READ FIRST TIME 03/05/07.   

     AN ACT Relating to public health funding; amending RCW 82.24.020 and 43.70.520; and adding new sections to chapter 43.70 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 43.70 RCW to read as follows:
     (1) Protecting the public's health across the state is a fundamental responsibility of the state. With any new state funding of the public health system as provided in section 3 of this act, the state expects that measurable benefits will be realized to the health of the residents of Washington. A transparent process that shows the impact of increased public health spending on performance measures related to the health outcomes in subsection (2) of this section is of great value to the state and its residents. In addition, a well-funded public health system is expected to become a more integral part of the state's emergency preparedness system.
     (2) Distributions from the local public health financing account in section 3 of this act shall deliver the following outcomes, subject to the availability of amounts appropriated to the account for this specific purpose:
     (a) Create a disease response system capable of responding at all times;
     (b) Stop the increase in, and reduce, sexually transmitted disease rates;
     (c) Reduce vaccine preventable diseases;
     (d) Build capacity to quickly contain disease outbreaks;
     (e) Decrease childhood and adult obesity and types I and II diabetes rates, and resulting kidney failure and dialysis;
     (f) Increase childhood immunization rates;
     (g) Improve birth outcomes and decrease child abuse;
     (h) Reduce animal-to-human disease rates; and
     (i) Monitor and protect drinking water across jurisdictional boundaries.
     (3) Benchmarks for these outcomes shall be drawn from the national healthy people 2010 goals, other reliable data sets, and any subsequent national goals.

Sec. 2   RCW 82.24.020 and 2003 c 114 s 1 are each amended to read as follows:
     (1) There is levied and there shall be collected as provided in this chapter, a tax upon the sale, use, consumption, handling, possession or distribution of all cigarettes, in an amount equal to the rate of eleven and one-half mills per cigarette. Amounts appropriated for the purposes of this act from the receipts of this tax in the operating budget must be deposited into the local public health financing account created in section 3 of this act.
     (2) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of five and one-fourth mills per cigarette. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.
     (3) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of ten mills per cigarette through June 30, 1994, eleven and one-fourth mills per cigarette for the period July 1, 1994, through June 30, 1995, twenty mills per cigarette for the period July 1, 1995, through June 30, 1996, and twenty and one-half mills per cigarette thereafter. All revenues collected during any month from this additional tax shall be deposited in the health services account created under RCW 43.72.900 by the twenty-fifth day of the following month.
     (4) Wholesalers subject to the payment of this tax may, if they wish, absorb one-half mill per cigarette of the tax and not pass it on to purchasers without being in violation of this section or any other act relating to the sale or taxation of cigarettes.
     (5) For purposes of this chapter, "possession" shall mean both (a) physical possession by the purchaser and, (b) when cigarettes are being transported to or held for the purchaser or his or her designee by a person other than the purchaser, constructive possession by the purchaser or his or her designee, which constructive possession shall be deemed to occur at the location of the cigarettes being so transported or held.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.70 RCW to read as follows:
     (1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Base year funding" means the 2007 budgeted amount of local funding for public health functions passed through ordinance by each county by December 31, 2006.
     (b) "Core public health functions of statewide significance" or "public health functions" means health services that:
     (i) Address: Communicable disease prevention and response; preparation for, and response to, public health emergencies caused by pandemic disease, earthquake, flood, or terrorism; prevention and management of chronic diseases and disabilities; promotion of healthy families and the development of children; assessment of local health conditions, risks, and trends, and evaluation of the effectiveness of intervention efforts; and environmental health concerns;
     (ii) Promote uniformity in the public health activities conducted by all local health jurisdictions in the public health system, increase the overall strength of the public health system, or apply to broad public health efforts; and
     (iii) If left neglected or inadequately addressed, are reasonably likely to have a significant adverse impact on counties beyond the borders of the local health jurisdiction.
     (c) "Local funding" means discretionary local resources for public health functions, including amounts from general and special revenue funds, but excluding amounts received from fees and licenses and other user fee types of payments for service. "Local funding" does not include payments received from the state or federal government.
     (d) "Local health jurisdiction" or "jurisdiction" means a county board of health organized under chapter 70.05 RCW, a health district organized under chapter 70.46 RCW, or a combined city and county health department organized under chapter 70.08 RCW.
     (e) "Population" means the most recent population estimates by the office of financial management for state revenue allocations.
     (2) The local public health financing account is created in the state treasury. Any funds appropriated in the operating budget from the receipts of the tax in RCW 82.24.020(1) for the purposes of this act on or after the effective date of this act shall be deposited into this account. Expenditures from the account must be used for the purposes specified in subsections (3) and (4) of this section, except for such moneys appropriated to the department of health for the purpose of conducting its responsibilities under sections 4, 5, and 7 of this act.
     (3) During the month of January 2008, and during the month of each January thereafter, the state treasurer shall distribute from the local public health financing account any amounts in the account up to a maximum of five million four hundred twenty-five thousand dollars to be shared equally amongst all local health jurisdictions to address core public health functions of statewide significance.
     (4) During the month of January 2008, and during the first month of each fiscal quarter thereafter, the state treasurer, in consultation with the department of revenue or the department of health, as necessary, shall distribute money in the local public health financing account as provided in this subsection. The distributions under this subsection (4) are subsequent to the distribution under subsection (3) of this section.
     Appropriated funds remaining following the distribution of moneys under subsection (3) of this section must be apportioned to local health jurisdictions in the manner provided in this subsection (4). The apportionment factor for each jurisdiction is the population of the jurisdiction's county as a percentage of the statewide population for the prior calendar year. For two or more counties that have jointly created a health district under chapter 70.46 RCW, the combined population of all counties comprising the health district must be used. Money received by a jurisdiction under this subsection (4) must be used to fund core public health functions of statewide significance, and until July 1, 2008, money shall be used to fund only known deficiencies in core public health functions of statewide significance of the jurisdiction.
     (5) To receive distributions under subsections (3) and (4) of this section in calendar year 2010 and thereafter, total local funding spent by the jurisdiction on public health functions in the calendar year prior to the previous calendar year must have equaled or exceeded base year funding. The department of health shall notify the state treasurer to discontinue distributions if the jurisdiction does not meet this requirement.
     (6) In the event of an extraordinary financial circumstance beyond the control of a county that results in funding for local public health functions being reduced to an amount lower than the base year funding, the county may petition the secretary for a waiver from the local funding requirement in subsection (5) of this section. The secretary, after reviewing the county's petition and determining that the local funding reduction is necessary, may grant the county a waiver from the requirements of subsection (5) of this section. In order for the waiver to continue beyond one calendar year, the county must demonstrate to the secretary that an effort is being made to restore funding to the base year funding level.
     (7) The department may adopt rules necessary to administer this section.

