HJ 95 024

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from that in the original published version.

TWENTY-FOURTH DAY

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MORNING SESSION

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House Chamber, Olympia, Wednesday, February 1, 1995

The House was called to order at 10:00 a.m. by the Speaker. The Clerk called the roll and a quorum was present.

The flag was escorted to the rostrum by a Sergeant at Arms Color Guard, Pages Annie Foreman and Lindsey Serka. Prayer was offered by Reverend Ken Lester of The Evergreen Christian Center.

Reading of the Journal of the previous day was dispensed with and it was ordered to stand approved.

There being no objection, the House advanced to the fourth order of business.

INTRODUCTIONS AND FIRST READING

HB 1591 by Representatives B. Thomas, Cole, Dickerson, Scott, Ebersole, Mason, Chopp, Patterson, Costa and Poulsen; by request of Office of Financial Management

AN ACT Relating to school district levies; amending RCW 84.52.0531; reenacting and amending RCW 28A.500.010; amending 1993 c 465 s 2 (uncodified); and providing an expiration date.

Referred to Committee on Appropriations.

HB 1592 by Representatives L. Thomas, Dellwo, Mielke and G. Fisher

AN ACT Relating to credit against the premium tax for guaranty association assessments paid by insurers; and amending RCW 48.32.145 and 48.32A.090.

Referred to Committee on Financial Institutions & Insurance.

HB 1593 by Representatives Boldt, Morris, Carrell, Sherstad, Kremen, Hargrove, Mastin and Kessler

AN ACT Relating to tax status of child care providers and nonprofit organizations that provide services to children and families; amending RCW 82.04.339 and 82.04.431; adding a new section to chapter 82.04 RCW; providing an effective date; and declaring an emergency.

Referred to Committee on Finance.

HB 1594 by Representatives Foreman, Sherstad, Campbell, Benton, McMahan, Elliot, Chandler and Hargrove

AN ACT Relating to persons rendering aid who had contact with the blood of an injured person; amending RCW 4.24.310; and adding a new section to chapter 4.24 RCW. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Referred to Committee on Law & Justice.

HB 1595 by Representatives Ogden, Jacobsen, Wolfe and Mason

AN ACT Relating to literacy in mathematics, science, and technology; creating new sections; and making an appropriation.

Referred to Committee on Higher Education.

HB 1596 by Representatives Romero, Cody, Conway and Cole

AN ACT Relating to the authority of the department of labor and industries to hold industrial insurance orders in abeyance; and amending RCW 51.52.060.

Referred to Committee on Commerce & Labor.

HB 1597 by Representatives Johnson, Koster, Chandler, Boldt, Sheldon, Mastin, Basich, McMorris, Thompson, Beeksma, Kremen, Hatfield, McMahan, Hymes, Honeyford, D. Schmidt, Skinner, Clements, Buck, Stevens, Mielke and Kessler

AN ACT Relating to flood damage reduction; amending RCW 36.70A.060, 36.70A.070, 36.70A.170, 43.21C.020, 75.20.100, 75.20.103, 75.20.130, 79.90.150, 79.90.300, 86.15.030, 86.15.050, 86.15.160, 86.26.105, 90.58.180, 86.12.200, 90.58.030, and 47.28.140; adding new sections to chapter 75.20 RCW; adding a new section to chapter 79.90 RCW; adding a new section to chapter 43.17 RCW; adding a new section to chapter 86.26 RCW; creating new sections; repealing RCW 79.90.325; and declaring an emergency.

Referred to Committee on Agriculture & Ecology.

HB 1598 by Representatives Mitchell, Ebersole, Conway, R. Fisher, Regala and Costa

AN ACT Relating to taxation of new and rehabilitated multiple-unit housing in urban centers; and adding a new chapter to Title 84 RCW.

Referred to Committee on Trade & Economic Development.

HB 1599 by Representatives Brumsickle, Campbell, Cooke and Mitchell

AN ACT Relating to rental payments to landlords from public assistance; and adding a new section to chapter 74.04 RCW.

Referred to Committee on Children & Family Services.

HB 1600 by Representatives Sheldon, Huff, Kremen, Smith, Romero, Morris, Regala, Wolfe, Campbell, Benton, Cooke, K. Schmidt, Hargrove, Costa, Van Luven and Kessler

AN ACT Relating to valuation for property tax purposes; adding new sections to chapter 84.40 RCW; creating a new section; and providing a contingent effective date.

Referred to Committee on Finance.

HB 1601 by Representatives D. Schmidt, Carlson, Mulliken, Jacobsen, Koster, Sheldon, Costa, Radcliff, Lambert, Robertson, Carrell, Backlund, Ballasiotes, Skinner, Huff, Johnson, Thompson, Elliot, Wolfe, Talcott, Conway, Kremen, Campbell, Benton, Mason, Cooke and Kessler

AN ACT Relating to tuition and fee waivers; and amending RCW 28B.15.535.

Referred to Committee on Higher Education.

HB 1602 by Representatives Cooke, Brown, Wolfe and Mastin; by request of Department of Social and Health Services

AN ACT Relating to the enforcement of child care agency licensing; amending RCW 74.15.010, 74.15.020, 74.15.030, 74.15.130, 74.15.100, and 74.15.120; adding new sections to chapter 74.15 RCW; creating a new section; and prescribing penalties.

Referred to Committee on Children & Family Services.

HB 1603 by Representatives L. Thomas, Morris, Huff, Campbell, Smith, Beeksma and Kessler

AN ACT Relating to deposit account information; adding new sections to chapter 30.22 RCW; adding a new section to chapter 9.38 RCW; and prescribing penalties.

Referred to Committee on Financial Institutions & Insurance.

HB 1604 by Representatives Johnson and Sheldon

AN ACT Relating to the purchase of mobile home parks by qualified tenant organizations; amending RCW 59.23.015, 59.23.020, and 59.20.080; and creating a new section.

Referred to Committee on Trade & Economic Development.

HB 1605 by Representatives Johnson and Sheldon

AN ACT Relating to landlord and tenant relationships; amending RCW 7.75.030, 59.18.390, 59.20.040, 59.20.045, 59.20.080, 59.20.090, 59.20.140, 59.20.130, and 59.23.025; adding new sections to chapter 59.20 RCW; repealing RCW 59.22.090; and prescribing penalties.

Referred to Committee on Trade & Economic Development.

HB 1606 by Representatives Conway, Ballasiotes, Quall, Dickerson, Hatfield, Kremen, Costa and Kessler

AN ACT Relating to registration of sex offenders; amending RCW 9A.44.130; and adding a new section to chapter 9A.44 RCW.

Referred to Committee on Corrections.

HB 1607 by Representatives Van Luven, Carlson, Sheldon, Wolfe and B. Thomas

AN ACT Relating to international education; adding a new chapter to Title 28B RCW; and creating a new section.

Referred to Committee on Trade & Economic Development.

HB 1608 by Representatives Backlund, Cooke, Stevens, Lambert, Sherstad, Carrell, Hargrove, Mulliken, Hymes, Chappell, Crouse, L. Thomas and Smith

AN ACT Relating to parental discipline; and reenacting and amending RCW 26.44.020.

Referred to Committee on Children & Family Services.

HB 1609 by Representatives Radcliff, Dellwo, Reams, L. Thomas, Conway, Ballasiotes, R. Fisher, Sommers, Dickerson, Costa and Poulsen

AN ACT Relating to school district levies; and amending RCW 84.52.0531.

Referred to Committee on Appropriations.

HB 1610 by Representatives Delvin, Costa, Ballasiotes, Padden, Tokuda, Kremen, Chappell, Morris, Campbell, Hatfield, Cody, Regala, Romero, Hickel, Sheldon, Robertson and Kessler

AN ACT Relating to increasing the involvement of victims in the prosecution of criminal cases; amending RCW 9.94A.090; and reenacting and amending RCW 9.94A.440.

Referred to Committee on Law & Justice.

HB 1611 by Representatives Costa, Radcliff, Scott, Kessler, Blanton, Koster, D. Schmidt, Beeksma, Romero, Thompson, Regala and Kremen

AN ACT Relating to tax exemptions for new construction of alternative housing for youth in crisis; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; and declaring an emergency.

Referred to Committee on Finance.

HB 1612 by Representatives Goldsmith, Kremen, Hymes, Quall, Scott, Costa, Radcliff and Romero

AN ACT Relating to permitting special excise taxes on lodgings to be used for festival purposes; and amending RCW 67.28.210.

Referred to Committee on Trade & Economic Development.

HB 1613 by Representatives Pennington, Koster, Benton, Boldt, Carlson, Hatfield, Carrell, Cooke, Chandler and Backlund

AN ACT Relating to child care provided by recipients of aid to families with dependent children; adding new sections to chapter 74.12 RCW; creating new sections; and providing a contingent expiration date.

Referred to Committee on Children & Family Services.

HB 1614 by Representatives Basich, Clements, Van Luven, Regala, Chappell, Dellwo, Sheldon, Hatfield, Conway, Quall, Grant, Kessler, Chopp, D. Schmidt, Jacobsen, Koster, Kremen, Campbell, Benton, Mason, Chandler and Appelwick

AN ACT Relating to veterans' memorials; adding new sections to chapter 73.40 RCW; creating a new section; and making an appropriation.

Referred to Committee on Capital Budget.

HB 1615 by Representatives Backlund, McMorris, Carrell, Sherstad, Lambert, L. Thomas, Blanton, Campbell, Benton, Cooke, Smith, Mulliken, Hargrove, Costa and Kessler

AN ACT Relating to deductions from inmate wages; and amending RCW 72.09.111.

Referred to Committee on Corrections.

HB 1616 by Representatives Mastin and Chappell

AN ACT Relating to emergency rules; and amending RCW 34.05.350.

Referred to Committee on Government Operations.

HB 1617 by Representatives McMorris, Pelesky, Fuhrman, L. Thomas, Pennington, Schoesler, McMahan, Buck, Silver, Hankins, Chandler, Sheahan, Goldsmith, Mulliken, Johnson, Thompson, Skinner, Casada, Sherstad, Delvin, Lambert, Koster, D. Schmidt, Stevens, Hargrove, Van Luven, Smith, Horn, Boldt, Talcott, Huff, Sheldon, Elliot, Brumsickle, Mielke, Reams, Carrell, Backlund, Campbell, Crouse, Lisk, Cairnes, Padden, Clements, Dyer, B. Thomas, Ballasiotes, Mastin and Benton

AN ACT Relating to the acquisition of habitat conservation and outdoor recreation lands; amending RCW 43.98A.030, 43.98A.040, and 43.98A.050; creating a new section; and declaring an emergency.

Referred to Committee on Natural Resources.

HB 1618 by Representative Appelwick

AN ACT Relating to removal of ordinary health care expense from the child support economic table; and amending RCW 26.19.080 and 26.19.020.

Referred to Committee on Law & Justice.

HB 1619 by Representative Appelwick

AN ACT Relating to proportionate sharing of child support expenses not included in the child support economic table; and amending RCW 26.19.080.

Referred to Committee on Law & Justice.

HB 1620 by Representative Appelwick

AN ACT Relating to removal of the advisory status of the child support economic table for combined incomes of five thousand dollars and above; and amending RCW 26.19.020.

Referred to Committee on Law & Justice.

HB 1621 by Representatives Appelwick, Patterson, Mastin, Kessler, Romero, Dellwo, Tokuda, Poulsen, Brown, Chopp, Grant, Cole, Costa, Thibaudeau, G. Fisher, R. Fisher, Morris, Ebersole, Hatfield, Regala, Conway, Wolfe, Scott and Mason

AN ACT Relating to reducing business and occupation tax rates; adding a new section to chapter 82.04 RCW; repealing RCW 82.04.4451; providing an effective date; and declaring an emergency.

Referred to Committee on Finance.

HB 1622 by Representatives Brown, Dellwo, Kremen, Quall, Morris, Chappell, Mason, Regala, Mastin, Grant, Costa and Kessler

AN ACT Relating to reduction of the state sales and use tax rate; amending RCW 82.08.020; providing an effective date; and declaring an emergency.

Referred to Committee on Finance.

HJR 4210 by Representatives Sheldon, Huff, Kremen, Smith, Romero, Morris, Wolfe, Campbell, Benton, Cooke, K. Schmidt, Hargrove, Costa and Kessler

Amending the Constitution to allow the legislature to limit increases in taxation of real estate.

Referred to Committee on Finance.

ESCR 8403 by Senators Snyder, Prince and Winsley

Recognizing the "Old Timers" reunion.

MOTION

On motion of Representative Foreman, the bills and resolutions listed on today's introduction sheet under the fourth order of business were referred to the committees so designated.

There being no objection, the House advanced to the fifth order of business.

REPORTS OF STANDING COMMITTEES

January 31, 1995

HB 1028 Prime Sponsor, Representative Dyer: Delaying implementation of the health services act. Reported by Committee on Health Care

MAJORITY recommendation: The substitute bill be substituted therefor and the substitute bill do pass. Signed by Representatives Dyer, Chairman; Backlund, Vice Chairman; Hymes, Vice Chairman; Casada; Crouse; Morris; Sherstad and Skinner.

MINORITY recommendation: Do not pass. Signed by Representatives Dellwo, Ranking Minority Member; Cody, Assistant Ranking Minority Member; and Conway.

Voting Yea: Representatives Backlund, Casada, Crouse, Dyer, Hymes, Morris, Sherstad, and Skinner.

Voting Nay: Representatives Cody, Conway and Dellwo.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1086 Prime Sponsor, Representative Hickel: Revising provisions relating to personal property liens and security interests. Reported by Committee on Law & Justice

MAJORITY recommendation: Do pass. Signed by Representatives Padden, Chairman; Delvin, Vice Chairman; Hickel, Vice Chairman; Appelwick, Ranking Minority Member; Costa, Assistant Ranking Minority Member; Carrell; Chappell; Cody; Lambert; McMahan; Morris; Robertson; Sheahan; Smith and Veloria.

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1087 Prime Sponsor, Representative Hickel: Correcting an unconstitutional provision concerning jurisdiction for violations dealing with motor vehicles. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1096 Prime Sponsor, Representative Padden: Modifying the limited liability company act. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1097 Prime Sponsor, Representative Sheahan: Waiving penalties for certain estate tax returns. Reported by Committee on Law & Justice

MAJORITY recommendation: The substitute bill be substituted therefor and the substitute bill do pass. Signed by Representatives Padden, Chairman; Delvin, Vice Chairman; Hickel, Vice Chairman; Appelwick, Ranking Minority Member; Costa, Assistant Ranking Minority Member; Carrell; Chappell; Cody; Lambert; McMahan; Morris; Robertson; Sheahan; Smith and Veloria.

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1176 Prime Sponsor, Representative Delvin: Authorizing Benton county to have one additional district court judge. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1182 Prime Sponsor, Representative Hickel: Modifying the uniform commercial code. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1183 Prime Sponsor, Representative Appelwick: Updating uniform commercial code provisions on investment securities. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1185 Prime Sponsor, Representative Hickel: Revising regulations for the investment of trust funds. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1186 Prime Sponsor, Representative Appelwick: Concerning social security benefits. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

HB 1237 Prime Sponsor, Representative Padden: Specifying responsibility for payment of costs incurred on appeal by indigent persons. Reported by Committee on Law & Justice

Voting Yea: Representatives Appelwick, Carrell, Chappell, Cody, Costa, Delvin, Hickel, Lambert, McMahan, Morris, Padden, Robertson, Sheahan, Smith, and Veloria.

Passed to Committee on Rules for second reading.

January 31, 1995

SB 5038 Prime Sponsor, Senator Quigley: Extending time periods for certain health care reform activities. Reported by Committee on Health Care

MAJORITY recommendation: Do pass with the following amendment:

Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 41.05.022 and 1994 c 153 s 3 are each amended to read as follows:

(1) The health care authority is hereby designated as the single state agent for purchasing health services.

