S-4073

AN ACT Relating to the equal access to justice act; amending RCW 4.84.340, 4.84.350, and 4.84.360; and adding new sections to chapter 4.84 RCW.

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

Sec. 1. RCW 4.84.340 and 1995 c 403 s 902 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 4.84.340 through 4.84.360.

(1) "Adjudicative proceeding" means an adjudicative proceeding as defined in RCW 34.05.010 and an administrative review pursuant to RCW 34.05.464. RCW 4.84.340 through 4.84.360 and sections 4 and 5 of this act apply only to the following adjudicative proceedings:

(a) Cases conducted for the department of social and health services, but excluding the division of child support and the division of juvenile rehabilitation;

(b) Licensing cases conducted for the liquor control board;

(c) Business and professional licensing cases for the department of licensing, but excluding motor vehicle franchise cases pursuant to chapter 46.96 RCW;

(d) Business and professional licensing cases for the department of labor and industries;

(e) Employer assessment and penalty cases conducted by the board of industrial insurance appeals pursuant to chapters 49.17, 51.48, and 51.52 RCW for the department of labor and industries, except for redetermination or reconsideration proceedings conducted by the department; and

(f) Employer assessment and penalty cases conducted pursuant to chapters 50.24 and 50.29 RCW for the employment security department.

(2) "Administrative review" means an adjudicative proceeding pursuant to RCW 34.05.464.

(3) "Administrative tribunal" means an independent agency that conducts adjudicative proceedings, as defined in RCW 34.05.010, as its sole or principal duty, to: (a) Review decisions of another agency or governmental unit; or (b) resolve disputes in which the tribunal is not a party.

(4) "Agency" means any state board, commission, department, institution of higher education, or officer, authorized by law to make rules or to conduct adjudicative proceedings, except those in the legislative or judicial branches, the governor, or the attorney general except to the extent otherwise required by law.

((~~(2)~~)) (5) "Agency action" means agency action as defined by chapter 34.05 RCW.

((~~(3)~~)) (6) "Fees and other expenses" includes the reasonable expenses of expert witnesses, the reasonable cost of a study, analysis, engineering report, test, or project that is found by the court, presiding officer, or reviewing officer to be necessary for the preparation of the party's case, and reasonable attorneys' fees. Reasonable attorneys' fees shall be based on the prevailing market rates for the kind and quality of services furnished, except that (a) no expert witness shall be compensated at a rate in excess of the highest rates of compensation for expert witnesses paid by the state of Washington, and (b) attorneys' fees shall not be awarded in excess of one hundred fifty dollars per hour unless the court, presiding officer, or reviewing officer determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.

((~~(4)~~)) (7) "Judicial review" means a judicial review as defined by chapter 34.05 RCW.

(8) "Presiding officer" means a presiding officer pursuant to RCW 34.05.425.

(9) "Qualified administrative party" means (a) an individual whose net worth did not exceed two hundred fifty thousand dollars at the time the initial petition for an adjudicatory proceeding was filed, or (b) a sole owner of an unincorporated business, or a partnership, corporation, association, or organization whose net worth did not exceed one million two hundred fifty thousand dollars at the time the initial petition for an adjudicatory proceeding was filed, except that an organization described in section 501(c)(3) of the federal internal revenue code of 1954 as exempt from taxation under section 501(a) of the code and a cooperative association as defined in section 15(a) of the agricultural marketing act (12 U.S.C. 1141J(a)), may be a party regardless of the net worth of such organization or cooperative association.

((~~(5)~~)) (10) "Qualified judicial party" means (a) an individual whose net worth did not exceed one million dollars at the time the initial petition for judicial review was filed, or (b) a sole owner of an unincorporated business, or a partnership, corporation, association, or organization whose net worth did not exceed five million dollars at the time the initial petition for judicial review was filed, except that an organization described in section 501(c)(3) of the federal internal revenue code of 1954 as exempt from taxation under section 501(a) of the code and a cooperative association as defined in section 15(a) of the agricultural marketing act (12 U.S.C. 1141J(a)), may be a party regardless of the net worth of such organization or cooperative association.

(11) "Qualified party" means a qualified judicial party or a qualified administrative party.

(12) "Reviewing officer" means a reviewing officer pursuant to RCW 34.05.464.

Sec. 2. RCW 4.84.350 and 1995 c 403 s 903 are each amended to read as follows:

(1) Except as otherwise specifically provided by statute, a court shall award a qualified judicial party that prevails in a judicial review of an agency action and a presiding officer or reviewing officer shall award a qualified administrative party that prevails in an adjudicative proceeding challenging an agency action, fees and other expenses, including reasonable attorneys' fees, unless the court, presiding officer, or reviewing officer finds that the agency action was substantially justified or that circumstances make an award unjust. A qualified party shall be considered to have prevailed if the qualified party obtained relief on a significant issue that achieves some benefit that the qualified party sought.

(2) The amount awarded a qualified party under subsection (1) of this section shall not exceed twenty-five thousand dollars for the total request for the combined proceedings, administrative hearing, administrative review, or superior court proceedings. Subsection (1) of this section shall not apply unless all parties challenging the agency action are qualified parties. If two or more qualified parties join in an action, the award in total shall not exceed twenty-five thousand dollars. The court, presiding officer, or reviewing officer, in its discretion, may reduce the amount to be awarded pursuant to subsection (1) of this section, or deny any award, to the extent that a qualified party during the course of the proceedings engaged in conduct that unduly or unreasonably protracted the final resolution of the matter in controversy.

(3) The chief administrative law judge, agencies whose actions are subject to an award of fees and other expenses, and the board of industrial insurance appeals are authorized to adopt rules to implement RCW 4.84.340 through 4.84.360 and sections 4 and 5 of this act. The rules of the chief administrative law judge shall be adopted as part of the model rules pursuant to RCW 34.05.250. These rules may include reasonable requirements for notices of appearances by authorized representatives, requirements for notices of intent to seek fees pursuant to this section, and a schedule for hours, rates, or limitations on amounts of fees and other expenses presumed reasonable for the type of adjudicative proceeding. In addition, rules may set a maximum total amount including all fees and expenses for specific types of adjudicative proceedings.

Sec. 3. RCW 4.84.360 and 1995 c 403 s 904 are each amended to read as follows:

Fees and other expenses awarded under RCW 4.84.340 and 4.84.350 shall be paid within sixty days after an order becomes final by the agency over which the party prevails from operating funds appropriated to the agency ((~~within sixty days~~)) for administrative purposes. Agencies paying fees and other expenses pursuant to RCW 4.84.340 and 4.84.350 shall report all payments to the office of financial management within five days of paying the fees and other expenses. Fees and other expenses awarded by the court, presiding officer, or reviewing officer shall be subject to the provisions of chapter 39.76 RCW ((~~and shall be deemed payable on the date the court announces the award~~)).

NEW SECTION. Sec. 4. A new section is added to chapter 4.84 RCW to read as follows:

When an agency has made an offer to participate in an alternative dispute resolution process, the appellant must participate in good faith or be precluded from applying for an award of attorneys' fees or expenses pursuant to RCW 4.84.340 through 4.84.360 and sections 4 and 5 of this act.

NEW SECTION. Sec. 5. A new section is added to chapter 4.84 RCW to read as follows:

Notwithstanding the provisions of RCW 4.84.350, no fees or other expenses shall be awarded against an administrative tribunal for actions taken solely as an adjudicative body.