NEW SECTION.  Sec. 4   A new section is added to chapter 43.70 RCW to read as follows:
     (1) The department shall accomplish the tasks included in subsection (2) of this section by utilizing the expertise of varied interests, as provided in this subsection.
     (a) In addition to the perspectives of local health jurisdictions, the state board of health, the Washington health foundation, and department staff that are currently engaged in development of the public health services improvement plan under RCW 43.70.520, the secretary shall actively engage:
     (i) Individuals or entities with expertise in the development of performance measures, accountability and systems management, such as the University of Washington school of public health and community medicine, and experts in the development of evidence-based medical guidelines or public health practice guidelines; and
     (ii) Individuals or entities who will be impacted by performance measures developed under this section and have relevant expertise, such as community clinics, public health nurses, large employers, tribal health providers, family planning providers, and physicians.
     (b) In developing the performance measures, consideration shall be given to levels of performance necessary to promote uniformity in core public health functions of statewide significance among all local health jurisdictions, best scientific evidence, national standards of performance, and innovations in public health practice. The performance measures shall be developed to meet the goals and outcomes in section 1 of this act. The office of the state auditor shall provide advice and consultation to the committee to assist in the development of effective performance measures and health status indicators.
     (c) On or before November 1, 2007, the experts assembled under this section shall provide recommendations to the secretary related to the activities and services that qualify as core public health functions of statewide significance and performance measures. The secretary shall provide written justification for any departure from the recommendations.
     (2) By January 1, 2008, the department shall:
     (a) Adopt a prioritized list of activities and services performed by local health jurisdictions that qualify as core public health functions of statewide significance as defined in section 3 of this act; and
     (b) Adopt appropriate performance measures with the intent of improving health status indicators applicable to the core public health functions of statewide significance that local health jurisdictions must provide pursuant to section 3 of this act.
     (3) The secretary may revise the list of activities and the performance measures in future years as appropriate. Prior to modifying either the list or the performance measures, the secretary must provide a written explanation of the rationale for such changes.
     (4) The department and the local health jurisdictions shall abide by the prioritized list of activities and services and the performance measures developed pursuant to this section.
     (5) The department, in consultation with representatives of county governments, shall provide local jurisdictions with financial incentives to encourage and increase local investments in core public health functions. The local jurisdictions shall not supplant existing local funding with such state-incented resources.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.70 RCW to read as follows:
     Beginning November 15, 2009, the department shall report to the legislature and the governor annually on the distribution of funds under section 3 of this act and the use of those funds. The initial report must discuss the performance measures adopted by the secretary and any impact the funding in this act has had on local health jurisdiction performance and health status indicators. Future reports shall evaluate trends in performance over time and the effects of expenditures on performance over time.