(2) On and after January 1, 1995, at least the following state-purchased health services programs shall be merged into a single, community-rated risk pool: Health benefits for employees of school districts and educational service districts; health benefits for state employees; health benefits for eligible retired or disabled school employees not eligible for parts A and B of medicare; and health benefits for eligible state retirees not eligible for parts A and B of medicare. Beginning July 1, 1995, the basic health plan shall be included in the risk pool. The administrator may develop mechanisms to ensure that the cost of comparable benefits packages does not vary widely across the risk pools before they are merged. At the earliest opportunity the governor shall seek necessary federal waivers and state legislation to place the medical and acute care components of the medical assistance program, the limited casualty program, and the medical care services program of the department of social and health services in this single risk pool. Long-term care services that are provided under the medical assistance program shall not be placed in the single risk pool until such services have been added to the uniform benefits package. On or before January 1, 1997, the governor shall submit necessary legislation to place the purchasing of health benefits for persons incarcerated in institutions administered by the department of corrections into the single community-rated risk pool effective on and after July 1, 1997.

(3) At a minimum, and regardless of other legislative enactments, the state health services purchasing agent shall:

(a) Require that a public agency that provides subsidies for a substantial portion of services now covered under the basic health plan or a uniform benefits package as adopted ((by the Washington health services commission as provided in)) and from time to time revised pursuant to RCW 43.72.130, use uniform eligibility processes, insofar as may be possible, and ensure that multiple eligibility determinations are not required;

(b) Require that a health care provider or a health care facility that receives funds from a public program provide care to state residents receiving a state subsidy who may wish to receive care from them consistent with the provisions of chapter 492, Laws of 1993, and that a health maintenance organization, health care service contractor, insurer, or certified health plan that receives funds from a public program accept enrollment from state residents receiving a state subsidy who may wish to enroll with them under the provisions of chapter 492, Laws of 1993;

(c) Strive to integrate purchasing for all publicly sponsored health services in order to maximize the cost control potential and promote the most efficient methods of financing and coordinating services;

(d) Annually suggest changes in state and federal law and rules to bring all publicly funded health programs in compliance with the goals and intent of chapter 492, Laws of 1993;

(e) Consult regularly with the governor, the legislature, and state agency directors whose operations are affected by the implementation of this section.

Sec. 2. RCW 41.05.200 and 1993 c 492 s 228 are each amended to read as follows:

(1) The Washington state group purchasing association is established for the purpose of coordinating and enhancing the health care purchasing power of the groups identified in subsection (2) of this section. The purchasing association shall be administered by the administrator.

(2) The following organizations or entities may seek the approval of the administrator for membership in the purchasing association:

(a) Private nonprofit human services provider organizations under contract with state agencies, on behalf of their employees and their employees' spouses and dependent children;

(b) Individuals providing in-home long-term care services to persons whose care is financed in whole or in part through the medical assistance personal care or community options program entry system program as provided in chapter 74.09 RCW, or the chore services program, as provided in chapter 74.08 RCW, on behalf of themselves and their spouses and dependent children;

(c) Owners and operators of child day care centers and family child care homes licensed under chapter 74.15 RCW and of preschool or other child care programs exempted from licensing under chapter 74.15 RCW on behalf of themselves and their employees and employees' spouses and dependent children; and

(d) Foster parents contracting with the department of social and health services under chapter 74.13 RCW and licensed under chapter 74.15 RCW on behalf of themselves and their spouses and dependent children.

(3) In administering the purchasing association, the administrator shall:

(a) Negotiate and enter into contracts on behalf of the purchasing association's members in conjunction with its contracting and purchasing activities for employee benefits plans under RCW 41.05.075. In negotiating and contracting with insuring entities on behalf of employees and purchasing association members, two distinct pools shall be maintained.

(b) Review and approve or deny applications from entities seeking membership in the purchasing association:

(i) The administrator may require all or the substantial majority of the employees of the organizations or entities listed in subsection (2) of this section to enroll in the purchasing association.

(ii) The administrator shall require, that as a condition of membership in the purchasing association, an entity or organization listed in subsection (2) of this section that employs individuals pay at least fifty percent of the cost of the health insurance coverage for each employee enrolled in the purchasing association.

(iii) In offering and administering the purchasing association, the administrator may not discriminate against individuals or groups based on age, gender, geographic area, industry, or medical history.

(4) On and after July 1, 1995, the uniform benefits package and schedule of premiums and point of service cost-sharing adopted and from time to time revised ((by the health services commission)) pursuant to ((chapter 492, Laws of 1993)) RCW 43.72.130 shall be applicable to the association.

(5) The administrator shall adopt preexisting condition coverage provisions for the association as provided in RCW 48.20.540, 48.21.340, 48.44.480, and 48.46.550.

(6) Premiums charged to purchasing association members shall include the authority's reasonable administrative and marketing costs. Purchasing association members may not receive any subsidy from the state for the purchase of health insurance coverage through the association.

(7)(a) The Washington state group purchasing association account is established in the custody of the state treasurer, to be used by the administrator for the deposit of premium payments from individuals and entities described in subsection (2) of this section, and for payment of premiums for benefit contracts entered into on behalf of the purchasing association's participants and operating expenses incurred by the authority in the administration of benefit contracts under this section. Moneys from the account shall be disbursed by the state treasurer by warrants on vouchers duly authorized by the administrator.

(b) Disbursements from the account are not subject to appropriations, but shall be subject to the allotment procedure provided under chapter 43.88 RCW.

Sec. 3. RCW 43.72.010 and 1994 c 4 s 1 are each amended to read as follows:

In this chapter, unless the context otherwise requires:

(1) "Certified health plan" or "plan" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, a health maintenance organization as defined in RCW 48.46.020, or an entity certified in accordance with RCW 48.43.020 through 48.43.120.

(2) "Chairman" means the presiding officer of the Washington health services commission.

(3) "Commission" or "health services commission" means the Washington health services commission.

(4) "Community rate" means the rating method used to establish the premium for the uniform benefits package adjusted to reflect actuarially demonstrated differences in utilization or cost attributable to geographic region and family size as determined by the commission.

(5) "Continuous quality improvement and total quality management" means a continuous process to improve health services while reducing costs.

(6) "Employee" means a resident who is in the employment of an employer, as defined by chapter 50.04 RCW.

(7) "Enrollee" means any person who is a Washington resident enrolled in a certified health plan.

(8) "Enrollee point of service cost-sharing" means amounts paid to certified health plans directly providing services, health care providers, or health care facilities by enrollees for receipt of specific uniform benefits package services, and may include copayments, coinsurance, or deductibles, that together must be actuarially equivalent across plans and within overall limits established by the commission.

(9) "Enrollee premium sharing" means that portion of the premium that is paid by enrollees or their family members.

(10) "Federal poverty level" means the federal poverty guidelines determined annually by the United States department of health and human services or successor agency.

(11) "Health care facility" or "facility" means hospices licensed under chapter 70.127 RCW, hospitals licensed under chapter 70.41 RCW, rural health care facilities as defined in RCW 70.175.020, psychiatric hospitals licensed under chapter 71.12 RCW, nursing homes licensed under chapter 18.51 RCW, community mental health centers licensed under chapter 71.05 or 71.24 RCW, kidney disease treatment centers licensed under chapter 70.41 RCW, ambulatory diagnostic, treatment or surgical facilities licensed under chapter 70.41 RCW, drug and alcohol treatment facilities licensed under chapter 70.96A RCW, and home health agencies licensed under chapter 70.127 RCW, and includes such facilities if owned and operated by a political subdivision or instrumentality of the state and such other facilities as required by federal law and implementing regulations, but does not include Christian Science sanatoriums operated, listed, or certified by the First Church of Christ Scientist, Boston, Massachusetts.

(12) "Health care provider" or "provider" means:

(a) A person regulated under Title 18 RCW and chapter 70.127 RCW, to practice health or health-related services or otherwise practicing health care services in this state consistent with state law; or

(b) An employee or agent of a person described in (a) of this subsection, acting in the course and scope of his or her employment.

(13) "Health insurance purchasing cooperative" or "cooperative" means a member-owned and governed nonprofit organization certified in accordance with RCW 43.72.080 and 48.43.160.

(14) "Long-term care" means institutional, residential, outpatient, or community-based services that meet the individual needs of persons of all ages who are limited in their functional capacities or have disabilities and require assistance with performing two or more activities of daily living for an extended or indefinite period of time. These services include case management, protective supervision, in-home care, nursing services, convalescent, custodial, chronic, and terminally ill care.

(15) "Major capital expenditure" means any project or expenditure for capital construction, renovations, or acquisition, including medical technological equipment, as defined by the commission, costing more than one million dollars.

(16) "Managed care" means an integrated system of insurance, financing, and health services delivery functions that: (a) Assumes financial risk for delivery of health services and uses a defined network of providers; or (b) assumes financial risk for delivery of health services and promotes the efficient delivery of health services through provider assumption of some financial risk including capitation, prospective payment, resource-based relative value scales, fee schedules, or similar method of limiting payments to health care providers.

(17) "Maximum enrollee financial participation" means the income-related total annual payments that may be required of an enrollee per family who chooses one of the three lowest priced uniform benefits packages offered by plans in a geographic region including both premium sharing and enrollee point of service cost-sharing.

(18) "Persons of color" means Asians/Pacific Islanders, African, Hispanic, and Native Americans.

(19) "Premium" means all sums charged, received, or deposited by a certified health plan as consideration for a uniform benefits package or the continuance of a uniform benefits package. Any assessment, or any "membership," "policy," "contract," "service," or similar fee or charge made by the certified health plan in consideration for the uniform benefits package is deemed part of the premium. "Premium" shall not include amounts paid as enrollee point of service cost-sharing.

(20) "Qualified employee" means an employee who is employed at least thirty hours during a week or one hundred twenty hours during a calendar month.

(21) "Registered employer health plan" means a health plan established by a private employer of more than seven thousand active employees in this state solely for the benefit of such employees and their dependents and that meets the requirements of RCW 43.72.120. Nothing contained in this subsection shall be deemed to preclude the plan from providing benefits to retirees of the employer.

(22) "Supplemental benefits" means those appropriate and effective health services that are not included in the uniform benefits package or that expand the type or level of health services available under the uniform benefits package and that are offered to all residents in accordance with the provisions of RCW 43.72.160 and 43.72.170.

(23) "Technology" means the drugs, devices, equipment, and medical or surgical procedures used in the delivery of health services, and the organizational or supportive systems within which such services are provided. It also means sophisticated and complicated machinery developed as a result of ongoing research in the basic biological and physical sciences, clinical medicine, electronics, and computer sciences, as well as specialized professionals, medical equipment, procedures, and chemical formulations used for both diagnostic and therapeutic purposes.

(24) "Uniform benefits package" or "package" means those appropriate and effective health services, ((defined by the commission under)) adopted and from time to time revised pursuant to RCW 43.72.130, that must be offered to all Washington residents through certified health plans.

(25) "Washington resident" or "resident" means a person who intends to reside in the state permanently or indefinitely and who did not move to Washington for the primary purpose of securing health services under RCW 43.72.090 through 43.72.240, 43.72.300, 43.72.310, 43.72.800, and chapters 48.43 and 48.85 RCW. "Washington resident" also includes people and their accompanying family members who are residing in the state for the purpose of engaging in employment for at least one month, who did not enter the state for the primary purpose of obtaining health services. The confinement of a person in a nursing home, hospital, or other medical institution in the state shall not by itself be sufficient to qualify such person as a resident.

Sec. 4. RCW 43.72.040 and 1994 c 4 s 3 are each amended to read as follows:

The commission has the following powers and duties:

(1) Ensure that all residents of Washington state are enrolled in a certified health plan to receive the uniform benefits package, regardless of age, sex, family structure, ethnicity, race, health condition, geographic location, employment, or economic status.

(2) Endeavor to ensure that all residents of Washington state have access to appropriate, timely, confidential, and effective health services, and monitor the degree of access to such services. If the commission finds that individuals or populations lack access to certified health plan services, the commission shall:

(a) Authorize appropriate state agencies, local health departments, community or migrant health clinics, public hospital districts, or other nonprofit health service entities to take actions necessary to assure such access. This includes authority to contract for or directly deliver services described within the uniform benefits package to special populations; or

(b) Notify appropriate certified health plans and the insurance commissioner of such findings. The commission shall adopt by rule standards by which the insurance commissioner may, in such event, require certified health plans in closest proximity to such individuals and populations to extend their catchment areas to those individuals and populations and offer them enrollment.

(3) Adopt necessary rules in accordance with chapter 34.05 RCW to carry out the purposes of chapter 492, Laws of 1993. An initial set of draft rules establishing at least the commission's organization structure, the uniform benefits package, and standards for certified health plan certification, must be submitted in draft form to appropriate committees of the legislature by December 1, 1994.

(4) Establish and modify as necessary, in consultation with the state board of health and the department of health, and coordination with the planning process set forth in RCW 43.70.520 a uniform set of health services based on the recommendations of the health care cost control and access commission established under House Concurrent Resolution No. 4443 adopted by the legislature in 1990.

(5) ((Establish and modify as necessary)) Make recommendations to the legislature for the uniform benefits package as provided in RCW 43.72.130, which shall be offered to enrollees of a certified health plan. The benefit package shall be provided at no more than the maximum premium specified in subsection (6) of this section.

(6)(a) Establish for each year a community-rated maximum premium for the uniform benefits package that shall operate to control overall health care costs. The maximum premium cost of the uniform benefits package in the base year 1995 shall be established upon an actuarial determination of the costs of providing the uniform benefits package and such other cost impacts as may be deemed relevant by the commission. Beginning in 1996, the growth rate of the premium cost of the uniform benefits package for each certified health plan shall be allowed to increase by a rate no greater than the average growth rate in the cost of the package between 1990 and 1993 as actuarially determined, reduced by two percentage points per year until the growth rate is no greater than the five-year rolling average of growth in Washington per capita personal income, as determined by the office of financial management.

(b) In establishing the community-rated maximum premium under this subsection, the commission shall review various methods for establishing the community-rated maximum premium and shall recommend such methods to the legislature by December 1, 1994.

The commission may develop and recommend a rate for employees that provides nominal, if any, variance between the rate for individual employees and employees with dependents to minimize any economic incentive to an employer to discriminate between prospective employees based upon whether or not they have dependents for whom coverage would be required.

(c) If ((the commission adds or deletes)) services or benefits are added to or deleted from the uniform benefits package in subsequent years, ((it)) the commission may increase or decrease the maximum premium to reflect the actual cost experience of a broad sample of providers of that service in the state, considering the factors enumerated in (a) of this subsection and adjusted actuarially. The addition of services or benefits shall not result in a redetermination of the entire cost of the uniform benefits package.

(d) The level of state expenditures for the uniform benefits package shall be limited to the appropriation of funds specifically for this purpose.

(7) Determine the need for medical risk adjustment mechanisms to minimize financial incentives for certified health plans to enroll individuals who present lower health risks and avoid enrolling individuals who present higher health risks, and to minimize financial incentives for employer hiring practices that discriminate against individuals who present higher health risks. In the design of medical risk distribution mechanisms under this subsection, the commission shall (a) balance the benefits of price competition with the need to protect certified health plans from any unsustainable negative effects of adverse selection; (b) consider the development of a system that creates a risk profile of each certified health plan's enrollee population that does not create disincentives for a plan to control benefit utilization, that requires contributions from plans that enjoy a low-risk enrollee population to plans that have a high-risk enrollee population, and that does not permit an adjustment of the premium charged for the uniform benefits package or supplemental coverage based upon either receipt or contribution of assessments; and (c) consider whether registered employer health plans should be included in any medical risk adjustment mechanism. ((Proposed)) Any medical risk adjustment mechanisms proposed by the commission shall be submitted to the legislature ((as provided in RCW 43.72.180)) for legislative consideration.

(8) Design a mechanism to assure minors have access to confidential health care services as currently provided in RCW 70.24.110 and 71.34.030.

(9) Monitor the actual growth in total annual health services costs.

(10) Monitor the increased application of technology as required by chapter 492, Laws of 1993 and take necessary action to ensure that such application is made in a cost-effective and efficient manner and consistent with existing laws that protect individual privacy.

(11) Establish reporting requirements for certified health plans that own or manage health care facilities, health care facilities, and health care providers to periodically report to the commission regarding major capital expenditures of the plans. The commission shall review and monitor such reports and shall report to the legislature regarding major capital expenditures on at least an annual basis. The Washington health care facilities authority and the commission shall develop standards jointly for evaluating and approving major capital expenditure financing through the Washington health care facilities authority, as authorized pursuant to chapter 70.37 RCW. By December 1, 1994, the commission and the authority shall submit jointly to the legislature such proposed standards. The commission and the authority shall, after legislative review, but no later than June 1, 1995, publish such standards. Upon publication, the authority may not approve financing for major capital expenditures unless approved by the commission.

