to be taken promptly, such action to include, as appropriate, the withholding of funds as provided in RCW 43.88.110.

(e) Promptly report any irregularities to the attorney general.

(f) Investigate improper governmental activity under chapter 42.40 RCW.

(7) The legislative budget committee may:

(a) Make post audits of the financial transactions of any agency and management surveys and program reviews as provided for in RCW 44.28.085 as well as performance audits and program evaluations. To this end the committee may in its discretion examine the books, accounts, and other records of any agency, official, or employee.

(b) Give information to the legislature or any legislative committee whenever required upon any subject relating to the performance and management of state agencies.

(i) Determinations as to the extent to which agencies in making expenditures have complied with the will of the legislature and in this connection, may take exception to specific expenditures or financial practices of any agencies; and

(ii) Such plans as it deems expedient for the support of the state's credit, for lessening expenditures, for promoting frugality and economy in agency affairs and generally for an improved level of fiscal management.

Sec. 24. RCW 43.88.180 and 1973 1st ex.s. c 100 s 8 are each amended to read as follows:

Appropriations shall not be required for refunds, as provided in RCW 43.88.170, nor in the case of payments other than for administrative expenses or capital improvements to be made from trust funds specifically created by law to discharge awards, claims, annuities and other liabilities of the state. Said trust funds shall include, but shall not be limited to, the accident fund, medical aid fund, retirement system fund, Washington state patrol retirement fund ((~~and~~)), unemployment trust fund, and the efficiency incentive account established on behalf of the department of information services and the department of corrections under section 3 of this act. Appropriations may be required in the case of public service enterprises defined for the purposes of this section as proprietary functions conducted by an agency of the state. An appropriation may be required to permit payment of obligations by revolving funds, as provided in RCW 43.88.190.

Sec. 25. RCW 43.105.041 and 1990 c 208 s 6 are each amended to read as follows:

The board shall have the following powers and duties related to information services:

(1) To develop standards governing the acquisition and disposition of equipment, proprietary software and purchased services, and confidentiality of computerized data;

(2) To purchase, lease, rent, or otherwise acquire, dispose of, and maintain equipment, proprietary software, and purchased services, or to delegate to other agencies and institutions of state government, under appropriate standards, the authority to purchase, lease, rent, or otherwise acquire, dispose of, and maintain equipment, proprietary software, and purchased services: PROVIDED, That, agencies and institutions of state government are expressly prohibited from acquiring or disposing of equipment, proprietary software, and purchased services without such delegation of authority. The acquisition and disposition of equipment, proprietary software, and purchased services is exempt from RCW 43.19.1919 and, as provided in RCW 43.19.1901, from the provisions of RCW 43.19.190 through 43.19.200. This subsection does not apply to the legislative branch. This subsection does not apply to the department of corrections and the department of information services to the extent that the department of corrections and the department of information services may be exempt from these requirements under sections 1, 2, and 3 of this act and that architectural and other standards identified by the board are met and competitive procurement practices are followed;

(3) To develop state-wide or interagency technical policies, standards, and procedures;

(4) To assure the cost-effective development and incremental implementation of a state-wide video telecommunications system to serve: Public schools; educational service districts; vocational-technical institutes; community colleges; colleges and universities; state and local government; and the general public through public affairs programming;

(5) To provide direction concerning strategic planning goals and objectives for the state. The board shall seek input from the legislature and the judiciary;

(6) To develop and implement a process for the resolution of appeals by:

(a) Vendors concerning the conduct of an acquisition process by an agency or the department; or

(b) A customer agency concerning the provision of services by the department or by other state agency providers;

(c) As provided for in sections 1, 2, and 3 of this act, this subsection (6) does not apply to the department of corrections or the department of information services if the pilot agencies and the office of financial management mutually agree to an alternate appeals process;

(7) To establish policies for the periodic review by the department of agency performance which may include but are not limited to analysis of:

(a) Planning, management, control, and use of information services;

(b) Training and education; and

(8) To set its meeting schedules and convene at scheduled times, or meet at the request of a majority of its members, the chair, or the director; and

(9) To review and approve that portion of the department's budget requests that provides for support to the board.

Sec. 26. RCW 43.105.052 and 1993 c 281 s 53 are each amended to read as follows:

The department shall:

(1) Perform all duties and responsibilities the board delegates to the department, including but not limited to:

(a) The review of agency acquisition plans and requests; and

(b) Implementation of state-wide and interagency policies, standards, and guidelines;

(2) Make available information services to state agencies and local governments on a full cost-recovery basis. As provided for in sections 1, 2, and 3 of this act, information services may also be made available to tribal organizations and the federal government. These services may include, but are not limited to:

(a) Telecommunications services for voice, data, and video;

(b) Mainframe computing services;

(d) Equipment acquisition assistance, including leasing, brokering, and establishing master contracts;

(e) Facilities management services for information technology equipment, equipment repair, and maintenance service;

(f) Negotiation with local cable companies and local governments to provide for connection to local cable services to allow for access to these public and educational channels in the state;

(g) Office automation services;

(h) System development services; and

(i) Training.

