WHEREAS, Providing all Washington State children a public education is the paramount duty of the state; and

      WHEREAS, It is impossible to provide our children a quality public education if they cannot get to school, if they are hungry during the school day, or if the schools they arrive at are neglected, cold, and unsafe; and

      WHEREAS, Classified employees are the bus drivers who are safely transporting, in sometimes dangerous road conditions, over 474,514 students each day in 9,035 busses over 500,000 miles; the child nutrition employees providing breakfast for 113,518 students and lunches for over 440,000 students each day. Other employees include the custodian, maintenance, and security employees ensuring that the 2,174 school buildings, where our children are receiving their education, are functional, warm, clean, and safe; and

      WHEREAS, Classified employees are the secretaries who make sure that all parents, staff, and most importantly all children receive the necessary support and services, while at the same time providing love and attention to each student's special needs, even if all that is needed is a Band-Aid, a friendly ear, or a reminder; and

      WHEREAS, Classified employees are the instructional assistants who are increasingly depended upon to provide individualized attention to students in the classroom to ensure they meet the higher academic standards. They provide such specialized services as nursing and interpreting for deaf and disabled children and students who speak other languages; and

      WHEREAS, Classified employees are normally the first employees called upon when there is a threat to our children's safety and security; and

      WHEREAS, It is necessary to employ over 50,000 classified employees to provide these essential support services to the nearly one million students receiving public education; and

      WHEREAS, Washington State students have had their education significantly enhanced by the services of classified school employees; and

      WHEREAS, Washington State citizens seldom reflect on the critical role classified employees play in providing our children a quality education;

      NOW, THEREFORE, BE IT RESOLVED, That the Washington State Senate honor classified school employees during Classified School Employee Week, March 10 through 14, 2003, and urge all citizens to join in honoring and recognizing the dedication and hard work of all classified school employees; and

      BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Secretary of the Senate to the Public School Employees of Washington.

      Senators Johnson, Hale, McAuliffe, Hewitt, Haugen, Mulliken and Rasmussen spoke to Senate Resolution 8637.

INTRODUCTION OF SPECIAL GUESTS

      The President welcomed and introduced members of the Classified School Employees, who were seated in the back of the Chamber.

MOTION

      On motion of Senator Sheahan, the Senate reverted to the sixth order of business.

SECOND READING

      SENATE BILL NO. 5728, by Senators Brandland, McCaslin, T. Sheldon, Deccio, Schmidt, Parlette and Hale

Providing for omnibus civil liability reform.

MOTIONS

      On motion of Senator Brandland, Substitute Senate Bill No. 5728 was substituted for Senate Bill No. 5728 and the substitute bill was placed on second reading and read the second time.

      Senator Esser moved that the following amendment by Senators Esser and Hargrove be adopted:

       Beginning on page 1, line 15, strike all of sections 101 and 102 and insert the following:

       "Sec. 101. RCW 4.22.070 and 1993 c 496 s 1 are each amended to read as follows:

       (1) In all actions involving fault of more than one entity, the trier of fact shall determine the percentage of the total fault which is attributable to every entity which caused the claimant's damages except entities immune from liability to the claimant under Title 51 RCW. The sum of the percentages of the total fault attributed to at- fault entities shall equal one hundred percent. The entities whose fault shall be determined include the claimant or person suffering personal injury or incurring property damage, defendants, third-party defendants, entities ((released by)) who have entered into a release, covenant not to sue, covenant not to enforce judgment, or similar agreement with the claimant, entities with any other individual defense against the claimant, and entities immune from liability to the claimant, but shall not include those entities immune from liability to the claimant under Title 51 RCW. Judgment shall be entered against each defendant except those entities who have ((been released by)) entered into a release, covenant not to sue, covenant not to enforce judgment, or similar agreement with the claimant or are immune from liability to the claimant or have prevailed on any other individual defense against the claimant in an amount which represents that party's proportionate share of the claimant's total damages. The liability of each defendant shall be several only and shall not be joint except:

       (a) A party shall be responsible for the fault of another person or for payment of the proportionate share of another party where both were acting in concert or when a person was acting as an agent or servant of the party.

       (b) If the trier of fact determines that the claimant or party suffering bodily injury or incurring property damages was not at fault, the defendants against whom judgment is entered shall be jointly and severally liable for the sum of their proportionate shares of the ((claimants [claimant's])) claimant's total damages.

       (2)(a) A defendant who is jointly and severally liable under one of the exceptions listed in subsection (1)(a) or (b) of this section on the basis of negligent or reckless acts or omissions shall be jointly liable for no more than twice the percentage of fault allocated to that defendant but in no case more than one hundred percent of the sum of the proportionate shares.