(12) Establish maximum enrollee financial participation levels. The levels shall be related to enrollee household income.

(13) Establish rules requiring employee enrollee premium sharing, as defined in RCW 43.72.010(9), be paid through deductions from wages or earnings.

(14) For health services provided under the uniform benefits package and supplemental benefits, adopt standards for enrollment, and standardized billing and claims processing forms. The standards shall ensure that these procedures minimize administrative burdens on health care providers, health care facilities, certified health plans, and consumers. Subject to federal approval or phase-in schedules whenever necessary or appropriate, the standards also shall apply to state-purchased health services, as defined in RCW 41.05.011.

(15) Propose that certified health plans adopt certain practice indicators or risk management protocols for quality assurance, utilization review, or provider payment. The commission may consider indicators or protocols recommended according to RCW 43.70.500 for these purposes.

(16) Propose other guidelines to certified health plans for utilization management, use of technology and methods of payment, such as diagnosis-related groups and a resource-based relative value scale. Such guidelines shall be voluntary and shall be designed to promote improved management of care, and provide incentives for improved efficiency and effectiveness within the delivery system.

(17) Adopt standards and oversee and develop policy for personal health data and information system as provided in chapter 70.170 RCW.

(18) Adopt standards that prevent conflict of interest by health care providers as provided in RCW 18.130.320.

(19) At the appropriate juncture and in the fullness of time, consider the extent to which medical research and health professions training activities should be included within the health service system set forth in chapter 492, Laws of 1993.

(20) Evaluate and monitor the extent to which racial and ethnic minorities have access to and receive health services within the state, and develop strategies to address barriers to access.

(21) Develop standards for the certification process to certify health plans and employer health plans to provide the uniform benefits package, according to the provisions for certified health plans and registered employer health plans under chapter 492, Laws of 1993.

(22) Develop rules for implementation of individual and employer participation under RCW 43.72.210 and 43.72.220 specifically applicable to persons who work in this state but do not live in the state or persons who live in this state but work outside of the state. The rules shall be designed so that these persons receive coverage and financial requirements that are comparable to that received by persons who both live and work in the state.

(23) After receiving advice from the health services effectiveness committee, adopt rules that must be used by certified health plans, disability insurers, health care service contractors, and health maintenance organizations to determine whether a procedure, treatment, drug, or other health service is no longer experimental or investigative.

(24) Establish a process for purchase of uniform benefits package services by enrollees when they are out-of-state.

(25) Develop recommendations to the legislature as to whether state and school district employees, on whose behalf health benefits are or will be purchased by the health care authority pursuant to chapter 41.05 RCW, should have the option to purchase health benefits through health insurance purchasing cooperatives on and after July 1, 1997. In developing its recommendations, the commission shall consider:

(a) The impact of state or school district employees purchasing through health insurance purchasing cooperatives on the ability of the state to control its health care costs; and

(b) Whether state or school district employees purchasing through health insurance purchasing cooperatives will result in inequities in health benefits between or within groups of state and school district employees.

(26) Establish guidelines for providers dealing with terminal or static conditions, taking into consideration the ethics of providers, patient and family wishes, costs, and survival possibilities.

(27) Evaluate the extent to which Taft-Hartley health care trusts provide benefits to certain individuals in the state; review the federal laws under which these trusts are organized; and make appropriate recommendations to the governor and the legislature on or before December 1, 1994, as to whether these trusts should be brought under the provisions of chapter 492, Laws of 1993 when it is fully implemented, and if the commission recommends inclusion of the trusts, how to implement such inclusion.

(28) Evaluate whether Washington is experiencing a higher percentage in in-migration of residents from other states and territories than would be expected by normal trends as a result of the availability of unsubsidized and subsidized health care benefits for all residents and report to the governor and the legislature their findings.

(29) In developing recommendations for the uniform benefits package and other standards pursuant to this section, consider the likelihood of the establishment of a national health services plan adopted by the federal government and its implications.

(30) Evaluate the effect of reforms under chapter 492, Laws of 1993 on access to care and economic development in rural areas.

To the extent that the exercise of any of the powers and duties specified in this section may be inconsistent with the powers and duties of other state agencies, offices, or commissions, the authority of the commission shall supersede that of such other state agency, office, or commission, except in matters of personal health data, where the commission shall have primary data system policy-making authority and the department of health shall have primary responsibility for the maintenance and routine operation of personal health data systems.

Sec. 5. RCW 43.72.130 and 1993 c 492 s 449 are each amended to read as follows:

(1) The commission shall ((define)) develop recommendations for the uniform benefits package, which shall include those health services that, consistent with the goals and intent of chapter 492, Laws of 1993, are effective and necessary on a societal basis for the maintenance of the health of citizens of the state, weighed against the need to control state health services expenditures.

(2) The recommended schedule of covered health services shall emphasize proven preventive and primary health care and shall be composed of the following essential health services: (a) Primary and specialty health services; (b) inpatient and outpatient hospital services; (c) prescription drugs and medications; (d) reproductive services; (e) services necessary for maternity and well-child care, including preventive dental services for children; and (f) case-managed chemical dependency, mental health, short-term skilled nursing facility, home health, and hospice services, to the extent that such services reduce inappropriate utilization of more intensive or less efficacious medical services. The commission's recommendations shall ((determine)) include the specific schedule of health services within the uniform benefits package, including limitations on scope and duration of services. The recommended schedule shall be the benefit and actuarial equivalent of the schedule of benefits offered by the basic health plan on January 1, 1993, including any additions that may result from the inclusion of the services listed in (c) through (f) of this subsection. ((The commission shall consider the recommendations of health services effectiveness panels [committee] established pursuant to RCW 43.72.060 in defining the uniform benefits package.))

(3) The uniform benefits package shall not limit coverage for preexisting or prior conditions, except that ((the commission shall establish)) exclusions for preexisting or prior conditions shall be included to the extent necessary to prevent residents from waiting until health services are needed before enrolling in a certified health plan.

(4) In making recommendations for the uniform benefits package, the commission shall seek the opinions of and information from the public. The commission shall also consider the recommendations of the health services effectiveness committee established in RCW 43.72.060 and the results of the public health assessment and policy development activities of the department of health.

(5) By December 1, 1994, and by December 1 of the year preceding any year in which the commission will request revision of the uniform benefits package, the commission shall submit the following to the legislature for consideration: (a) The recommended uniform benefits package or recommended revisions to the uniform benefits package; and (b) an independent actuarial analysis of the cost of the proposed package or proposed revisions giving consideration to the factors considered under RCW 43.72.040(6). The commission may not propose modification of the services included in the uniform benefits package before January 1, 1999. The uniform benefits package or uniform benefits package revisions may not take effect unless adopted by an act of law.

(6) The commission shall establish enrollee point of service cost-sharing for nonpreventive health services, related to enrollee household income, such that financial considerations are not a barrier to access for low-income persons, but that, for those of means, the uniform benefits package provides for moderate point of service cost-sharing. All point of service cost-sharing and cost control requirements shall apply uniformly to all health care providers providing substantially similar uniform benefits package services. The schedule shall provide for an alternate and lower schedule of cost-sharing applicable to enrollees with household income below the federal poverty level.

(((5))) (7) The commission shall adopt rules related to coordination of benefits and premium payments. The rules shall not have the effect of eliminating enrollee financial participation. The commission shall endeavor to assure an equitable distribution, among both employers and employees, of the costs of coverage for those households composed of more than one member in the work force.

(((6) In determining the uniform benefits package, the commission shall endeavor to seek the opinions of and information from the public. The commission shall consider the results of official public health assessment and policy development activities including recommendations of the department of health in discharging its responsibilities under this section.

(7) The commission shall submit the following to the legislature by December 1, 1994, and by December 1 of the year preceding any year in which the commission proposes to significantly modify the uniform benefits package: (a) The uniform benefits package; and (b) an independent actuarial analysis of the cost of the proposed package, giving consideration to the factors considered under RCW 43.72.040(6). The commission shall not modify the services included in the uniform benefits package before January 1, 1999.))

Sec. 6. RCW 48.01.210 and 1993 c 462 s 51 are each amended to read as follows:

(1) An insurer, health care service contractor, or health maintenance organization that offers coverage for dental services and is in full compliance with all applicable laws under chapter 48.05, 48.44, or 48.46 RCW governing the financial supervision and solvency of such organizations, including but not limited to laws concerning capital and surplus requirements, reserves, deposits, bonds, and indemnities, may provide coverage for dental services, to individuals and to employers for the benefit of employees or for the benefit of employees and their dependents, by separate policy, contract, or rider. If an individual or an employer purchases coverage for dental services from such a company and the coverage is part of the uniform benefits package ((designed by the Washington health services commission)) adopted and from time to time revised pursuant to RCW 43.72.130, the certified health plan covering the individual, employees, or employees and dependents need not provide dental services under the uniform benefits package. A certified health plan may subcontract with such a company to provide any dental services required under the uniform benefits package.

(2) An insurer, health care service contractor, or health maintenance organization described in subsection (1) of this section is deemed certified and registered as a certified health plan under RCW 43.72.090 and 48.43.010 for the delivery of coverage for dental services. The Washington health services commission and the commissioner shall adopt standards and procedures to permit, upon request, the prompt certification and registration of such a company. Such a company may offer coverage for dental services supplemental to the uniform benefits package, but the supplemental benefits are not subject to RCW 43.72.100, 43.72.160, and 43.72.170.

Sec. 7. RCW 70.47.060 and 1994 c 309 s 5 are each amended to read as follows:

The administrator has the following powers and duties:

(1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care, which subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive in return for premium payments to the plan. The schedule of services shall emphasize proven preventive and primary health care and shall include all services necessary for prenatal, postnatal, and well-child care. However, with respect to coverage for groups of subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that such services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider. The schedule of services shall also include a separate schedule of basic health care services for children, eighteen years of age and younger, for those subsidized or nonsubsidized enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services, the administrator shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080, and such other factors as the administrator deems appropriate. On and after July 1, 1995, the uniform benefits package adopted and from time to time revised ((by the Washington health services commission)) pursuant to RCW 43.72.130 shall be implemented by the administrator as the schedule of covered basic health care services. However, with respect to coverage for subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that the services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider.

(2)(a) To design and implement a structure of periodic premiums due the administrator from subsidized enrollees that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members. The enrollment of children shall not require the enrollment of their parent or parents who are eligible for the plan. The structure of periodic premiums shall be applied to subsidized enrollees entering the plan as individuals pursuant to subsection (9) of this section and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (10) of this section.

(b) To determine the periodic premiums due the administrator from nonsubsidized enrollees. Premiums due from nonsubsidized enrollees shall be in an amount equal to the cost charged by the managed health care system provider to the state for the plan plus the administrative cost of providing the plan to those enrollees and the premium tax under RCW 48.14.0201.

(c) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator, but in no case shall the payment made on behalf of the enrollee exceed the total premiums due from the enrollee.

(3) To design and implement a structure of copayments due a managed health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services. On and after July 1, 1995, the administrator shall endeavor to make the copayments structure of the plan consistent with enrollee point of service cost-sharing levels adopted by the Washington health services commission, giving consideration to funding available to the plan.

(4) To limit enrollment of persons who qualify for subsidies so as to prevent an overexpenditure of appropriations for such purposes. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists.

(5) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020.

(6) To adopt a schedule for the orderly development of the delivery of services and availability of the plan to residents of the state, subject to the limitations contained in RCW 70.47.080 or any act appropriating funds for the plan.

(7) To solicit and accept applications from managed health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan. The administrator shall endeavor to assure that covered basic health care services are available to any enrollee of the plan from among a selection of two or more participating managed health care systems. In adopting any rules or procedures applicable to managed health care systems and in its dealings with such systems, the administrator shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several areas of the state. Contracts with participating managed health care systems shall ensure that basic health plan enrollees who become eligible for medical assistance may, at their option, continue to receive services from their existing providers within the managed health care system if such providers have entered into provider agreements with the department of social and health services.

(8) To receive periodic premiums from or on behalf of subsidized and nonsubsidized enrollees, deposit them in the basic health plan operating account, keep records of enrollee status, and authorize periodic payments to managed health care systems on the basis of the number of enrollees participating in the respective managed health care systems.

(9) To accept applications from individuals residing in areas served by the plan, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan as subsidized or nonsubsidized enrollees, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and at least semiannually thereafter, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If, as a result of an eligibility review, the administrator determines that a subsidized enrollee's income exceeds twice the federal poverty level and that the enrollee knowingly failed to inform the plan of such increase in income, the administrator may bill the enrollee for the subsidy paid on the enrollee's behalf during the period of time that the enrollee's income exceeded twice the federal poverty level. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they will be allowed to re-enroll in the plan.

(10) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a managed health care system. The administrator shall require that a business owner pay at least fifty percent of the nonsubsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a managed care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating managed health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes.

(11) To determine the rate to be paid to each participating managed health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same for similar enrollees, the rates negotiated with participating managed health care systems may vary among the systems. In negotiating rates with participating systems, the administrator shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area, the need to conserve the resources of the basic health plan trust account, and other factors the administrator finds relevant.

(12) To monitor the provision of covered services to enrollees by participating managed health care systems in order to assure enrollee access to good quality basic health care, to require periodic data reports concerning the utilization of health care services rendered to enrollees in order to provide adequate information for evaluation, and to inspect the books and records of participating managed health care systems to assure compliance with the purposes of this chapter. In requiring reports from participating managed health care systems, including data on services rendered enrollees, the administrator shall endeavor to minimize costs, both to the managed health care systems and to the plan. The administrator shall coordinate any such reporting requirements with other state agencies, such as the insurance commissioner and the department of health, to minimize duplication of effort.

(13) To evaluate the effects this chapter has on private employer-based health care coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state.

(14) To develop a program of proven preventive health measures and to integrate it into the plan wherever possible and consistent with this chapter.

(15) To provide, consistent with available funding, assistance for rural residents, underserved populations, and persons of color.

NEW SECTION. Sec. 8. Section 2 of this act shall expire June 30, 1998.

NEW SECTION. Sec. 9. RCW 43.72.180 and 1993 c 492 s 454 are each repealed.

NEW SECTION. Sec. 10. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995."

On page 1, line 2 of the title, after "standards;" strike the remainder of the title and insert "amending RCW 41.05.022, 41.05.200, 43.72.010, 43.72.040, 43.72.130, 48.01.210, and 70.47.060; repealing RCW 43.72.180; providing an effective date; providing an expiration date; and declaring an emergency."

Signed by Representatives Dyer, Chairman; Backlund, Vice Chairman; Hymes, Vice Chairman; Casada; Crouse; Morris; Sherstad and Skinner.

MINORITY recommendation: Without recommendation. Signed by Representatives Dellwo, Ranking Minority Member; Cody, Assistant Ranking Minority Member; and Conway.

Voting Yea: Representatives Backlund, Casada, Crouse, Dyer, Hymes, Morris, Sherstad, and Skinner.

Voting Nay: Representatives Cody, Conway and Dellwo.

Passed to Committee on Rules for second reading.

MOTION

On motion of Representative Foreman, the bills listed on today's committee reports under the fifth order of business were referred to the committees so designated with the exception of House Bill No. 1028.

MOTION

Representative Appelwick moved that the House re-refer House Bill No. 1028 to the Committee on Finance.

Representative Appelwick spoke in favor of the motion and Representative Dyer spoke against the motion.

Representative Appelwick again spoke in favor of the motion and Representative Dyer again spoke against it.

The motion to re-refer House Bill No. 1028 to the Committee on Finance failed.

House Bill No. 1028 was referred to the Rules Committee.

On motion of Representative Foreman, the House reverted to the fourth order of business.

MOTION

On motion of Representative Foreman, the rules were suspended and Engrossed Senate Concurrent Resolution No. 8403 was advanced to second reading and read the second time in full.

SECOND READING

ENGROSSED SENATE CONCURRENT RESOLUTION NO. 8403, by Senators Snyder, Prince and Winsley

Recognizing the "Old Timers" reunion.

The resolution was read the second time.

