"NEW SECTION.  Sec. 1   A new section is added to chapter 51.14 RCW to read as follows:
     The office of the ombudsman for workers of industrial insurance self-insured employers is created. The ombudsman shall be appointed by the governor and report directly to the director of the department. The office of the ombudsman may be openly and competitively contracted by the governor in accordance with chapter 39.29 RCW but shall not be physically housed within the industrial insurance division.

NEW SECTION.  Sec. 2   A new section is added to chapter 51.14 RCW to read as follows:
     The person appointed ombudsman shall hold office for a term of six years and shall continue to hold office until reappointed or until his or her successor is appointed. The governor may remove the ombudsman only for neglect of duty, misconduct, or inability to perform duties. Any vacancy shall be filled by similar appointment for the remainder of the unexpired term.

NEW SECTION.  Sec. 3   A new section is added to chapter 51.14 RCW to read as follows:
     Any ombudsman appointed under this chapter shall have training or experience, or both, in the following areas:
     (1) Washington state industrial insurance including self-insurance programs;
     (2) The Washington state legal system;
     (3) Dispute or problem resolution techniques, including investigation, mediation, and negotiation.

NEW SECTION.  Sec. 4   A new section is added to chapter 51.14 RCW to read as follows:
     During the first two years after the office of the ombudsman is created, the staffing level shall be no more than four persons, including the ombudsman and any administrative staff. Thereafter, the staffing levels shall be determined based upon the office of the ombudsman's workload and whether any additional locations are needed.

NEW SECTION.  Sec. 5   A new section is added to chapter 51.14 RCW to read as follows:
     The office of the ombudsman shall have the following powers and duties:
     (1) To act as an advocate for injured workers of self-insured employers;
     (2) To offer and provide information on industrial insurance as appropriate to workers of self-insured employers;
     (3) To identify, investigate, and facilitate resolution of industrial insurance complaints from workers of self-insured employers;      (4) To maintain a statewide toll-free telephone number for the receipt of complaints and inquiries; and
     (5) To refer complaints to the department when appropriate.

NEW SECTION.  Sec. 6   A new section is added to chapter 51.14 RCW to read as follows:
     (1) The office of the ombudsman shall develop referral procedures for complaints by workers of self-insured employers. The department shall act as quickly as possible on any complaint referred to them by the office of the ombudsman.
     (2) The department shall respond to any complaint against a self-insured employer referred to it by the office of the ombudsman and shall forward the office of the ombudsman a summary of the results of the investigation and action proposed or taken.

NEW SECTION.  Sec. 7   A new section is added to chapter 51.14 RCW to read as follows:
     (1) No ombudsman is liable for good faith performance of responsibilities under this chapter.
     (2) No discriminatory, disciplinary, or retaliatory action may be taken against any employee of a self-insured employer for any communication made, or information given or disclosed, to assist the ombudsman in carrying out its duties and responsibilities, unless the same was done maliciously. This subsection is not intended to infringe on the rights of the employer to supervise, discipline, or terminate an employee for other reasons.
     (3) All communications by the ombudsman, if reasonably related to the requirements of his or her responsibilities under this chapter and done in good faith, are privileged and confidential, and this shall serve as a defense to any action in libel or slander.
     (4) Representatives of the office of the ombudsman are exempt from being required to testify as to any privileged or confidential matters except as the court may deem necessary to enforce this chapter.

NEW SECTION.  Sec. 8   A new section is added to chapter 51.14 RCW to read as follows:
     All records and files of the ombudsman relating to any complaint or investigation made pursuant to carrying out its duties and the identities of complainants, witnesses, or injured workers shall remain confidential unless disclosure is authorized by the complainant or injured worker or his or her guardian or legal representative. No disclosures may be made outside the office of the ombudsman without the consent of any named witness or complainant unless the disclosure is made without the identity of any of these individuals being disclosed.

NEW SECTION.  Sec. 9   A new section is added to chapter 51.14 RCW to read as follows:
     The ombudsman shall integrate into existing posters and brochures information explaining the ombudsman program. Both the posters and the brochures shall contain the ombudsman's toll-free telephone number. Every self-insured employer must place a poster in an area where all workers have access to it. The self-insured employer must provide a brochure to all injured workers at the time the employer is notified of the worker's injury.

NEW SECTION.  Sec. 10   A new section is added to chapter 51.14 RCW to read as follows:
     (1) To provide start-up funding for the office of the ombudsman, the department shall impose a one-time assessment on all self-insurers. The amount of the assessment shall be determined by the department and shall not exceed the amount needed to pay the start-up costs.
     (2) Ongoing funding for the office of the ombudsman shall be obtained as part of an annual administrative assessment of self-insurers under RCW 51.44.150. This assessment shall be proportionately based on the number of claims for each self-insurer during the past year.

Sec. 11   RCW 51.44.150 and 1971 ex.s. c 289 s 59 are each amended to read as follows:
     The director shall impose and collect assessments each fiscal year upon all self-insurers in the amount of the estimated costs of administering their portion of this title during such fiscal year. These assessments shall also include the assessments for the ombudsman's office provided for in section 10 of this act. The time and manner of imposing and collecting assessments due the department shall be set forth in regulations promulgated by the director in accordance with chapter 34.05 RCW.

NEW SECTION.  Sec. 12   A new section is added to chapter 51.14 RCW to read as follows:
     (1) The ombudsman shall provide the governor with an annual report that includes the following:
     (a) A description of the issues addressed during the past year and a very brief description of case scenarios in a form that does not compromise confidentiality;
     (b) An accounting of the monitoring activities by the ombudsman; and
     (c) An identification of the deficiencies in the industrial insurance system related to self-insurers, if any, and recommendations for remedial action in policy or practice.
     (2) The first annual report shall be due on or before October 1, 2008. Subsequent reports shall be due on or before October 1st."