       (b) A defendant who is jointly and severally liable under one of the exceptions listed in subsection (1)(a) or (b) of this section on the basis of intentional acts or omissions shall be jointly liable for the sum of the proportionate shares of the claimant's total damages.

       (c) If a defendant is jointly and severally liable under one of the exceptions listed in subsection((s)) (1)(a) or (((1)))(b) of this section, such defendant's rights to contribution against another jointly and severally liable defendant, and the effect of settlement by either such defendant, shall be determined under RCW 4.22.040, 4.22.050, and 4.22.060.

       (3)(a) Nothing in this section affects any cause of action relating to hazardous wastes or substances or solid waste disposal sites.

       (b) Nothing in this section shall affect a cause of action arising from the tortious interference with contracts or business relations.

       (c) Nothing in this section shall affect any cause of action arising from the manufacture or marketing of a fungible product in a generic form which contains no clearly identifiable shape, color, or marking.

       Sec. 102. RCW 4.22.015 and 1981 c 27 s 9 are each amended to read as follows:

       "Fault" includes acts or omissions, including misuse of a product, that are in any measure negligent ((or)), reckless, or intentional toward the person or property of the actor or others, or that subject a person to strict tort liability or liability on a product liability claim. The term also includes breach of warranty, unreasonable assumption of risk, and unreasonable failure to avoid an injury or to mitigate damages. Legal requirements of causal relation apply both to fault as the basis for liability and to contributory fault.

       A comparison of fault for any purpose under RCW 4.22.005 through ((4.22.060)) 4.22.070 shall involve consideration of both the nature of the conduct of the parties to the action and the extent of the causal relation between such conduct and the damages."

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Esser and Hargrove on page 1, line15, to Substitute Senate Bill No. 5728.

      The motion by Senator Esser carried and the amendment was adopted.

MOTION

      Senator Kastama moved that the following amendments by Senators Kastama, Winsley and Keiser be adopted:

       Beginning on page 3, line 28, strike all of section 202 and insert the following:

       "NEW SECTION. Sec. 202. A new section is added to chapter 4.24 RCW to read as follows:

       (1) An employer who discloses information about a former or current employee's job performance to an entity or person that it reasonably believes is a prospective employer, or employment agency as defined by RCW 49.60.040, at the specific request of that individual employer or employment agency, is presumed to be acting in good faith and is immune from civil liability for such disclosure or its consequences. Within a reasonable period of time after an employee or former employee submits a written request, an employer shall make available, in writing, information disclosed during a reference by the employer to a prospective employer or employment agency. For purposes of this section, the presumption of good faith may only be rebutted upon a showing by clear and convincing evidence that the information disclosed by the employer was knowingly or recklessly false, or deliberately misleading.

       (2) For the purposes of this section, "job performance" means the manner in which the employee performs the duties of a position of employment and includes an analysis of the employee's attendance at work; conduct, attitude, effort, knowledge, behavior, and skills, that are work-related; and adherence to the employer's employment policies and to safety and health laws; subject to the limitation of RCW 51.48.025."

      Debate ensued.

      Senator Kastama demanded a roll call and the demand was sustained.

      The President Pro Tempore declared the question before the Senate to be the roll call on the adoption of the amendment by Senators Kastama, Winsley and Keiser on page 3, line 28, to Substitute Senate Bill No. 5728.

ROLL CALL

      The Secretary called the roll and the amendment was not adopted by the following vote. Yeas, 24; Nays, 25; Absent, 0; Excused, 0.

     Voting yea: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Haugen, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Rasmussen, Reardon, Regala, Sheldon, B., Shin, Spanel, Thibaudeau and Winsley - 24.

     Voting nay: Senators Benton, Brandland, Carlson, Deccio, Esser, Finkbeiner, Hale, Hewitt, Honeyford, Horn, Johnson, McCaslin, Morton, Mulliken, Oke, Parlette, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, West and Zarelli - 25.

MOTION

      Senator Sheahan moved that the following amendment be adopted:

       Beginning on page 4, line 29, strike all of section 302 and insert the following:

       "Sec. 302. RCW 4.56.110 and 1989 c 360 s 19 are each amended to read as follows:

       Interest on judgments shall accrue as follows:

       (1) Judgments founded on written contracts, providing for the payment of interest until paid at a specified rate, shall bear interest at the rate specified in the contracts: PROVIDED, That said interest rate is set forth in the judgment.