On motion of Representative Foreman, the rules were suspended, the second reading considered the third and the resolution was placed on final adoption.

Engrossed Senate Concurrent Resolution No. 8403 was adopted.

MOTION

On motion of Representative Foreman, Senate Bill No. 5038 was advanced to the second reading calendar.

There being no objection, the House advanced to the eighth order of business.

MOTION

On motion of Representative Foreman, House Bill No. 1417 was re-referred from the Committee on Law & Justice to the Committee on Children & Family Services.

The Speaker introduces Speaker Pro Tempore, John L. O'Brien, Emeritus, to preside over House Resolution No. 4609.

HOUSE RESOLUTION NO. 95-4609, by Representatives Chopp, Jacobsen, Thibaudeau, Cody, Dickerson, Regala, Sommers, Valle, Tokuda, Patterson, Poulsen, Ebersole, Mason, Rust, Cole, Veloria, Robertson and Costa

WHEREAS, It is the policy of the Legislature to recognize excellence in all fields of endeavor; and

WHEREAS, The O'Dea High School Irish football team, from Seattle, won the 1994 Class AA State Football Championship; and

WHEREAS, The O'Dea Football coaches showed leadership and skill in focusing their team on accomplishing their goal of winning the State AA Football Championship; and

WHEREAS, Captains Brian Tell, Nick Stefonick, Andy Carroll, Mike Bailly, and Joe Forest contributed greatly to winning the Class AA Championship and finishing the season with a record of 13-0; and

WHEREAS, The Fighting Irish team wishes to acknowledge the dedication of senior manager Kevin O'Leary for his loyalty and contributions to the O'Dea football program;

NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the State of Washington recognize and honor the O'Dea High School Irish football team and Coach Monte Kohler for their accomplishments; and

BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Chief Clerk of the House of Representatives to Coach Monte Kohler, to the members of the O'Dea Irish football team, and to the principal and faculty of O'Dea High School.

Representative Chopp moved adoption of the resolution.

Representatives Chopp, Mason, Thibaudeau, Ebersole, Jacobsen, Tokuda and Crouse spoke in favor of adoption of the resolution.

House Resolution No. 4609 was adopted.

The Speaker assumed the chair.

HOUSE RESOLUTION NO. 95-4614, by Representatives Sehlin, Beeksma, Hymes, Quall, Robertson and Costa

WHEREAS, It is the policy of the Washington State Legislature to recognize excellence in all fields of endeavor; and

WHEREAS, Max McYoung has exhibited the highest level of excellence in his commitment and service to the citizens of Skagit County and the State of Washington; and

WHEREAS, Max McYoung shares his excellence and commitment to service with his spouse of thirty-one years, Mary McYoung; and

WHEREAS, Max McYoung's commitment and service to his fellow citizens has a long and extended history, demonstrated, in part, by his proud and valiant service of twenty-two years in the United States Navy; and

WHEREAS, Max McYoung's commitment and service to his fellow citizens is exemplified by his tireless and unselfish devotion to preserving the natural resources of Skagit County and the State of Washington, for the continued use and enjoyment by all citizens; and

WHEREAS, Max McYoung's contributions to preserving the bounty and beauty of our state resources have been extensive, with contributions spanning over three decades; and

WHEREAS, Max McYoung's lengthy, worthy, and noble efforts to preserve our natural resources have focused on the ecosystem of the Skagit River watershed for fish and wildlife habitat, with particular expertise and emphasis on salmon and steelhead trout; and

WHEREAS, Max McYoung has resolutely, adeptly, and expertly educated public officials, from all levels of government, federal, state, and local, in order that they better serve the citizens they represent, in the particular endowments and attributes of the natural resources in Skagit County; and

WHEREAS, Max McYoung's efforts have been well recognized by the community at large, with appearances on such television programs as "Northwest Focus," "Top Story," and the "Today Show;" and

WHEREAS, Max McYoung's determination, motivation, talents, and contributions have earned him well-deserved community recognition, including receiving the Outstanding River Advocate Award in 1991, the Jefferson Award in 1992, as well as the Giraffe Project Commendation;

NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the State of Washington honor Max McYoung for the dedicated service to his community and the State of Washington, for the outstanding example of diligence, commitment, and excellence that he has set for others, and that his future endeavors continue to inspire others to action and resolve; and

BE IT FURTHER RESOLVED, That copies of this Resolution be immediately transmitted by the Chief Clerk of the House of Representatives to Max McYoung.

Representative Sehlin moved adoption of the resolution.

Representatives Sehlin and Quall spoke in favor of adoption of the resolution.

House Resolution No. 4614 was adopted.

There being no objection, the House reverted to the sixth order of business.

The Speaker declared the House to be at ease.

The Speaker called the House to order.

SECOND READING

SENATE BILL NO. 5038, by Senator Quigley

Extending time periods for certain health care reform activities.

The bill was read the second time. Committee on Health Care recommendation: Do pass as amended. (For committee amendment see today's Journal.)

Representative Dyer moved that the committee amendment not be adopted.

Representative Dellwo spoke in favor of not adopting the committee amendment.

The committee amendment was not adopted.

On motion of Representative Foreman, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Dyer and Dellwo spoke in favor of passage of the bill.

MOTION

On motion of Representative Brown, Representative Ogden was excused.

The Speaker stated the question before the House to be final passage of Senate Bill No. 5038.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5038 and the bill passed the House by the following vote: Yeas - 96, Nays - 0, Absent - 0, Excused - 2.

Voting yea: Representatives Appelwick, Backlund, Ballasiotes, Basich, Beeksma, Benton, Blanton, Boldt, Brown, Brumsickle, Buck, Cairnes, Campbell, Carlson, Carrell, Casada, Chandler, Chappell, Chopp, Clements, Cody, Cole, Conway, Cooke, Costa, Crouse, Dellwo, Delvin, Dickerson, Dyer, Ebersole, Elliot, Fisher, G., Fisher, R., Foreman, Fuhrman, Goldsmith, Grant, Hankins, Hargrove, Hatfield, Hickel, Honeyford, Horn, Huff, Hymes, Jacobsen, Johnson, Kessler, Koster, Kremen, Lambert, Lisk, Mason, Mastin, McMahan, McMorris, Mielke, Mitchell, Morris, Mulliken, Padden, Patterson, Pelesky, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Rust, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, Stevens, Talcott, Thibaudeau, Thomas, B., Thomas, L., Thompson, Tokuda, Valle, Van Luven, Veloria, Wolfe and Mr. Speaker - 96.

Excused: Representatives Ogden and Silver - 2.

Senate Bill No. 5038, having received the constitutional majority, was declared passed.

SUBSTITUTE HOUSE BILL NO. 1010, by House Committee on Government Operations (originally sponsored by Representatives Reams, Horn, Lisk, Cairnes, Dyer, Van Luven, Ballasiotes, Buck, Casada, D. Schmidt, B. Thomas, Chandler, L. Thomas, Brumsickle, Sehlin, Sherstad, Carlson, Benton, Skinner, Kremen, Hargrove, Cooke, Delvin, Schoesler, Johnson, Thompson, Beeksma, Goldsmith, Radcliff, Hickel, Backlund, Crouse, Elliot, Pennington, Mastin, Carrell, Mitchell, K. Schmidt, Chappell, Basich, Grant, Smith, Robertson, Foreman, Honeyford, Pelesky, Blanton, Koster, Lambert, Mulliken, Boldt, McMorris, Clements, Fuhrman, Campbell, Sheldon, Huff, Mielke, Talcott, Silver, McMahan, Stevens, Morris and Hymes)

Implementing regulatory reform.

Substitute House Bill No. 1010 was read the second time.

Representative Schoesler moved adoption of the following amendment by Representative Schoesler:

On page 3, after line 4, insert the following:

"NEW SECTION. Sec. 104. A new section is added to chapter 43.23 RCW to read as follows:

The director of agriculture may adopt, in accordance with chapter 34.05 RCW, rules or policy statements, other than emergency rules, only:

(1) As specifically required by federal law, and only to the extent specifically required; or

(2) As specifically authorized, and only to the extent specifically authorized, by the legislature."

Representatives Schoesler, Honeyford, Mulliken, Chandler and Dyer spoke in favor of adoption of the amendment.

Representatives Rust, Romero, Cole, Brown and Conway spoke against it.

Representative Schoesler again spoke in favor of adoption of the amendment.

The amendment was adopted.

Representative Reams moved adoption of the following amendment by Representative Reams:

On page 16, line 17, after "law" insert "as it existed on January 1, 1995,"

Representatives Reams and Rust spoke in favor of adoption of the amendment.

The amendment was adopted.

Representative Schoesler moved adoption of the following amendment by Representative Schoesler:

On page 18, line 28, after "services," insert "department of agriculture,"

Representatives Schoesler and Koster spoke in favor of adoption of the amendment and Representative Rust spoke against it.

The amendment was adopted.

Representative Reams moved adoption of the following amendment by Representative Reams:

On page 34, beginning on line 23, after "committee" strike all material through "authority" on line 24

Representatives Reams and Rust spoke in favor of adoption of the amendment.

The amendment was adopted.

Representative Schoesler moved adoption of the following amendment by Representative Schoesler:

On page 39, line 3, after "health," insert "agriculture,"

On page 39, line 9, after "health," insert "agriculture,"

Representative Schoesler spoke in favor of adoption of the amendment and Representative Rust spoke against it.

The amendment was adopted.

Representative Rust moved adoption of the following amendment by Representatives Rust and Mastin:

Strike everything after the enacting clause and insert the following:

"PART I - RULE-MAKING AUTHORITY

NEW SECTION. Sec. 101. The legislature finds that the volume and complexity of state agency rules has increased to the point that new rule-making procedures are necessary. Significant rules should undergo a more in-depth analysis and differences from federal law should be justified. An expedited process for the repeal of unnecessary agency rules should be established. Pilot and negotiated rule-making procedures should be clarified. A standardized format for petitions to adopt, amend, or repeal a rule should be developed, as well as a process for the appeal of these agency decisions to the governor. The joint administrative rules review committee should be strengthened. Fees and expenses should be awarded to qualified parties successfully challenging a rule. To accomplish these goals, the legislature intends to modify the rule-making provisions of the administrative procedure act and the requirements of the regulatory fairness act.

NEW SECTION. Sec. 102. A new section is added to chapter 34.05 RCW under the subchapter heading Part III to read as follows:

(1) Before adopting a rule described in subsection (4) of this section, an agency shall:

(a) Clearly state in detail the general goals and specific objectives of the statute that the rule implements and the specific objectives that the agency seeks to achieve;

(b) Determine that the rule is needed to achieve the general goals and specific objectives stated under (a) of this subsection, and analyze alternatives to rule making and the consequences of not adopting the rule;

(c) Determine that the probable benefits of the rule are greater than its probable costs, taking into account both the qualitative and quantitative benefits and costs and the specific directives of the statute being implemented;

(d) Determine, after considering alternative versions of the rule and the analysis required under (b) and (c) of this subsection, that the rule being adopted is the least burdensome alternative for those required to comply with the rule that will achieve the general goals and the specific objectives stated under (a) of this subsection;

(e) Determine that the rule does not require those to whom it applies to take an action that violates requirements of another federal or state law;

(f) Coordinate the rule, to the maximum extent practicable, with other federal, state, and local laws applicable to the same circumstances and list, by citation, duplicative, inconsistent, or conflicting laws;

(g) Describe the process by which local governments will be notified of the subject of possible rule making and describe the process for coordinating the rule with local ordinances applicable to the same circumstances;

(h) Determine that the rule does not impose more stringent performance requirements on private entities than on public entities unless required to do so by federal or state law;

(i) Determine if the rule differs from any applicable federal regulation or statute and, if so, determine that the difference is justified by the following:

(i) State statutory authority that explicitly allows the agency to differ from federal standards; or

(ii) Substantial evidence that the difference is necessary to achieve the specific objectives of the authorizing state statute;

(j) Describe how the agency will monitor and evaluate on an ongoing basis whether the rule in fact achieves the general goals and specific objectives stated under (a) of this subsection, including, to the maximum extent practicable, the use of interim milestones to assess progress and the use of objectively measurable outcomes;

(k) Describe how the agency will implement and enforce the rule and encourage voluntary compliance with the rule; and

(l) Describe which resources the agency intends to use to implement the rule.

(2) Before adopting a rule, the agency shall place evidence in the rule-making file documenting agency compliance with the requirement of subsection (1) of this section. Agency determinations under subsection (1)(e) and (i) of this section shall each be supported by substantial evidence. Agency compliance with the requirements of subsection (1)(a) through (d), (f), (g), (h), (j), (k), and (l) of this section shall, as a whole, be supported by substantial evidence.

(3) Before adopting a rule described in subsection (5) of this section, an agency shall include in the rule-making file a written plan that describes:

(a) The methods the agency will use in making a reasonable attempt to notify those to whom the rule applies of the adoption of the rule and how they may get more information on how to comply with the rule; and

(b) How the agency will provide adequate sources of information and technical assistance to those to whom the rule applies to assist them in voluntarily complying with the rule.

(4) For rules implementing statutes enacted after the effective date of this section, except emergency rules adopted pursuant to RCW 34.05.350, an agency may not rely solely on the statute's statement of intent or purpose, or on the enabling provisions of the statute establishing the agency, or on any combination of such provisions, for its statutory authority to adopt the rule. An agency may use the statement of intent or purpose or the agency enabling provisions to interpret ambiguities in a statute's other provisions.

(5)(a) Subsections (1) through (3) of this section shall apply only to:

(i) Significant legislative rules of the departments of ecology, labor and industries, and revenue, and the employment security department, and to significant legislative rules of the department of fish and wildlife implementing chapter 75.20 RCW; and

(ii) Legislative rules of any agency, if such rules are designated as significant by the joint administrative rules review committee pursuant to (d) of this subsection.

(b) Notwithstanding (a) of this subsection, subsections (1) through (3) of this section shall not apply to:

(i) Emergency rules adopted pursuant to RCW 34.05.350;

(ii) Rules relating to internal governmental operations;

(iii) Rules adopting or incorporating by reference without material change federal statutes or rules, rules of other Washington state agencies, shoreline master programs, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, as long as the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule;

(iv) Rules that simply correct typographical errors, make address or name changes, clarify language without changing intent, or conform language in the rule to mandated statutory changes or judicial decisions, as long as the need for conformance is specific; or

(v) Rules that set or adjust fees or rates pursuant to legislative standards.

(i) A "procedural rule" is a rule that establishes, alters, or revokes (A) any procedure, practice, or requirement relating to any agency hearings, or (B) any filing or related process requirement for making application to an agency for a license.

(ii) An "interpretive rule" is a rule, the violation of which does not subject a person to a penalty or sanction, that sets forth the agency̓s interpretation of statutory provisions it administers.

(iii) A "legislative rule" includes a rule other than a procedural or interpretive rule that (A) adopts substantive provisions of law pursuant to delegated legislative authority, the violation of which subjects a violator of such rule to a penalty or sanction, or (B) establishes, alters, or revokes any qualification or standard for the issuance, suspension, or revocation of a license.

(iv) A legislative rule is "significant" if it (A) adopts a new policy or regulatory program, (B) establishes a new set of qualifications or standards for the issuance, suspension, or revocation of a license, (C) makes significant amendments to an existing policy or regulatory program or existing qualification or standard for the issuance, suspension, or revocation of a license that likely are to generate controversy, (D) is designated as such by the agency, or (E) is designated as such by the joint administrative rules review committee pursuant to (d) of this subsection.

(d) At the time of filing a notice of proposed rule making pursuant to RCW 34.05.320, an agency shall designate whether it considers the rule contemplated to be developed a significant legislative rule and shall so inform the joint administrative rules review committee of that designation by providing to that committee a copy of that notice. The joint administrative rules review committee by a majority vote within thirty days of receipt of the notice may designate the contemplated rule as significant and so inform the agency.

(e) An agency may voluntarily adopt a rule other than a significant legislative rule under the factors listed in subsection (1) of this section. Such a decision by the agency shall be included in the filing of the notice of proposed rule making made pursuant to RCW 34.05.320.