These services are for discretionary use by customers and customers may elect other alternatives for service if those alternatives are more cost-effective or provide better service. Agencies may be required to use the backbone network portions of the telecommunications services during an initial start-up period not to exceed three years;

(3) Establish rates and fees for services provided by the department to assure that the services component of the department is self-supporting. A billing rate plan shall be developed for a two-year period to coincide with the budgeting process((. The rate plan shall be subject to review at least annually by the customer oversight committees. The rate plan shall show the proposed rates by each cost center and will show the components of the rate structure as mutually determined by the department and the customer oversight committees. The same rate structure will apply to all user agencies of each cost center. The rate plan and any adjustments to rates shall be approved by the office of financial management. The services component shall not subsidize the operations of the planning component)) and must be mutually agreed to by the department of information services and the office of financial management as provided for in sections 1, 2, and 3 of this act;

(4) With the advice of the information services board and agencies, develop a state strategic information technology plan and performance reports as required under RCW 43.105.160;

(5) Develop plans for the department's achievement of state-wide goals and objectives set forth in the state strategic information technology plan required under RCW 43.105.160. These plans shall address such services as telecommunications, central and distributed computing, local area networks, office automation, and end user computing. The department shall seek the advice of customer oversight committees and the board in the development of these plans;

(6) Under direction of the information services board and in collaboration with the department of personnel, and other agencies as may be appropriate, develop training plans and coordinate training programs that are responsive to the needs of agencies;

(7) Identify opportunities for the effective use of information services and coordinate appropriate responses to those opportunities;

(8) Assess agencies' projects, acquisitions, plans, or overall information processing performance as requested by the board, agencies, the director of financial management, or the legislature. Agencies may be required to reimburse the department for agency-requested reviews;

(9) Develop planning, budgeting, and expenditure reporting requirements, in conjunction with the office of financial management, for agencies to follow;

(10) Assist the office of financial management with budgetary and policy review of agency plans for information services;

(11) Provide staff support from the planning component to the board for:

(a) Meeting preparation, notices, and minutes;

(b) Promulgation of policies, standards, and guidelines adopted by the board;

(d) Conducting reviews and assessments as directed by the board;

(12) Be the lead agency in coordinating video telecommunications services for all state agencies and develop, pursuant to board policies, standards and common specifications for leased and purchased telecommunications equipment. The department shall not evaluate the merits of school curriculum, higher education course offerings, or other education and training programs proposed for transmission and/or reception using video telecommunications resources. Nothing in this section shall abrogate or abridge the legal responsibilities of licensees of telecommunications facilities as licensed by the federal communication commission on March 27, 1990; and

(13) Perform all other matters and things necessary to carry out the purposes and provisions of this chapter.

As provided in sections 1, 2, and 3 of this act, the department may enter into strategic partnerships with nongovernmental organizations to advance the state's economic development, improve delivery of technology services and infrastructure, leverage public investments, and ensure success of state information technology development projects if the department adheres to competitive acquisition requirements that have been mutually agreed to by the department and the office of financial management.

Sec. 27. RCW 72.09.100 and 1992 c 123 s 1 are each amended to read as follows:

It is the intent of the legislature to vest in the department the power to provide for a comprehensive inmate work program and to remove statutory and other restrictions which have limited work programs in the past. For purposes of establishing such a comprehensive program, the legislature recommends that the department consider adopting any or all, or any variation of, the following classes of work programs:

(1) CLASS I: FREE VENTURE INDUSTRIES. The employer model industries in this class shall be operated and managed in total or in part by any profit or nonprofit organization pursuant to an agreement between the organization and the department. The organization shall produce goods or services for sale to both the public and private sector.

The customer model industries in this class shall be operated and managed by the department to provide Washington state manufacturers or businesses with products or services currently produced or provided by out-of-state or foreign suppliers. The correctional industries board of directors shall review these proposed industries before the department contracts to provide such products or services. The review shall include an analysis of the potential impact of the proposed products and services on the Washington state business community and labor market.

The department of corrections shall supply appropriate security and custody services without charge to the participating firms.

Inmates who work in free venture industries shall do so at their own choice. They shall be paid a wage comparable to the wage paid for work of a similar nature in the locality in which the industry is located, as determined by the director of correctional industries. If the director cannot reasonably determine the comparable wage, then the pay shall not be less than the federal minimum wage.