       (2) All judgments for unpaid child support that have accrued under a superior court order or an order entered under the administrative procedure act shall bear interest at the rate of twelve percent.

       (3) Judgments founded on the tortious conduct of individuals or other entities, whether acting in their personal or representative capacities, shall bear interest from the date of entry at two percentage points above the equivalent coupon issue yield, as published by the board of governors of the federal reserve system, of the average bill rate for twenty-six week treasury bills as determined at the first bill market auction conducted during the calendar month immediately preceding the date of entry. In any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.

       (4) Except as provided under subsections (1) ((and)), (2), and (3) of this section, judgments shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof((: PROVIDED, That)). In any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered. The method for determining an interest rate prescribed by this subsection is also the method for determining the "rate applicable to civil judgments" for purposes of RCW 10.82.090.

       NEW SECTION. Sec. 303. The rate of interest required by sections 301 and 302(3), chapter . . ., Laws of 2003 (sections 301 and 302(3) of this act) applies to the accrual of interest:

       (1) As of the date of entry of judgment with respect to a judgment that is entered on or after the effective date of this act;

       (2) As of the effective date of this act with respect to a judgment that was entered before the effective date of this act and that is still accruing interest on the effective date of this act.

       Sec. 304. RCW 19.52.025 and 1986 c 60 s 1 are each amended to read as follows:

       Each month the state treasurer shall compute the highest rate of interest permissible under RCW 19.52.020(1), and the rate of interest required by RCW 4.56.110(3) and 4.56.115, for the succeeding calendar month. The treasurer shall file ((this rate)) these rates with the state code reviser for publication in the next available issue of the Washington State Register in compliance with RCW 34.08.020(8)."

Debate ensued

POINT OF INQUIRY

      Senator Kline: “Senator Sheahan, looking on page two, line eleven, the effective date of this. In Section 303, it says ‘the rate of interest required by section 301 and 302,' and then in Sub 2, it says, ‘As of the effective date of this act with respect to a judgment that was entered before the effective date of this act and that is still accruing interest on the effective date of this act.’ In other words, ‘past judgements.’ Are you suggesting that the Legislature has a constitutional authority to change past judgements of a court?”

      Senator Sheahan: “Thank you for the question, Senator, and colleague in the profession. I think the intent of the amendment is to make sure that contracts that were entered into under a certain interest rate will remain in effect and will not be impacted by this bill. I urge your support for the amendment.”

      Senator Kline: “If I may continue, Madam President, that is not what this section does. This section applies to the accrual of interest as of the effective date of this act, July of this year. With respect to a judgment that was entered--a judgment, not a contract--a judgment that was entered before the effective date of this act and that is still accruing interest on the effective day of the act. In other words, an existing judgment--not an existing contract. It certainly would be proper for this Legislature to avoid affecting or changing any contractual rights. In fact, that itself is a constitutional provision, but it is strictly unconstitutional for this branch of the government to tell the other branch of the government that its orders, still in effect, passed on a law that was proper then, is now improper. I think we have a little problem here and I strongly suggest that we turn this one down. Thank you.”

      Further debated ensued.

MOTION

      There being no objection, on motion of Senator Sheahan, further consideration of the amendment on page 4, line 29, to Substitute Senate Bill No. 5728 was deferred.

MOTION

      Senator Brandland moved that the following amendments be considered simultaneously and be adopted:

      On page 7, line 19, after "exceed" strike "two" and insert "three"

       On page 7, line 30, after "damages to" strike "two" and insert "three"

      Debate ensued. 

      The President Pro Tempore declared the question before the Senate to be the roll call on the adoption of the amendment by Senator Brandland on page 7, lines 19 and 30, to Substitute Senate Bill No. 5728.

      The motion by Senator Brandland carried and the amendments were adopted.

MOTION

      Senator Franklin moved that the following amendments be considered simultaneously and be adopted:

       On page 7, beginning on line 12, strike all of section 403

       Renumber the remaining sections consecutively and correct any internal references accordingly.

       Beginning on page 14, line 29, strike all of section 411

       Renumber the remaining sections consecutively and correct any internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendments by Senator Franklin on page 7, line 12, and page 14, line 29, to Substitute Senate Bill No. 5728.

      The motion by Senator Franklin failed and the amendments were not adopted.

MOTION

      Senator Franklin moved that the following amendments be considered simultaneously and be adopted

       On page 7, line 19, after "exceed" strike all material through "dollars." and insert "eight hundred fifty thousand dollars except as provided in this subsection. The eight hundred fifty thousand dollar limitation must be recalculated annually using the consumer price index for urban wage earners and clerical workers, cpi-w, or a successor index, for the twelve months prior to each July 1st as calculated by the United States department of labor."