(6) By January 31, 1996, and by January 31st of each even-numbered year thereafter, the office of financial management, after consulting with state agencies, and business, labor, and environmental organizations, shall report to the governor and the legislature regarding the effects of this section on the regulatory system in this state. The report shall document:

(a) The rules proposed to which this section applied and to the extent possible, how compliance with this section affected the substance of the rule, if any, that the agency ultimately adopted;

(b) The costs incurred by state agencies in complying with this section;

(c) Any legal action maintained based upon the alleged failure of any agency to comply with this section, the costs to the state of such action, and the result;

(d) The extent to which this section has resulted in the increased inappropriate use by the agencies of policy statements and guidelines in place of rules;

(e) The extent to which this section has adversely affected the capacity of agencies to fulfill their legislatively prescribed mission;

(f) The extent to which this section has improved the acceptability of state rules to those regulated; and

(g) Any other information considered by the office of financial management to be useful in evaluating the effect of this section.

(7) This section expires June 30, 2000.

NEW SECTION. Sec. 103. A new section is added to chapter 34.05 RCW under the subchapter heading Part III to read as follows:

(1) Not later than June 30th of each year, each agency shall submit to the code reviser, according to procedures and time lines established by the code reviser, rules that it determines should be repealed by the expedited repeal procedures provided for in this section. An agency shall file a copy of a preproposal notice of intent, as provided in RCW 34.05.310(1), that identifies the rule as one that is proposed for expedited repeal.

(2) An agency may propose the expedited repeal of rules meeting one or more of the following criteria:

(a) The statute on which the rule is based has been repealed and has not been replaced by another statute providing statutory authority for the rule;

(b) The statute on which the rule is based has been declared unconstitutional by a court with jurisdiction, there is a final judgment, and no statute has been enacted to replace the unconstitutional statute;

(d) Other rules of the agency or of another agency govern the same activity as the rule, making the rule redundant.

(3) The agency shall also send a copy of the preproposal notice of intent to any person who has requested notification of copies of proposals for the expedited repeal of rules or of agency rule making. The preproposal notice of intent shall include a statement that any person who objects to the repeal of the rule must file a written objection to the repeal within thirty days after the preproposal notice of intent is published. The notice of intent shall also include an explanation of the reasons the agency believes the expedited repeal of the rule is appropriate.

(4) The code reviser shall publish all rules proposed for expedited repeal in a separate section of a regular edition of the Washington state register or in a special edition of the Washington state register. The publication shall be not later than July 31st, or in the first register published after that date.

(5) Any person may file a written objection to the expedited repeal of a rule. The notice shall be filed with the agency rules coordinator within thirty days after the notice of intent has been published in the Washington state register. The written objection need not state any reason for objecting to the expedited repeal of the rule.

(6) If no written objections to the expedited repeal of a rule are filed with the agency within thirty days after the preproposal notice of intent is published, the agency may enter an order repealing the rule without further notice or an opportunity for a public hearing. The order shall be published in the manner required by this chapter for any other order of the agency adopting, amending, or repealing a rule. If a written objection to the expedited repeal of the rule is filed with the agency within thirty days after the notice of intent has been published, the preproposal notice of intent published pursuant to this section shall be considered a preproposal notice of intent for the purposes of RCW 34.05.310(1) and the agency may initiate rule adoption proceedings in accordance with the provisions of this chapter.

Sec. 104. RCW 34.05.310 and 1994 c 249 s 1 are each amended to read as follows:

(1) Unless an agency makes a determination pursuant to subsection (3) of this section, to meet the intent of providing greater public access to administrative rule making and to promote consensus among interested parties, ((agencies)) it shall solicit comments from the public on a subject of possible rule making before publication of a notice of proposed rule adoption under RCW 34.05.320. The agency shall prepare a statement of intent that:

(a) States the specific statutory authority for the new rule;

(b) Identifies the reasons the new rule is needed or the issue the agency is exploring to determine if a new rule is needed;

(d) Describes the process by which the rule will be developed, including, but not limited to, negotiated rule making((,)) or pilot rule making((, or agency study)); and

(e) Specifies the process by which interested parties can effectively participate in the formulation of the new rule.

The statement of intent shall be filed with the code reviser for publication in the state register and shall be ((sent)) provided to any party that has requested receipt of the agency's statements of intent.

(2) Agencies are encouraged to develop and use new procedures for reaching agreement among interested parties before publication of notice and the adoption hearing on a proposed rule. Examples of new procedures include, but are not limited to:

(a) Negotiated rule making which ((includes:

(i) Identifying individuals and organizations that have a recognized interest in or will be significantly affected by the adoption of the proposed rule;

(ii) Soliciting participation by persons who are capable, willing, and appropriately authorized to enter into such negotiations;

(iii) Assuring that participants fully recognize the consequences of not participating in the process, are committed to negotiate in good faith, and recognize the alternatives available to other parties;

(iv) Establishing guidelines to encourage consideration of all pertinent issues, to set reasonable completion deadlines, and to provide fair and objective settlement of disputes that may arise;

(v) Agreeing on a reasonable time period during which the agency will be bound to the rule resulting from the negotiations without substantive amendment; and

(vi) Providing a mechanism by which one or more parties may withdraw from the process or the negotiations may be terminated if it appears that consensus cannot be reached on a draft rule that accommodates the needs of the agency, interested parties, and the general public and conforms to the legislative intent of the statute that the rule is intended to implement)) means a process by which representatives of an agency and of the interests who are affected by a subject of rule making seek to reach consensus on the terms of the proposed rule and on the process by which it is negotiated; and

(b) Pilot rule making which includes testing the ((draft of a proposed rule)) feasibility of complying with or administering new draft rules or draft revisions to adopted rules through the use of volunteer pilot ((study)) groups in various areas and circumstances, as provided in RCW 34.05.313.

(3)(((a) An agency must make a determination whether negotiated rule making, pilot rule making, or another process for generating participation from interested parties prior to development of the rule is appropriate.

(b) An agency must)) If the agency determines that an opportunity for interested parties to participate in the rule-making process before publication of the proposed rule is not necessary to achieve the objectives of subsection (1) of this section, not later than the date it publishes the proposed rule for comment pursuant to RCW 34.05.320 it shall include ((a written justification)) in the rule-making file ((if an opportunity for interested parties to participate in the rule-making process prior to publication of the proposed rule has not been provided)) a written statement explaining the reasons for not providing such an opportunity and shall mail the statement to any person who has requested copies of the agency's statements of intent.

(4) The provisions of this section do not apply to:

(a) The adoption of an emergency rule pursuant to RCW 34.05.350;

(b) The adoption of a rule relating to internal governmental operations;

(c) The amendment of a rule that had adopted or incorporated by reference without material change federal statutes or rules, rules of other Washington state agencies, laws or rules of local governments, or national consensus codes that generally establish industry standards, and that simply revise the version of such adopted or incorporated material; or

(d) The adoption of a rule that simply corrects typographical errors, makes address or name changes, clarifies language without changing intent, or conforms language in the rule to statutory changes or judicial decisions.

Sec. 105. RCW 34.05.313 and 1993 c 202 s 4 are each amended to read as follows:

((If,)) (1) During the development of a rule or after its adoption, an agency ((determines that implementation may produce unreasonable economic, procedural, or technical burdens, agencies are encouraged to)) may develop methods for measuring or testing the feasibility of ((compliance)) complying with or administering the rule((, including the use of voluntary pilot study groups)) and for identifying simple, efficient, and economical alternatives for achieving the goal of the rule. ((Measuring and testing methods should emphasize)) A pilot project shall include public notice, participation by ((persons who have a recognized interest in or are significantly affected by the adoption of the proposed rule)) volunteers who are or will be subject to the rule, a high level of involvement from agency management, ((consensus on issues and procedures among participants in the pilot group, assurance of fairness, and)) reasonable completion dates, and a process by which one or more parties may withdraw from the process or the process may be terminated ((if consensus cannot be reached on the rule)). Volunteers who agree to test a rule and attempt to meet the requirements of the draft rule, to report periodically to the proposing agency on the extent of their ability to meet the requirements of the draft rule, and to make recommendations for improving the draft rule shall not be obligated to comply fully with the rule being tested nor be subject to any enforcement action or other sanction for failing to comply with the requirements of the draft rule.

(2) An agency conducting a pilot rule project authorized under subsection (1) of this section may waive one or more provisions of agency rules otherwise applicable to participants in such a pilot project if the agency first determines that such a waiver is in the public interest and necessary to conduct the project. Such a waiver may be only for a stated period of time, not to exceed the duration of the project.

(3) The findings of the pilot project should be widely shared and, where appropriate, adopted as amendments to the rule.

(4) If an agency conducts a pilot rule project in lieu of meeting the requirements of the regulatory fairness act, chapter 19.85 RCW, the agency shall ensure the following conditions are met:

(a) If over ten small businesses are affected, there shall be at least ten small businesses in the test group and at least one-half of the volunteers participating in the pilot test group shall be small businesses.

(b)(i) If there are at least one hundred businesses affected, the participation by small businesses in the test group shall be as follows:

(A) Not less than twenty percent of the small businesses must employ twenty-six to fifty employees;

(B) Not less than twenty percent of the small businesses must employ eleven to twenty-six employees, and

(ii) If there do not exist a sufficient number of small businesses in each size category set forth in (b)(i) of this subsection willing to participate in the pilot project to meet the minimum requirements of that subsection, then the agency must comply with this section to the maximum extent practicable.

(d) Before filing the notice of proposed rule making pursuant to RCW 34.05.320, the agency must prepare a report of the pilot rule project that includes:

(i) A description of the difficulties small businesses had in complying with the pilot rule;

(ii) A list of the recommended revisions to the rule to make compliance with the rule easier or to reduce the cost of compliance with the rule by the small businesses participating in the pilot rule project;

(iii) A written statement explaining the options it considered to resolve each of the difficulties described and a statement explaining its reasons for not including a recommendation by the pilot test group to revise the rule; and

(iv) If the agency was unable to meet the requirements set forth in (b)(i) of this subsection, a written explanation of why it was unable to do so and the steps the agency took to include small businesses in the pilot project.

Sec. 106. RCW 34.05.325 and 1994 c 249 s 7 are each amended to read as follows:

(1) The agency shall make a good faith effort to insure that the information on the proposed rule published pursuant to RCW 34.05.320 accurately reflects the rule to be presented and considered at the oral hearing on the rule. Written comment about a proposed rule, including supporting data, shall be accepted by an agency if received no later than the time and date specified in the notice, or such later time and date established at the rule-making hearing.

(2) The agency shall provide an opportunity for oral comment to be received by the agency in a rule-making hearing.

(3) If the agency possesses equipment capable of receiving telefacsimile transmissions or recorded telephonic communications, the agency may provide in its notice of hearing filed under RCW 34.05.320 that interested parties may comment on proposed rules by these means. If the agency chooses to receive comments by these means, the notice of hearing shall provide instructions for making such comments, including, but not limited to, appropriate telephone numbers to be used; the date and time by which comments must be received; required methods to verify the receipt and authenticity of the comments; and any limitations on the number of pages for telefacsimile transmission comments and on the minutes of tape recorded comments. The agency shall accept comments received by these means for inclusion in the official record if the comments are made in accordance with the agency's instructions.

(4) The agency head, a member of the agency head, or a presiding officer designated by the agency head shall preside at the rule-making hearing. Rule-making hearings shall be open to the public. The agency shall cause a record to be made of the hearing by stenographic, mechanical, or electronic means. Unless the agency head presides or is present at substantially all the hearings, the presiding official shall prepare a memorandum for consideration by the agency head, summarizing the contents of the presentations made at the rule-making hearing. The summarizing memorandum is a public document and shall be made available to any person in accordance with chapter 42.17 RCW.

(5) Rule-making hearings are legislative in character and shall be reasonably conducted by the presiding official to afford interested persons the opportunity to present comment. Rule-making hearings may be continued to a later time and place established on the record without publication of further notice under RCW 34.05.320.

(6) ((Before the adoption of a final rule)) (a) Except as otherwise provided in (c) of this subsection, at the time it files an adopted rule with the code reviser, or within thirty days thereafter, an agency shall prepare a ((written summary of)) concise explanatory statement of the rule:

(i) Identifying the agency's reasons for adopting the rule;

(ii) Describing differences between the text of the proposed rule as published in the register and the text of the rule as adopted, other than editing changes, stating the reasons for differences; and

(iii) Summarizing all comments received regarding the proposed rule, and ((a substantive response)) responding to the comments by category or subject matter, indicating how the final rule reflects agency consideration of the comments, or why it fails to do so.

(b) The agency shall provide the ((written summary and response)) concise explanatory statement to any person upon request or from whom the agency received comment.

Sec. 107. RCW 34.05.330 and 1988 c 288 s 305 are each amended to read as follows:

(1) Any person may petition an agency requesting the adoption, amendment, or repeal of any rule. ((Each agency may)) The office of financial management shall prescribe by rule the ((form)) format for such petitions and the procedure for their submission, consideration, and disposition and provide a standard form that may be used to petition any agency. Within sixty days after submission of a petition, the agency shall (((1))) either (a) deny the petition in writing, stating (i) its reasons for the denial, specifically addressing the concerns raised by the petitioner, and, where appropriate, (ii) the alternative means by which it will address the concerns raised by the petitioner, or (((2))) (b) initiate rule-making proceedings in accordance with this chapter.

(2) If an agency denies a petition to repeal or amend a rule submitted under subsection (1) of this section, the petitioner, within thirty days of the denial, may appeal the denial to the governor. The governor shall immediately file notice of the appeal with the code reviser for publication in the Washington state register. Within forty-five days after receiving the appeal, the governor either (a) shall deny the petition in writing, stating (i) his or her reasons for the denial, specifically addressing the concerns raised by the petitioner, and, (ii) where appropriate, the alternative means by which he or she will address the concerns raised by the petitioner; (b) for agencies listed in RCW 43.17.010, shall direct the agency to initiate rule-making proceedings in accordance with this chapter; (c) for agencies not listed in RCW 43.17.010, shall recommend that the agency initiate rule-making proceedings in accordance with this chapter; or (d) to the extent the agency itself would have authority, may rescind all or a severable portion of a rule of an agency named in RCW 43.17.010. In exercising his or her authority, the governor shall act by an executive order that is subject to the provisions of this chapter applicable to the adoption and effectiveness of a rule. The governor's response to the appeal shall be published in the Washington state register and copies shall be submitted to the chief clerk of the house of representatives and the secretary of the senate.

(3) In petitioning for repeal or amendment of a rule under this section, a person is encouraged to address, among other concerns:

(a) Whether the rule is authorized;

(b) Whether the rule is needed;

(d) Whether alternatives to the rule exist that will serve the same purpose at less cost;

(e) Whether the rule applies differently to public and private entities;

(f) Whether the rule serves the purposes for which it was adopted;

(g) Whether the costs imposed by the rule are unreasonable; and

(h) Whether the rule is clearly and simply stated.

(4) The business assistance center and the office of financial management shall coordinate efforts among agencies to inform the public about the existence of this rules review process.

(5) The office of financial management shall initiate the rule making required by subsection (1) of this section by September 1, 1995.

Sec. 108. RCW 34.05.375 and 1988 c 288 s 314 are each amended to read as follows:

(1) No rule proposed after July 1, 1989, is valid unless it is adopted in substantial compliance with RCW 34.05.310 through 34.05.395. Inadvertent failure to mail notice of a proposed rule adoption to any person as required by RCW 34.05.320(3) does not invalidate a rule. ((No action based upon this section may be maintained to contest the validity of any rule unless it is commenced within two years after the effective date of the rule.))

(2)(a) Except as otherwise provided in (b) of this subsection, an action based upon this section to contest the validity of a rule shall be commenced within two years after the effective date of the rule.

(b) An action based upon a claim that an agency failed to comply with section 102 of this act shall be commenced within ninety days after the effective date of the rule being contested. Nothing in this subsection limits the authority of a court to review a rule under RCW 34.05.570(2).

NEW SECTION. Sec. 109. A new section is added to chapter 19.85 RCW to read as follows:

(1) Unless an agency receives a written objection to the expedited repeal of a rule, this chapter does not apply to a rule proposed for expedited repeal pursuant to section 103 of this act. If an agency receives a written objection to expedited repeal of the rule, this chapter applies to the rule-making proceeding.

(2) This chapter does not apply to the adoption of a rule described in RCW 34.05.310(4).