(2) CLASS II: TAX REDUCTION INDUSTRIES. Industries in this class shall be state-owned and operated enterprises designed to reduce the costs for goods and services for tax-supported agencies and for nonprofit organizations. The industries selected for development within this class shall, as much as possible, match the available pool of inmate work skills and aptitudes with the work opportunities in the free community. The industries shall be closely patterned after private sector industries but with the objective of reducing public support costs rather than making a profit. The products and services of this industry, including purchased products and services necessary for a complete product line, may be sold to public agencies, to nonprofit organizations, and to private ((~~contractors when the goods purchased will be ultimately used by a public agency or a nonprofit organization~~)) sector companies if those products and services are not currently manufactured by or obtained from a Washington-based business as provided in sections 1, 2, and 3 of this act. Clothing manufactured by an industry in this class may be donated to nonprofit organizations that provide clothing free of charge to low-income persons. Correctional industries products and services shall be reviewed by the correctional industries board of directors before offering such products and services for sale to private contractors. The board of directors shall conduct a yearly marketing review of the products and services offered under this subsection. Such review shall include an analysis of the potential impact of the proposed products and services on the Washington state business community. To avoid waste or spoilage and consequent loss to the state, when there is no public sector market for such goods, byproducts and surpluses of timber, agricultural, and animal husbandry enterprises may be sold to private persons, at private sale. Surplus byproducts and surpluses of timber, agricultural and animal husbandry enterprises that cannot be sold to public agencies or to private persons may be donated to nonprofit organizations. All sales of surplus products shall be carried out in accordance with rules prescribed by the secretary.

Security and custody services shall be provided without charge by the department of corrections.

Inmates working in this class of industries shall do so at their own choice and shall be paid for their work on a gratuity scale which shall not exceed the wage paid for work of a similar nature in the locality in which the industry is located and which is approved by the director of correctional industries.

(3) CLASS III: INSTITUTIONAL SUPPORT INDUSTRIES. Industries in this class shall be operated by the department of corrections. They shall be designed and managed to accomplish the following objectives:

(a) Whenever possible, to provide basic work training and experience so that the inmate will be able to qualify for better work both within correctional industries and the free community. It is not intended that an inmate's work within this class of industries should be his or her final and total work experience as an inmate.

(b) Whenever possible, to provide forty hours of work or work training per week.

Supervising, management, and custody staff shall be employees of the department.

All able and eligible inmates who are assigned work and who are not working in other classes of industries shall work in this class.

Except for inmates who work in work training programs, inmates in this class shall be paid for their work in accordance with an inmate gratuity scale. The scale shall be adopted by the secretary of corrections.

(4) CLASS IV: COMMUNITY WORK INDUSTRIES. Industries in this class shall be operated by the department of corrections. They shall be designed and managed to provide services in the inmate's resident community at a reduced cost. The services shall be provided to public agencies, to persons who are poor or infirm, or to nonprofit organizations.

Inmates in this program shall reside in facilities owned by, contracted for, or licensed by the department of corrections. A unit of local government shall provide work supervision services without charge to the state and shall pay the inmate's wage.

The department of corrections shall reimburse participating units of local government for liability and workers compensation insurance costs.

Inmates who work in this class of industries shall do so at their own choice and shall receive a gratuity which shall not exceed the wage paid for work of a similar nature in the locality in which the industry is located.

(5) CLASS V: COMMUNITY SERVICE PROGRAMS. Programs in this class shall be subject to supervision by the department of corrections. The purpose of this class of industries is to enable an offender, placed on community supervision, to work off all or part of a community service order as ordered by the sentencing court.

Employment shall be in a community service program operated by the state, local units of government, or a nonprofit agency.

To the extent that funds are specifically made available for such purposes, the department of corrections shall reimburse nonprofit agencies for workers compensation insurance costs.

NEW SECTION. Sec. 28. This act takes effect July 1, 1994.

NEW SECTION. Sec. 29. The following acts or parts of acts are each repealed, effective July 1, 1997:

(1) 1994 c -- s 1 (section 1 of this act);

(2) 1994 c -- s 2 (section 2 of this act);

(3) 1994 c -- s 3 (section 3 of this act);

(4) 1994 c -- s 5 (section 5 of this act);

(5) 1994 c -- s 6 (section 6 of this act);

(6) 1994 c -- s 11 (section 11 of this act); and

(7) 1994 c -- s 12 (section 12 of this act).

NEW SECTION. Sec. 30. 1994 c -- s 4 (section 4 of this act) is repealed, effective December 1, 1997.

NEW SECTION. Sec. 31. The amendments to RCW 39.04.220, 39.29.040, 41.04.340, 41.06.380, 43.01.090, 43.19.190, 43.19.715, 43.19.720, 43.78.030, 43.78.100, 43.82.010, 43.88.030, 43.88.110, 43.88.150, 43.88.160, 43.88.180, 43.105.041, 43.105.052, and 72.09.100 by sections 7 through 10 and 13 through 27 of this act, respectively, each expire July 1, 1997, and those sections will revert to their wording as of June 30, 1994, subject to any other amendments.