       On page 7, line 30, after "to" strike "two" and insert "eight"

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendments by Senator Franklin on page 7, lines 19 and 30, to Substitute Senate Bill No. 5728.

      The motion by Senator Franklin failed and the amendments were not adopted.

MOTION

      Senator Rasmussen moved that the following amendment by Senator Rasmussen and Hargrove be adopted:

       Beginning on page 7, line 32, strike all of section 404 and insert the following:

       "Sec. 404. RCW 7.70.100 and 1993 c 492 s 419 are each amended to read as follows:

       (1) No action based upon a health care provider's professional negligence may be commenced unless the defendant has been given at least ninety days' notice of the intention to commence the action. If the notice is served within ninety days of the expiration of the applicable statute of limitations, the time for the commencement of the action must be extended ninety days from the service of the notice.

       (2) The provisions of subsection (1) of this section are not applicable with respect to any defendant whose name is unknown to the plaintiff at the time of filing the complaint and who is identified therein by a fictitious name.

       (3) After the filing of the ninety-day presuit notice, and before a superior court trial, all causes of action, whether based in tort, contract, or otherwise, for damages arising from injury occurring as a result of health care provided after July 1, 1993, shall be subject to mandatory mediation prior to trial.

       (2) The supreme court shall by rule adopt procedures to implement mandatory mediation of actions under this chapter. The rules shall require mandatory mediation without exception and address, at a minimum:

       (a) Procedures for the appointment of, and qualifications of, mediators. A mediator shall have experience or expertise related to actions arising from injury occurring as a result of health care, and be a member of the state bar association who has been admitted to the bar for a minimum of five years or who is a retired judge. The parties may stipulate to a nonlawyer mediator. The court may prescribe additional qualifications of mediators;

       (b) Appropriate limits on the amount or manner of compensation of mediators;

       (c) The number of days following the filing of a claim under this chapter within which a mediator must be selected;

       (d) The method by which a mediator is selected. The rule shall provide for designation of a mediator by the superior court if the parties are unable to agree upon a mediator;

       (e) The number of days following the selection of a mediator within which a mediation conference must be held;

       (f) A means by which mediation of an action under this chapter may be waived by a mediator who has determined that the claim is not appropriate for mediation; and

       (g) Any other matters deemed necessary by the court.

       (3) Mediators shall not impose discovery schedules upon the parties.

       (4) The supreme court shall by rule also adopt procedures for the parties to certify to the court the manner of mediation used by the parties to comply with this section."

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Rasmussen and Hargrove on page 7, line 32, to Substitute Senate Bill No. 5728.

      The motion by Senator Rasmussen carried and the amendment was adopted.

MOTION

      Senator Kline moved that the following amendment be adopted:

       On page 11, beginning on line 4, strike all of section 407

       Renumber the sections consecutively and correct any internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Kline on page 11, line 4, to Substitute Senate Bill No. 5728.

      The motion by Senator Kline failed and the amendment was not adopted.

MOTION

      Senator Franklin moved that the following amendment be adopted:

       On page 15, after line 15, insert the following:

       "NEW SECTION. Sec. 414. A new section is added to chapter 48.01 RCW to read as follows:

       (1) The commissioner shall notify the public of any application by an insurer for a rate change to medical malpractice premiums. All the applications are subject to a public hearing before the commissioner.

       (2) Hearings and other administrative proceedings arising under this section must be conducted under chapter 34.05 RCW."

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Franklin on page 15, line 15, to Substitute Senate Bill No. 5728.

      The motion by Senator Franklin failed and the amendment was not adopted.

MOTION

      Senator Hargrove moved that the following amendment be adopted:

       Beginning on page 16, line 36, strike all of Part 6, section 601

       Renumber the remaining parts and sections consecutively and correct any internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Hargrove on page 16, line 36, to Substitute Senate Bill No. 5728.

      The motion by Senator Hargrove carried and the amendment was adopted on a rising vote.

MOTION TO RECONSIDER VOTE

      Having voted on the prevailing side, Senator Roach moved that the Senate immediately reconsider the vote by which the amendment by Senator Hargrove on page 16, line 36, was adopted.

PARLIAMENTARY INQUIRY

      Senator Hargrove: “A point of parliamentary inquiry, Madam President. Since we had no roll call vote and there was simply a hand count, do we know, in fact, who was on what side of an amendment, so that we could have a prevailing side argument here?”