(3) An agency is not required to prepare a separate statement under this chapter if it prepared an analysis under section 102(1) of this act that makes the findings required and includes the mitigation required by this chapter and designates that part of the analysis that meets the requirements of this chapter.

Sec. 110. RCW 19.85.030 and 1994 c 249 s 11 are each amended to read as follows:

(1) In the adoption of any rule pursuant to RCW 34.05.320 that will impose more than minor costs on more than twenty percent of all industries, or more than ten percent of any one industry, the adopting agency:

(a) Shall reduce the economic impact of the rule on small business by doing one or more of the following when it is legal and feasible in meeting the stated objective of the statutes which are the basis of the proposed rule:

(i) Establish differing compliance or reporting requirements or timetables for small businesses;

(ii) Clarify, consolidate, or simplify the compliance and reporting requirements under the rule for small businesses;

(iii) Establish performance rather than design standards;

(iv) Exempt small businesses from any or all requirements of the rule;

(v) Reduce or modify fine schedules for noncompliance; and

(vi) Other mitigation techniques;

(b) Before filing notice of a proposed rule, shall either:

(i) Prepare a small business economic impact statement in accordance with RCW 19.85.040 and file notice of how the person can obtain the statement with the code reviser as part of the notice required under RCW 34.05.320; or

(ii) Complete the pilot rule process as defined by RCW 34.05.313 before filing the notice of a proposed rule.

(2) If requested to do so by a majority vote of the joint administrative rules review committee within thirty days after notice of the proposed rule is published in the state register, an agency shall prepare a small business economic impact statement on the proposed rule before adoption of the rule. Upon completion, an agency shall provide a copy of the small business economic impact statement to any person requesting it.

(3) An agency may request assistance from the business assistance center in the preparation of the small business economic impact statement.

(4) The business assistance center shall develop guidelines to assist agencies in determining whether a proposed rule will impose more than minor costs on businesses in an industry and therefore require preparation of a small business economic impact statement. The business assistance center may review an agency determination that a proposed rule will not impose such costs, and shall advise the joint administrative rules review committee on disputes involving agency determinations under this section.

Sec. 111. RCW 34.05.370 and 1994 c 249 s 2 are each amended to read as follows:

(1) Each agency shall maintain an official rule-making file for each rule that it (a) proposes by publication in the state register, or (b) adopts. The file and materials incorporated by reference shall be available for public inspection.

(2) The agency rule-making file shall contain all of the following:

(a) Copies of all publications in the state register with respect to the rule or the proceeding upon which the rule is based;

(b) Copies of any portions of the agency's public rule-making docket containing entries relating to the rule or the proceeding on which the rule is based;

(c) All written petitions, requests, submissions, and comments received by the agency and all other written material regarded by the agency as important to adoption of the rule or the proceeding on which the rule is based;

(d) Any official transcript of oral presentations made in the proceeding on which the rule is based or, if not transcribed, any tape recording or stenographic record of them, and any memorandum prepared by a presiding official summarizing the contents of those presentations;

(e) The concise explanatory statement required by RCW 34.05.355;

(f) All petitions for exceptions to, amendment of, or repeal or suspension of, the rule;

(g) Citations to data, factual information, studies, or reports on which the agency relies in the adoption of the rule, indicating where such data, factual information, studies, or reports are available for review by the public;

(h) The written summary and response required by RCW 34.05.325(6); ((and))

(i) Evidence that the rule complies with section 102 (1) and (2) of this act; and

(j) Any other material placed in the file by the agency.

(3) Internal agency documents are exempt from inclusion in the rule-making file under subsection (2) of this section to the extent they constitute preliminary drafts, notes, recommendations, and intra-agency memoranda in which opinions are expressed or policies formulated or recommended, except that a specific document is not exempt from inclusion when it is publicly cited by an agency in connection with its decision.

(4) Upon judicial review, the file required by this section constitutes the official agency rule-making file with respect to that rule. ((Unless otherwise required by another provision of law,)) The official agency rule-making file ((need not be)) is the exclusive basis for agency action on that rule.

Sec. 112. RCW 34.05.570 and 1989 c 175 s 27 are each amended to read as follows:

(1) Generally. Except to the extent that this chapter or another statute provides otherwise:

(a) The burden of demonstrating the invalidity of agency action is on the party asserting invalidity;

(b) The validity of agency action shall be determined in accordance with the standards of review provided in this section, as applied to the agency action at the time it was taken;

(c) The court shall make a separate and distinct ruling on each material issue on which the court's decision is based; and

(d) The court shall grant relief only if it determines that a person seeking judicial relief has been substantially prejudiced by the action complained of.

(2) Review of rules. (a) A rule may be reviewed by petition for declaratory judgment filed pursuant to this subsection or in the context of any other review proceeding under this section. In an action challenging the validity of a rule, the agency shall be made a party to the proceeding.

(b) The validity of any rule may be determined upon petition for a declaratory judgment addressed to the superior court of Thurston county, when it appears that the rule, or its threatened application, interferes with or impairs or immediately threatens to interfere with or impair the legal rights or privileges of the petitioner. The declaratory judgment order may be entered whether or not the petitioner has first requested the agency to pass upon the validity of the rule in question.

(c) In a proceeding involving review of a rule, the court shall declare the rule invalid only if it finds that: ((it)) The rule violates constitutional provisions((,)); the rule exceeds the statutory authority of the agency((,)); the rule was adopted without compliance with statutory rule-making procedures((, or could not conceivably have been the product of a rational decision-maker)); the rule is not supported by substantial evidence as required under section 102 (1) or (2) of this act; or the rule is arbitrary and capricious.

(3) Review of agency orders in adjudicative proceedings. The court shall grant relief from an agency order in an adjudicative proceeding only if it determines that:

(a) The order, or the statute or rule on which the order is based, is in violation of constitutional provisions on its face or as applied;

(b) The order is outside the statutory authority or jurisdiction of the agency conferred by any provision of law;

(c) The agency has engaged in unlawful procedure or decision-making process, or has failed to follow a prescribed procedure;

(d) The agency has erroneously interpreted or applied the law;

(e) The order is not supported by evidence that is substantial when viewed in light of the whole record before the court, which includes the agency record for judicial review, supplemented by any additional evidence received by the court under this chapter;

(f) The agency has not decided all issues requiring resolution by the agency;

(g) A motion for disqualification under RCW 34.05.425 or 34.12.050 was made and was improperly denied or, if no motion was made, facts are shown to support the grant of such a motion that were not known and were not reasonably discoverable by the challenging party at the appropriate time for making such a motion;

(h) The order is inconsistent with a rule of the agency unless the agency explains the inconsistency by stating facts and reasons to demonstrate a rational basis for inconsistency; or

(i) The order is arbitrary or capricious.

(4) Review of other agency action.

(a) All agency action not reviewable under subsection (2) or (3) of this section shall be reviewed under this subsection.

(b) A person whose rights are violated by an agency's failure to perform a duty that is required by law to be performed may file a petition for review pursuant to RCW 34.05.514, seeking an order pursuant to this subsection requiring performance. Within twenty days after service of the petition for review, the agency shall file and serve an answer to the petition, made in the same manner as an answer to a complaint in a civil action. The court may hear evidence, pursuant to RCW 34.05.562, on material issues of fact raised by the petition and answer.

(c) Relief for persons aggrieved by the performance of an agency action, including the exercise of discretion, or an action under (b) of this subsection can be granted only if the court determines that the action is:

(i) Unconstitutional;

(ii) Outside the statutory authority of the agency or the authority conferred by a provision of law;

(iii) Arbitrary or capricious; or

(iv) Taken by persons who were not properly constituted as agency officials lawfully entitled to take such action.

NEW SECTION. Sec. 113. RCW 34.05.355 and 1994 c 249 s 8 & 1988 c 288 s 310 are each repealed.PART II - TECHNICAL ASSISTANCE

NEW SECTION. Sec. 201. The legislature finds that, due to the volume and complexity of laws and rules it is appropriate for regulatory agencies to adopt programs and policies encouraging voluntary compliance by those affected by specific rules. The legislature recognizes that a cooperative partnership between agencies and regulated parties that emphasizes education and assistance before the imposition of penalties will achieve greater compliance with laws and rules and that most individuals and businesses who are subject to regulation will attempt to comply with the law, particularly if they are given sufficient information. In this context, enforcement should assure that the majority of a regulated community that complies with the law are not placed at a competitive disadvantage and that a continuing failure to comply that is within the control of a party who has received technical assistance is considered by an agency when it determines the amount of any civil penalty that is issued.

NEW SECTION. Sec. 202. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Civil penalty" means a monetary penalty administratively issued by a regulatory agency for noncompliance with state or federal law or rules. The term does not include any criminal penalty, damage assessments, wages, premiums, or taxes owed, or interest or late fees on any existing obligation.

(2) "Regulatory agency" means an agency as defined in RCW 34.05.010 that has the authority to issue civil penalties. The term does not include the state patrol or any institution of higher education as defined in RCW 28B.10.016.

(3) "Technical assistance" includes:

(a) Information on the laws, rules, and compliance methods and technologies applicable to the regulatory agency's programs;

(b) Information on methods to avoid compliance problems;

(d) Information on the mission, goals, and objectives of the program.

NEW SECTION. Sec. 203. All regulatory agencies shall develop programs to encourage voluntary compliance by providing technical assistance consistent with statutory requirements and the limits of the agency's budget. The programs shall include but are not limited to technical assistance visits.

NEW SECTION. Sec. 204. (1) For the purposes of this chapter, a technical assistance visit is a visit by a regulatory agency to a facility, business, or other location that:

(a) Has been requested or is voluntarily accepted; and

(b) Is declared by the regulatory agency at the beginning of the visit to be a technical assistance visit.

(2) A technical assistance visit also includes a consultative visit pursuant to RCW 49.17.250.

(3) During a technical assistance visit, or within a reasonable time thereafter, a regulatory agency shall inform the owner or operator of the facility of any violations of law or agency rules identified by the agency and provide technical assistance concerning compliance.

NEW SECTION. Sec. 205. The owner and operator shall be given a reasonable period of time to correct violations identified during a technical assistance visit before any civil penalty provided for by law is imposed for those violations. A regulatory agency may revisit a facility, business, or other location after a technical assistance visit and a reasonable period of time has passed to correct violations identified by the agency in writing and issue civil penalties as provided for by law for any uncorrected violations.

NEW SECTION. Sec. 206. A regulatory agency that observes a violation during a technical assistance visit may issue a civil penalty as provided for by law if: (1) The individual or business has previously been subject to an enforcement action for the same or similar type of violation of the same statute or rule or has been given previous notice of the same or similar type of violation of the same statute or rule; or (2) the issue involves sales taxes due to the state and the individual or business is not remitting previously collected sales taxes to the state; or (3) the violation has a probability of placing a person in danger of death or bodily harm, has a probability of causing more than minor environmental harm, or has a probability of causing physical damage to the property of another in an amount exceeding one thousand dollars.

NEW SECTION. Sec. 207. (1) If in the course of any site inspection or visit that is not a technical assistance visit, the department of ecology becomes aware of conditions that are not in compliance with applicable laws and rules enforced by the department and are not subject to civil penalties as provided for in section 208 of this act, the department may issue a notice of correction to the responsible party that shall include:

(a) A description of the condition that is not in compliance and a specific citation to the applicable law or rule;

(b) A statement of what is required to achieve compliance;

(d) Notice of the means to contact any technical assistance services provided by the department or others; and

(e) Notice of when, where, and to whom a request to extend the time to achieve compliance for good cause may be filed with the department.

(2) A notice of correction is not a formal enforcement action, is not subject to appeal, and is a public record.

(3) If the department issues a notice of correction, it shall not issue a civil penalty for the violations identified in the notice of correction unless the responsible party fails to comply with the notice.

NEW SECTION. Sec. 208. The department of ecology may issue a civil penalty provided for by law without first issuing a notice of correction if: (1) The person has previously been subject to an enforcement action for the same or similar type of violation of the same statute or rule or has been given previous notice of the same or similar type of violation of the same statute or rule; or (2) compliance is not achieved by the date established by the department in a previously issued notice of correction, if the department has responded to any request for review of such date by reaffirming the original date or establishing a new date; or (3) the violation has a probability of placing a person in danger of death or bodily harm, has a probability of causing more than minor environmental harm, or has a probability of causing physical damage to the property of another in an amount exceeding one thousand dollars.

NEW SECTION. Sec. 209. The provisions of sections 207 and 208 of this act affecting civil penalties issued by the department of ecology shall not apply to civil penalties for negligent discharge of oil as authorized under RCW 90.56.330 or to civil penalties as authorized under RCW 90.03.600 for unlawful use of water in violation of RCW 90.03.250 or 90.44.050.

NEW SECTION. Sec. 210. (1) Following a consultative visit pursuant to RCW 49.17.250, the department of labor and industries shall issue a report to the employer that the employer shall make available to its employees. The report shall contain:

(a) A description of the condition that is not in compliance and a specific citation to the applicable law or rule;

(b) A statement of what is required to achieve compliance;

(d) Notice of means to contact technical assistance services provided by the department; and

(e) Notice of when, where, and to whom a request to extend the time to achieve compliance for good cause may be filed with the department.

(2) Following a compliance inspection pursuant to RCW 49.17.120, the department of labor and industries shall issue a citation for violations of industrial safety and health standards. The citation shall not assess a penalty if the violations:

(a) Are determined not to be of a serious nature;

(b) Have not been previously cited;

(d) Do not have a mandatory penalty under chapter 49.17 RCW.

NEW SECTION. Sec. 211. The date for compliance established by the department of ecology or the department of labor and industries pursuant to section 207 or 210 of this act respectively shall provide for a reasonable time to achieve compliance. Any person receiving a notice of correction pursuant to section 207 of this act or a report or citation pursuant to section 210 of this act may request an extension of time to achieve compliance for good cause from the issuing department. Requests shall be submitted to the issuing department and responded to by the issuing department in writing in accordance with procedures specified by the issuing department in the notice, report, or citation.

NEW SECTION. Sec. 212. The departments of revenue and labor and industries and the employment security department shall undertake an educational program directed at those who have the most difficulty in determining their tax or premium liability. The departments may rely on information from internal data, trade associations, and businesses to determine which entities should be selected. The educational programs may include, but not be limited to, targeted informational fact sheets, self-audits, or workshops, and may be presented individually by the agency or in conjunction with other agencies.

NEW SECTION. Sec. 213. The department of revenue, the department of labor and industries in respect to its duties in Title 51 RCW, and the employment security department shall develop and administer a pilot voluntary audit program. Voluntary audits can be requested by businesses from any of these agencies according to guidelines established by each agency. No penalty assessments may be made against participants in such a program except when the agency determines that either a good faith effort has not been made by the taxpayer or premium payer to comply with the law or that the taxpayer has failed to remit previously collected sales taxes to the state. The persons conducting the voluntary audit shall provide the business undergoing the voluntary audit an audit report that describes errors or omissions found and future reporting instructions. This program does not relieve a business from past or future tax or premium obligations.

NEW SECTION. Sec. 214. The departments of revenue and labor and industries and the employment security department shall each review the penalties it issues related to taxes or premiums to determine if they are consistent and provide for waivers in appropriate circumstances. Each department shall report the results of its review to the legislature no later than December 1, 1995.

NEW SECTION. Sec. 215. Nothing in this chapter obligates a regulatory agency to conduct a technical assistance visit. The state and officers or employees of the state shall not be liable for damages to a person to the extent that liability is asserted to arise from providing technical assistance, or if liability is asserted to arise from the failure of the state or officers or employees of the state to provide technical assistance. This chapter does not limit the authority of any regulatory agency to take any enforcement action, other than a civil penalty, authorized by law. This chapter shall not limit a regulatory agency's authority to issue a civil penalty as authorized by law based upon a person's failure to comply with specific terms and conditions of any permit or license issued by the agency to that person.

NEW SECTION. Sec. 216. Agency rules, guidelines, and procedures necessary to implement this act shall be established and implemented expeditiously and not later than July 1, 1996.

NEW SECTION. Sec. 217. If a regulatory agency determines any part of this chapter to be in conflict with federal law or program requirements, in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, or in conflict with the requirements for eligibility of employers in this state for federal unemployment tax credits, the conflicting part of this chapter shall be inoperative solely to the extent of the conflict. Any rules under this chapter shall meet federal requirements that are a necessary condition to the receipt of federal funds by the state or the granting of federal unemployment tax credits to employers in this state.