Sec. 6   RCW 43.70.520 and 1993 c 492 s 467 are each amended to read as follows:
     (1) The legislature finds that the public health functions of community assessment, policy development, and assurance of service delivery are essential elements in achieving the objectives of health reform in Washington state. The legislature further finds that the population-based services provided by state and local health departments are cost-effective and are a critical strategy for the long-term containment of health care costs. The legislature further finds that the public health system in the state lacks the capacity to fulfill these functions consistent with the needs of a reformed health care system. The legislature further finds that public health nurses and nursing services are an essential part of our public health system, delivering evidence-based care and providing core services including prevention of illness, injury, or disability; the promotion of health; and maintenance of the health of populations.
     (2) The department of health shall develop, in consultation with local health departments and districts, the state board of health, the health services commission, area Indian health service, and other state agencies, health services providers, and citizens concerned about public health, a public health services improvement plan. The plan shall provide a detailed accounting of deficits in the core functions of assessment, policy development, assurance of the current public health system, how additional public health funding would be used, and describe the benefits expected from expanded expenditures.
     (3) The plan shall include:
     (a) Definition of minimum standards for public health protection through assessment, policy development, and assurances:
     (i) Enumeration of communities not meeting those standards;
     (ii) A budget and staffing plan for bringing all communities up to minimum standards;
     (iii) An analysis of the costs and benefits expected from adopting minimum public health standards for assessment, policy development, and assurances;
     (b) Recommended strategies and a schedule for improving public health programs throughout the state, including:
     (i) Strategies for transferring personal health care services from the public health system, into the uniform benefits package where feasible; and
     (ii) ((Timing of increased funding for public health services linked to specific objectives for improving public health)) Linking funding for public health services to performance measures that relate to achieving improved health outcomes; and
     (c) A recommended level of dedicated funding for public health services to be expressed in terms of a percentage of total health service expenditures in the state or a set per person amount; such recommendation shall also include methods to ensure that such funding does not supplant existing federal, state, and local funds received by local health departments, and methods of distributing funds among local health departments.
     (4) The department shall coordinate this planning process with the study activities required in section 258, chapter 492, Laws of 1993.
     (5) By March 1, 1994, the department shall provide initial recommendations of the public health services improvement plan to the legislature regarding minimum public health standards, and public health programs needed to address urgent needs, such as those cited in subsection (7) of this section.
     (6) By December 1, 1994, the department shall present the public health services improvement plan to the legislature, with specific recommendations for each element of the plan to be implemented over the period from 1995 through 1997.
     (7) Thereafter, the department shall update the public health services improvement plan for presentation to the legislature prior to the beginning of a new biennium.
     (8) Among the specific population-based public health activities to be considered in the public health services improvement plan are: Health data assessment and chronic and infectious disease surveillance; rapid response to outbreaks of communicable disease; efforts to prevent and control specific communicable diseases, such as tuberculosis and acquired immune deficiency syndrome; health education to promote healthy behaviors and to reduce the prevalence of chronic disease, such as those linked to the use of tobacco; access to primary care in coordination with existing community and migrant health clinics and other not for profit health care organizations; programs to ensure children are born as healthy as possible and they receive immunizations and adequate nutrition; efforts to prevent intentional and unintentional injury; programs to ensure the safety of drinking water and food supplies; poison control; trauma services; and other activities that have the potential to improve the health of the population or special populations and reduce the need for or cost of health services.

NEW SECTION.  Sec. 7   A new section is added to chapter 43.70 RCW to read as follows:
     (1) Each local health jurisdiction shall submit to the secretary such data as the secretary determines is necessary to allow the secretary to assess whether the local health jurisdiction has used the funds in a manner consistent with achieving the performance measures in section 4 of this act.
     (2) If the secretary determines that the data submitted demonstrates that the local health jurisdiction is not spending the funds in a manner consistent with achieving the performance measures, the secretary shall:
     (a) Provide a report to the governor identifying the local health jurisdiction and the specific items that the secretary identified as inconsistent with achieving the performance measures; and
     (b) Provide technical assistance to the local health jurisdiction to support the jurisdiction in achieving consistency with the performance measures.
     (3) Upon a determination by the secretary that a local health jurisdiction that had previously been identified as not spending the funds in a manner consistent with achieving the performance measures has resumed consistency, the secretary shall notify the governor that the jurisdiction has returned to consistent status.