NEW SECTION. Sec. 218. If notified by responsible federal officials of any conflict of this chapter with federal law or program requirements or with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the regulatory agency notified of the conflict shall actively seek to resolve the conflict. If the agency determines that the conflict cannot be resolved without loss of benefits or authority to the state, the agency shall notify the governor, the president of the senate, and the speaker of the house of representatives in writing within thirty days of making that determination.

NEW SECTION. Sec. 219. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 220. (1) By January 31, 1996, and by January 31st of each even-numbered year thereafter, the office of financial management, after consulting with state regulatory agencies, and business, labor, and environmental organizations, shall report to the governor and the legislature regarding the effects of this chapter on the regulatory system in this state. The report shall document:

(a) Technical assistance, including but not limited to technical assistance visits, provided by state regulatory agencies consistent with this chapter;

(b) Any rules adopted, guidelines developed, or training conducted to implement this chapter;

(c) Any changes in the appropriation, allocation, or expenditure of regulatory agency resources to implement this chapter;

(d) Any legal action against state regulatory agencies for any alleged failure to comply with this chapter, the costs to the state of the action, and the result;

(e) The extent to which this chapter has resulted in either an increase or decrease in regulatory agency use of civil penalties;

(f) The extent to which this chapter has contributed to any change in voluntary compliance with state statutes or rules;

(g) The extent to which this chapter has improved the acceptability or effectiveness of state regulatory procedures; and

(h) Any other information considered by the office of financial management to be useful in evaluating the effect of this chapter.

(2) This section shall expire June 30, 2000.

Sec. 221. RCW 18.104.155 and 1993 c 387 s 21 are each amended to read as follows:

(1) Except as provided in sections 207 through 209 of this act, the department of ecology may assess a civil penalty for a violation of this chapter or rules or orders of the department adopted or issued pursuant to it.

(2) There shall be three categories of violations: Minor, serious, and major.

(a) A minor violation is a violation that does not seriously threaten public health, safety, and the environment. Minor violations include, but are not limited to:

(i) Failure to submit completed start cards and well reports within the required time;

(ii) Failure to submit variance requests before construction;

(iii) Failure to submit well construction fees;

(iv) Failure to place a well identification tag on a new well; and

(v) Minor or reparable construction problems.

(b) A serious violation is a violation that poses a critical or serious threat to public health, safety, and the environment. Serious violations include, but are not limited to:

(i) Improper well construction;

(ii) Intentional and improper location or siting of a well;

(iii) Construction of a well without a required permit;

(iv) Violation of decommissioning requirements;

(v) Repeated minor violations; or

(vi) Construction of a well by a person whose license has expired or has been suspended for not more than ninety days.

(i) Without a license; or

(ii) After the person's license has been suspended for more than ninety days or revoked.

(3)(a) The penalty for a minor violation shall be not less than one hundred dollars and not more than five hundred dollars. Before the imposition of a penalty for a minor violation, the department may issue an order of noncompliance to provide an opportunity for mitigation or compliance.

(b) The penalty for a serious violation shall be not less than five hundred dollars and not more than five thousand dollars.

(c) The penalty for a major violation shall be not less than five thousand dollars and not more than ten thousand dollars.

(4) In determining the appropriate penalty under subsection (3) of this section the department shall consider whether the person:

(a) Has demonstrated a general disregard for public health and safety through the number and magnitude of the violations;

(b) Has demonstrated a disregard for the well construction laws or rules in repeated or continuous violations; or

(5) Penalties provided for in this section shall be imposed pursuant to RCW 43.21B.300. The department shall provide thirty days written notice of a violation as provided in RCW 43.21B.300(3).

(6) For informational purposes, a copy of the notice of violation, resulting from the improper construction of a well, that is sent to a water well contractor or water well construction operator, shall also be sent by the department to the well owner.

(7) Penalties collected by the department pursuant to this section shall be deposited in the reclamation account established by chapter 89.16 RCW. Subject to legislative appropriation, the penalties may be spent only for purposes related to the restoration and enhancement of ground water resources in the state.

Sec. 222. RCW 49.17.180 and 1991 c 108 s 1 are each amended to read as follows:

(1) Except as provided in section 210 of this act, any employer who willfully or repeatedly violates the requirements of RCW 49.17.060, of any safety or health standard promulgated under the authority of this chapter, of any existing rule or regulation governing the conditions of employment promulgated by the department, or of any order issued granting a variance under RCW 49.17.080 or 49.17.090 may be assessed a civil penalty not to exceed seventy thousand dollars for each violation. A minimum penalty of five thousand dollars shall be assessed for a willful violation.

(2) Any employer who has received a citation for a serious violation of the requirements of RCW 49.17.060, of any safety or health standard promulgated under the authority of this chapter, of any existing rule or regulation governing the conditions of employment promulgated by the department, or of any order issued granting a variance under RCW 49.17.080 or 49.17.090 as determined in accordance with subsection (6) of this section, shall be assessed a civil penalty not to exceed seven thousand dollars for each such violation.

(3) Any employer who has received a citation for a violation of the requirements of RCW 49.17.060, of any safety or health standard promulgated under this chapter, of any existing rule or regulation governing the conditions of employment promulgated by the department, or of any order issued granting a variance under RCW 49.17.080 or 49.17.090, where such violation is specifically determined not to be of a serious nature as provided in subsection (6) of this section, may be assessed a civil penalty not to exceed seven thousand dollars for each such violation, unless such violation is determined to be de minimis.

(4) Any employer who fails to correct a violation for which a citation has been issued under RCW 49.17.120 or 49.17.130 within the period permitted for its correction, which period shall not begin to run until the date of the final order of the board of industrial insurance appeals in the case of any review proceedings under this chapter initiated by the employer in good faith and not solely for delay or avoidance of penalties, may be assessed a civil penalty of not more than seven thousand dollars for each day during which such failure or violation continues.

(5) Any employer who violates any of the posting requirements of this chapter, or any of the posting requirements of rules promulgated by the department pursuant to this chapter related to employee or employee representative's rights to notice, including but not limited to those employee rights to notice set forth in RCW 49.17.080, 49.17.090, 49.17.120, 49.17.130, 49.17.220(1) and 49.17.240(2), shall be assessed a penalty not to exceed seven thousand dollars for each such violation. Any employer who violates any of the posting requirements for the posting of informational, educational, or training materials under the authority of RCW 49.17.050(7), may be assessed a penalty not to exceed seven thousand dollars for each such violation.

(6) For the purposes of this section, a serious violation shall be deemed to exist in a work place if there is a substantial probability that death or serious physical harm could result from a condition which exists, or from one or more practices, means, methods, operations, or processes which have been adopted or are in use in such work place, unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation.

(7) The director, or his authorized representatives, shall have authority to assess all civil penalties provided in this section, giving due consideration to the appropriateness of the penalty with respect to the number of affected employees of the employer being charged, the gravity of the violation, the size of the employer's business, the good faith of the employer, and the history of previous violations.

(8) Civil penalties imposed under this chapter shall be paid to the director for deposit in the supplemental pension fund established by RCW 51.44.033. Civil penalties may be recovered in a civil action in the name of the department brought in the superior court of the county where the violation is alleged to have occurred, or the department may utilize the procedures for collection of civil penalties as set forth in RCW 51.48.120 through 51.48.150.

Sec. 223. RCW 70.94.431 and 1991 c 199 s 311 are each amended to read as follows:

(1) Except as provided in sections 207 through 209 of this act, and in addition to or as an alternate to any other penalty provided by law, any person who violates any of the provisions of chapter 70.94 RCW, chapter 70.120 RCW, or any of the rules in force under such chapters may incur a civil penalty in an amount not to exceed ten thousand dollars per day for each violation. Each such violation shall be a separate and distinct offense, and in case of a continuing violation, each day's continuance shall be a separate and distinct violation.

Any person who fails to take action as specified by an order issued pursuant to this chapter shall be liable for a civil penalty of not more than ten thousand dollars for each day of continued noncompliance.

(2) Penalties incurred but not paid shall accrue interest, beginning on the ninety-first day following the date that the penalty becomes due and payable, at the highest rate allowed by RCW 19.52.020 on the date that the penalty becomes due and payable. If violations or penalties are appealed, interest shall not begin to accrue until the thirty-first day following final resolution of the appeal.

The maximum penalty amounts established in this section may be increased annually to account for inflation as determined by the state office of the economic and revenue forecast council.

(3) Each act of commission or omission which procures, aids or abets in the violation shall be considered a violation under the provisions of this section and subject to the same penalty. The penalties provided in this section shall be imposed pursuant to RCW 43.21B.300.

(4) All penalties recovered under this section by the department shall be paid into the state treasury and credited to the air pollution control account established in RCW 70.94.015 or, if recovered by the authority, shall be paid into the treasury of the authority and credited to its funds. If a prior penalty for the same violation has been paid to a local authority, the penalty imposed by the department under subsection (1) of this section shall be reduced by the amount of the payment.

(5) To secure the penalty incurred under this section, the state or the authority shall have a lien on any vessel used or operated in violation of this chapter which shall be enforced as provided in RCW 60.36.050.

(6) Public or private entities that are recipients or potential recipients of department grants, whether for air quality related activities or not, may have such grants rescinded or withheld by the department for failure to comply with provisions of this chapter.

(7) In addition to other penalties provided by this chapter, persons knowingly under-reporting emissions or other information used to set fees, or persons required to pay emission or permit fees who are more than ninety days late with such payments may be subject to a penalty equal to three times the amount of the original fee owed.

(8) By January 1, 1992, the department shall develop rules for excusing excess emissions from enforcement action if such excess emissions are unavoidable. The rules shall specify the criteria and procedures for the department and local air authorities to determine whether a period of excess emissions is excusable in accordance with the state implementation plan.

Sec. 224. RCW 70.105.080 and 1987 c 109 s 12 are each amended to read as follows:

(1) Except as provided in sections 207 through 209 of this act, every person who fails to comply with any provision of this chapter or of the rules adopted thereunder shall be subjected to a penalty in an amount of not more than ten thousand dollars per day for every such violation. Each and every such violation shall be a separate and distinct offense. In case of continuing violation, every day's continuance shall be a separate and distinct violation. Every person who, through an act of commission or omission, procures, aids, or abets in the violation shall be considered to have violated the provisions of this section and shall be subject to the penalty herein provided.

(2) The penalty provided for in this section shall be imposed pursuant to the procedures in RCW 43.21B.300.

Sec. 225. RCW 70.132.050 and 1982 c 113 s 5 are each amended to read as follows:

Except as provided in sections 207 through 209 of this act, any person who violates any provision of this chapter or any rule adopted under this chapter is subject to a civil penalty not exceeding five hundred dollars for each violation. Each day of a continuing violation is a separate violation.

Sec. 226. RCW 70.138.040 and 1987 c 528 s 4 are each amended to read as follows:

(1) Except as provided in sections 207 through 209 of this act, any person who violates any provision of a department regulation or regulatory order relating to the management of special incinerator ash shall incur in addition to any other penalty provided by law, a penalty in an amount up to ten thousand dollars a day for every such violation. Each and every such violation shall be a separate and distinct offense. ((If [In])) In case of continuing violation, every day's continuance shall be a separate and distinct violation. Every person who, through an act of commission or omission, procures, aids, or abets in the violation shall be considered to have violated the provisions of this section and shall be subject to the penalty herein provided.

(2) The penalty provided for in this section shall be imposed by a notice in writing, either by certified mail with return receipt requested or by personal service, to the person incurring the same from the department, describing the violation with reasonable particularity. Within fifteen days after the notice is received, the person incurring the penalty may apply in writing to the department for the remission or mitigation of such penalty. Upon receipt of the application, the department may remit or mitigate the penalty upon whatever terms the department in its discretion deems proper, giving consideration to the degree of hazard associated with the violation, provided the department deems such remission or mitigation to be in the best interests of carrying out the purposes of this chapter. The department shall have authority to ascertain the facts regarding all such applications in such reasonable manner and under such rules as it may deem proper.

(3) Any penalty imposed by this section shall become due and payable thirty days after receipt of a notice imposing the same unless application for remission or mitigation is made or petition for review by the hearings board is filed. When such an application for remission or mitigation is made, any penalty incurred pursuant to this section shall become due and payable thirty days after receipt of notice setting forth the disposition of such application.

(4) If the amount of any penalty is not paid to the department within thirty days after it becomes due and payable, the attorney general, upon the request of the director, shall bring an action in the name of the state of Washington in the superior court of Thurston county, or any county in which such violator may do business, to recover such penalty. In all such actions, the procedure and rules of evidence shall be the same as an ordinary civil action except as otherwise provided in this chapter.

Sec. 227. RCW 86.16.081 and 1987 c 523 s 8 are each amended to read as follows:

(2) Any person who fails to comply with this chapter shall also be subject to a civil penalty not to exceed one thousand dollars for each violation. Each violation or each day of noncompliance shall constitute a separate violation.

(3) The penalty provided for in this section shall be imposed by a notice in writing, either by certified mail with return receipt requested or by personal service, to the person incurring the same from the department or local government, describing the violation with reasonable particularity and ordering the act or acts constituting the violation or violations to cease and desist or, in appropriate cases, requiring necessary corrective action to be taken within a specific and reasonable time.

(4) Any penalty imposed pursuant to this section by the department shall be subject to review by the pollution control hearings board. Any penalty imposed pursuant to this section by local government shall be subject to review by the local government legislative authority. Any penalty jointly imposed by the department and local government shall be appealed to the pollution control hearings board.

Sec. 228. RCW 90.03.600 and 1987 c 109 s 157 are each amended to read as follows:

Except as provided in sections 207 through 209 of this act, the power is granted to the department of ecology to levy civil penalties of up to one hundred dollars per day for violation of any of the provisions of this chapter and chapters 43.83B, 90.22, and 90.44 RCW, and rules, permits, and similar documents and regulatory orders of the department of ecology adopted or issued pursuant to such chapters. The procedures of RCW 90.48.144 shall be applicable to all phases of the levying of a penalty as well as review and appeal of the same.

Sec. 229. RCW 90.48.144 and 1992 c 73 s 27 are each amended to read as follows:

Except as provided in sections 207 through 209 of this act, every person who:

(1) Violates the terms or conditions of a waste discharge permit issued pursuant to RCW 90.48.180 or 90.48.260 through 90.48.262, or

(2) Conducts a commercial or industrial operation or other point source discharge operation without a waste discharge permit as required by RCW 90.48.160 or 90.48.260 through 90.48.262, or

(3) Violates the provisions of RCW 90.48.080, or other sections of this chapter or chapter 90.56 RCW or rules or orders adopted or issued pursuant to either of those chapters, shall incur, in addition to any other penalty as provided by law, a penalty in an amount of up to ten thousand dollars a day for every such violation. Each and every such violation shall be a separate and distinct offense, and in case of a continuing violation, every day's continuance shall be and be deemed to be a separate and distinct violation. Every act of commission or omission which procures, aids or abets in the violation shall be considered a violation under the provisions of this section and subject to the penalty herein provided for. The penalty amount shall be set in consideration of the previous history of the violator and the severity of the violation's impact on public health and/or the environment in addition to other relevant factors. The penalty herein provided for shall be imposed pursuant to the procedures set forth in RCW 43.21B.300.

Sec. 230. RCW 90.58.210 and 1986 c 292 s 4 are each amended to read as follows:

(1) Except as provided in sections 207 through 209 of this act, the attorney general or the attorney for the local government shall bring such injunctive, declaratory, or other actions as are necessary to insure that no uses are made of the shorelines of the state in conflict with the provisions and programs of this chapter, and to otherwise enforce the provisions of this chapter.

(2) Any person who shall fail to conform to the terms of a permit issued under this chapter or who shall undertake development on the shorelines of the state without first obtaining any permit required under this chapter shall also be subject to a civil penalty not to exceed one thousand dollars for each violation. Each permit violation or each day of continued development without a required permit shall constitute a separate violation.

(4) Within thirty days after the notice is received, the person incurring the penalty may apply in writing to the department for remission or mitigation of such penalty. Upon receipt of the application, the department or local government may remit or mitigate the penalty upon whatever terms the department or local government in its discretion deems proper. Any penalty imposed pursuant to this section by the department shall be subject to review by the shorelines hearings board. Any penalty imposed pursuant to this section by local government shall be subject to review by the local government legislative authority. Any penalty jointly imposed by the department and local government shall be appealed to the shorelines hearings board.

Sec. 231. RCW 90.58.560 and 1983 c 138 s 2 are each amended to read as follows:

(1) Except as provided in sections 207 through 209 of this act, a person who violates RCW 90.58.550, or any rule adopted thereunder, is subject to a penalty in an amount of up to five thousand dollars a day for every such violation. Each and every such violation shall be a separate and distinct offense, and in case of a continuing violation, every day's continuance shall be and be deemed to be a separate and distinct violation. Every act of commission or omission which procures, aids or abets in the violation shall be considered a violation under the provisions of this section and subject to the penalty provided for in this section.

(2) The penalty shall be imposed by a notice in writing, either by certified mail with return receipt requested or by personal service, to the person incurring the penalty from the director or the director's representative describing such violation with reasonable particularity. The director or the director's representative may, upon written application therefor received within fifteen days after notice imposing any penalty is received by the person incurring the penalty, and when deemed to carry out the purposes of this chapter, remit or mitigate any penalty provided for in this section upon such terms as he or she deems proper, and shall have authority to ascertain the facts upon all such applications in such manner and under such regulations as he or she may deem proper.

(3) Any person incurring any penalty under this section may appeal the penalty to the hearings board as provided for in chapter 43.21B RCW. Such appeals shall be filed within thirty days of receipt of notice imposing any penalty unless an application for remission or mitigation is made to the department. When an application for remission or mitigation is made, such appeals shall be filed within thirty days of receipt of notice from the director or the director's representative setting forth the disposition of the application. Any penalty imposed under this section shall become due and payable thirty days after receipt of a notice imposing the same unless application for remission or mitigation is made or an appeal is filed. When an application for remission or mitigation is made, any penalty incurred hereunder shall become due and payable thirty days after receipt of notice setting forth the disposition of the application unless an appeal is filed from such disposition. Whenever an appeal of any penalty incurred under this section is filed, the penalty shall become due and payable only upon completion of all review proceedings and the issuance of a final order confirming the penalty in whole or in part.

(4) If the amount of any penalty is not paid to the department within thirty days after it becomes due and payable, the attorney general, upon the request of the director, shall bring an action in the name of the state of Washington in the superior court of Thurston county or of any county in which such violator may do business, to recover such penalty. In all such actions the procedure and rules of evidence shall be the same as an ordinary civil action except as otherwise in this chapter provided. All penalties recovered under this section shall be paid into the state treasury and credited to the general fund.

Sec. 232. RCW 90.76.080 and 1989 c 346 s 9 are each amended to read as follows:

(1) Except as provided in sections 207 through 209 of this act, a person who fails to notify the department pursuant to tank notification requirements or who submits false information is subject to a civil penalty not to exceed five thousand dollars per violation.

(2) Except as provided in sections 207 through 209 of this act, a person who violates this chapter is subject to a civil penalty not to exceed five thousand dollars for each tank per day of violation.

PART III - RULES REVIEW

NEW SECTION. Sec. 301. The joint administrative rules review committee shall not render a decision on a rule unless a quorum is present. A quorum shall consist of at least five members of the committee. Once a quorum is established, a majority of the quorum may render any decision except a suspension recommendation. A recommendation to suspend a rule under RCW 34.05.640 shall require a majority vote of the entire membership of the rules review committee.

NEW SECTION. Sec. 302. (1) Any person potentially impacted by a proposed rule or currently impacted by an existing rule may petition the rules review committee for a review of that rule. Within thirty days of the receipt of the petition, the rules review committee shall acknowledge receipt of the petition and describe the initial action taken. If the rules review committee rejects the petition, a written statement of the reasons for rejection shall be included.

(2) Within ninety days of receipt of the petition, the rules review committee shall make a final decision on the rule.

NEW SECTION. Sec. 303. Any individual employed or holding office in any department or agency of state government may submit rules warranting review to the rules review committee. Any such state employee is protected under chapter 42.40 RCW.

Sec. 304. RCW 34.05.660 and 1988 c 288 s 606 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, it is the express policy of the legislature that establishment of procedures for review of administrative rules by the legislature and the notice of objection required by RCW 34.05.630(2) and 34.05.640(2) in no way serves to establish a presumption as to the legality or constitutionality of a rule in any subsequent judicial proceedings interpreting such rules.

(2) An election by the rules review committee to recommend suspension of a rule, whether or not the suspension is approved by the governor, and if the suspension recommendation is not subsequently withdrawn, establishes a presumption in any subsequent judicial review of the rule that the rule is invalid. The burden of demonstrating the rule's validity is then on the adopting agency.

NEW SECTION. Sec. 305. (1) The rules review committee may make reports from time to time to the members of the legislature and to the public with respect to any of its findings or recommendations. The committee shall keep complete minutes of its meetings.

(2) The committee may establish ad hoc advisory boards, including but not limited to, ad hoc economics or science advisory boards to assist the committee in its rules review functions.

(3) The committee may hire staff as needed to perform functions under this chapter.

NEW SECTION. Sec. 306. In the discharge of any duty imposed under this chapter, the rules review committee may examine and inspect all properties, equipment, facilities, files, records, and accounts of any state office, department, institution, board, committee, commission, or agency, and administer oaths, issue subpoenas, compel the attendance of witnesses and the production of any papers, books, accounts, documents, and testimony, and cause the deposition of witnesses, either residing within or without the state, to be taken in the manner prescribed by law for taking depositions in civil actions in the superior courts.

NEW SECTION. Sec. 307. In case of the failure on the part of any person to comply with any subpoena issued in behalf of the rules review committee, or on the refusal of any witness to testify to any matters regarding which he or she may be lawfully interrogated, it is the duty of the superior court of any county, or of the judge thereof, on application of the committee, to compel obedience by proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify in the court.

Sec. 308. RCW 42.40.010 and 1982 c 208 s 1 are each amended to read as follows:

It is the policy of the legislature that employees should be encouraged to disclose, to the extent not expressly prohibited by law, improper governmental actions, and it is the intent of the legislature to protect the rights of state employees making these disclosures. It is also the policy of the legislature that employees should be encouraged to identify rules warranting review or provide information to the rules review committee, and it is the intent of the legislature to protect the rights of these employees.

Sec. 309. RCW 42.40.020 and 1992 c 118 s 1 are each amended to read as follows:

As used in this chapter, the terms defined in this section shall have the meanings indicated unless the context clearly requires otherwise.

(1) "Auditor" means the office of the state auditor.

(2) "Employee" means any individual employed or holding office in any department or agency of state government.

(3)(a) "Improper governmental action" means any action by an employee:

(i) Which is undertaken in the performance of the employee's official duties, whether or not the action is within the scope of the employee's employment; and

(ii) Which is in violation of any state law or rule, is an abuse of authority, is of substantial and specific danger to the public health or safety, or is a gross waste of public funds.

(b) "Improper governmental action" does not include personnel actions including but not limited to employee grievances, complaints, appointments, promotions, transfers, assignments, reassignments, reinstatements, restorations, reemployments, performance evaluations, reductions in pay, dismissals, suspensions, demotions, violations of the state civil service law, alleged labor agreement violations, reprimands, or any action which may be taken under chapter 41.06 ((or 28B.16)) RCW, or other disciplinary action except as provided in RCW 42.40.030.

(4) "Use of official authority or influence" includes taking, directing others to take, recommending, processing, or approving any personnel action such as an appointment, promotion, transfer, assignment, reassignment, reinstatement, restoration, reemployment, performance evaluation, or any adverse action under chapter 41.06 ((or 28B.16)) RCW, or other disciplinary action.

(5) "Whistleblower" means an employee who in good faith reports alleged improper governmental action to the auditor, initiating an investigation under RCW 42.40.040. For purposes of the provisions of this chapter and chapter 49.60 RCW relating to reprisals and retaliatory action, the term "whistleblower" also means: (a) An employee who in good faith provides information to the auditor in connection with an investigation under RCW 42.40.040 and an employee who is believed to have reported alleged improper governmental action to the auditor or to have provided information to the auditor in connection with an investigation under RCW 42.40.040 but who, in fact, has not reported such action or provided such information; or (b) an employee who in good faith identifies rules warranting review or provides information to the rules review committee, and an employee who is believed to have identified rules warranting review or provided information to the rules review committee but who, in fact, has not done so.

Sec. 310. RCW 42.40.030 and 1989 c 284 s 2 are each amended to read as follows:

(1) An employee shall not directly or indirectly use or attempt to use the employee's official authority or influence for the purpose of intimidating, threatening, coercing, commanding, influencing, or attempting to intimidate, threaten, coerce, command, or influence any individual for the purpose of interfering with the right of the individual to: (a) Disclose to the auditor (or representative thereof) information concerning improper governmental action; or (b) identify rules warranting review or provide information to the rules review committee.

(2) Nothing in this section authorizes an individual to disclose information otherwise prohibited by law.

PART IV - FEES AND EXPENSES

NEW SECTION. Sec. 401. A new section is added to chapter 4.84 RCW to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this section and sections 402 through 404 of this act.

(1) "Agency" means agency as defined by chapter 34.05 RCW.

(2) "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 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 may 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 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.

(3) "Judicial review" means a judicial review as defined by chapter 34.05 RCW.

(4) "Qualified 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 having not more than one million dollars in gross receipts, as reported to the department of revenue, in the calendar year prior to when 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. Sec. 1141J(a)), may be a party regardless of the net worth of such organization or cooperative association.

(5) "Rule" means a rule as defined by chapter 34.05 RCW.

NEW SECTION. Sec. 402. A new section is added to chapter 4.84 RCW to read as follows:

If upon judicial review a rule is declared invalid and the party that challenged the rule is a qualified party, the party shall be awarded fees and other expenses not to exceed twenty-five thousand dollars.

NEW SECTION. Sec. 403. A new section is added to chapter 4.84 RCW to read as follows:

Fees and other expenses awarded under section 402 of this act shall be paid by the agency that adopted the invalid rule from operating funds appropriated to the agency within sixty days. Agencies paying fees and other expenses pursuant to section 402 of this act 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 shall be subject to chapter 39.76 RCW and shall be deemed payable on the date the court announces the award.

NEW SECTION. Sec. 404. A new section is added to chapter 43.88 RCW to read as follows:

The office of financial management shall report annually to the legislature on the amount of fees and other expenses awarded during the preceding fiscal year under section 402 of this act. The report shall describe the number, nature, and amount of the awards, the claims involved in the controversy, and other relevant information that may aid the legislature in evaluating the scope and impact of the awards.

PART V - MISCELLANEOUS

NEW SECTION. Sec. 501. Sections 201 through 213, 215, 217, 218, and 220 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 502. Sections 301 through 303 and 305 through 307 of this act are each added to chapter 34.05 RCW.

NEW SECTION. Sec. 503. As used in this act, part headings do not constitute any part of the law."

On page 1, line 1 of the title, after "reform;" strike the remainder of the title and insert "amending RCW 34.05.310, 34.05.313, 34.05.325, 34.05.330, 34.05.375, 19.85.030, 34.05.370, 34.05.570, 18.104.155, 49.17.180, 70.94.431, 70.105.080, 70.132.050, 70.138.040, 86.16.081, 90.03.600, 90.48.144, 90.58.210, 90.58.560, 90.76.080, 34.05.660, 42.40.010, 42.40.020, and 42.40.030; adding new sections to chapter 34.05 RCW; adding a new section to chapter 19.85 RCW; adding new sections to chapter 4.84 RCW; adding a new section to chapter 43.88 RCW; adding a new chapter to Title 43 RCW; creating new sections; repealing RCW 34.05.355; and prescribing penalties."

Representatives Rust, Mastin, Patterson, Sommers, R. Fisher and Costa spoke in favor of adoption of the amendment.

Representative Appelwick demanded an electronic roll call vote and the demand was sustained.

Representatives Reams and Horn spoke against the adoption of the amendment.

Representative K. Schmidt demanded the previous question and the demand was sustained.

ROLL CALL

The Clerk called the roll on the adoption of the striking amendment to Substitute House Bill No. 1010 and amendment was not adopted by the following vote: Yeas - 36, Nays - 60, Absent - 0, Excused - 2.

Voting yea: Representatives Appelwick, Brown, Chappell, Chopp, Cody, Cole, Conway, Costa, Dellwo, Dickerson, Ebersole, Fisher, G., Fisher, R., Grant, Hatfield, Jacobsen, Kessler, Kremen, Mason, Mastin, Morris, Patterson, Poulsen, Quall, Regala, Romero, Rust, Scott, Sheldon, Sommers, Thibaudeau, Thomas, L., Tokuda, Valle, Veloria and Wolfe - 36.

Voting nay: Representatives Backlund, Ballasiotes, Basich, Beeksma, Benton, Blanton, Boldt, Brumsickle, Buck, Cairnes, Campbell, Carlson, Carrell, Casada, Chandler, Clements, Cooke, Crouse, Delvin, Dyer, Elliot, Foreman, Fuhrman, Goldsmith, Hankins, Hargrove, Hickel, Honeyford, Horn, Huff, Hymes, Johnson, Koster, Lambert, Lisk, McMahan, McMorris, Mielke, Mitchell, Mulliken, Padden, Pelesky, Pennington, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sherstad, Skinner, Smith, Stevens, Talcott, Thomas, B., Thompson, Van Luven and Mr. Speaker - 60.

Excused: Representatives Ogden and Silver - 2.

STATEMENT FOR THE JOURNAL

The record should reflect I inadvertently voted "NAY" on amendment number 30 to Substitute House Bill No. 1010. I intended to vote "YEA".

BOB BASICH, 19th District

The bill was ordered engrossed.

On motion of Representative Foreman, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Reams, D. Schmidt, Sheldon, Thompson, Elliot, L. Thomas, B. Thomas, Smith, Horn and Clements spoke in favor of passage of the bill.

Representative K. Schmidt demanded the previous question and the demand was not sustained.

Representatives Rust, Kessler, Chopp, G. Fisher, Sommers, Mastin, Basich and Appelwick spoke against final passage.

Representative Clements demanded the previous question and the demand was sustained.

Representative Reams again spoke in favor of passage of the bill.

The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 1010.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Substitute House Bill No. 1010 and the bill passed the House by the following vote: Yeas - 64, Nays - 32, Absent - 0, Excused - 2.

Voting yea: Representatives Backlund, Ballasiotes, Beeksma, Benton, Blanton, Boldt, Brumsickle, Buck, Cairnes, Campbell, Carlson, Carrell, Casada, Chandler, Chappell, Clements, Cooke, Crouse, Delvin, Dyer, Elliot, Foreman, Fuhrman, Goldsmith, Hankins, Hargrove, Hickel, Honeyford, Horn, Huff, Hymes, Johnson, Koster, Kremen, Lambert, Lisk, McMahan, McMorris, Mielke, Mitchell, Mulliken, Padden, Pelesky, Pennington, Quall, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Stevens, Talcott, Thomas, B., Thomas, L., Thompson, Van Luven and Mr. Speaker - 64.

Voting nay: Representatives Appelwick, Basich, Brown, Chopp, Cody, Cole, Conway, Costa, Dellwo, Dickerson, Ebersole, Fisher, G., Fisher, R., Grant, Hatfield, Jacobsen, Kessler, Mason, Mastin, Morris, Patterson, Poulsen, Regala, Romero, Rust, Scott, Sommers, Thibaudeau, Tokuda, Valle, Veloria and Wolfe - 32.

Excused: Representatives Ogden and Silver - 2.

Engrossed Substitute House Bill No. 1010, having received the constitutional majority, was declared passed.

There being no objection, the House advanced to the eleventh order of business.

MESSAGE FROM THE SENATE

February 1, 1995

Mr. Speaker:

The President has signed:

SENATE BILL NO. 5038,

and the same is herewith transmitted.

Marty Brown, Secretary

SIGNED BY THE SPEAKER

The Speaker announced he was signing:

SENATE BILL NO. 5038,

MOTION

On motion of Representative Foreman, the House adjourned until 9:55 a.m. Thursday, February 2, 1995.

CLYDE BALLARD, Speaker

TIMOTHY A. MARTIN, Chief Clerk