REPLY BY THE PRESIDENT PRO TEMPORE

      President Pro Tempore Winsley: “My lawyers tell me they have good memories.”

      Senator Hargrove: “What if we had some disabled lawyers who couldn’t see? How would you figure that one out? I think they are both very near sighted.”

      President Pro Tempore Winsley: “And it is the Chair’s discretion and I so ruled.”

PARLIAMENTARY INQUIRY

      Senator Sheahan: “A point of parliamentary inquiry, Madam President. With response to the good Senator from the Twenty-fourth District, according to Reed’s Rules, the President can, on a vote that wasn’t a roll call, ask the person if they voted on the prevailing side. If the person said, ‘Yes,’ then they can move for reconsideration.”

REPLY BY THE PRESIDENT PRO TEMPORE

      President Pro Tempore Winsley: “That is correct. Senate Roach said she voted on the prevailing side.”

      Senator Sheahan demanded a roll call and the demand was sustained.

      The President Pro Tempore declared the question before the Senate to be the roll call on the motion by Senator Roach to immediately reconsider the vote by which the amendment by Senator Hargrove on page 16, line 36, to Substitute Senate Bill No. 5728 was adopted.

ROLL CALL

      The Secretary called the roll and the motion by Senator Roach to immediately reconsider the vote by which the amendment by Senator Hargrove on page 16, line 36, to Substitute Senate Bill No. 5728 was adopted, carried by the following vote: Yeas, 27; Nays, 22; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Brandland, Carlson, Deccio, Esser, Finkbeiner, Hale, Haugen, Hewitt, Honeyford, Horn, Johnson, McCaslin, Mulliken, Oke, Parlette, Prentice, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Stevens, Swecker, West and Zarelli - 27.

     Voting nay: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Morton, Poulsen, Rasmussen, Reardon, Regala, Shin, Spanel, Thibaudeau and Winsley - 22.

STATEMENT FOR THE JOURNAL

      Pursuant to Rule 22, I wish to explain my ‘yes’ vote on the amendment by Senator Hargrove on page 16, line 36, on reconsideration. I opposed this amendment and fully intended to vote against this amendment. With all of the floor debate, and given the significant number of amendments on this bill, I was distracted by conversation and inadvertently voted ‘yes.’ The underlying bill allows for the presentation of evidence on whether a person was or was not wearing a seatbelt--an idea which I fully support. In fact, I have introduced Senate Bill No. 5498 to implement this very policy. This amendment, however, would have stricken this language, and I do not support this, although I did mistakenly vote for the amendment.

SENATOR BOB OKE, 26th Legislative District

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Hargrove on page 16, line 36, to Substitute Senate Bill No. 5728, on reconsideration.

      Senator Hargrove demanded a roll call and the demand was sustained.

      The President Pro Tempore declared the question before the Senate to be the roll call on the adoption of the amendment by Senator Hargrove on page 16, line 36, to Substitute Senate Bill No. 5728, on reconsideration.

ROLL CALL

      The Secretary called the roll and the amendment by Senator Hargrove on page 16, line 36, to Substitute Senate Bill No. 5728 failed to pass the Senate, on reconsideration, by the following vote: Yeas, 24; Nays, 25; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Jacobsen, Keiser, Kline, Kohl-Welles, McAuliffe, Morton, Oke, Poulsen, Reardon, Regala, Roach, Shin, Spanel, Thibaudeau, Winsley and Zarelli - 24.

     Voting nay: Senators Brandland, Carlson, Deccio, Esser, Finkbeiner, Hale, Haugen, Hewitt, Honeyford, Horn, Johnson, Kastama, McCaslin, Mulliken, Parlette, Prentice, Rasmussen, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Stevens, Swecker and West - 25.

MOTION

      Senator Hargrove moved that the following amendments by Senators Hargrove and Parlette be considered simultaneously and be adopted:

       On page 19, line 27, after "(2)(a)" strike "Neither" and insert "Subject to the further limitation applicable to rural public hospital districts in this subsection, neither"

       On page 19, line 33, after "dollars." insert "Neither rural public hospital districts, nor their officers, employees, or volunteers are liable to pay a claim or a judgment by any one person that exceeds the sum of five hundred thousand dollars or any claim or judgment, or portions thereof, that, when totaled with all other claims or judgments paid by the rural public hospital district, officers, employees, or volunteers arising out of the same incident or occurrence, exceeds the sum of one million dollars."

       On page 19, line 35, after "up to" insert "five hundred thousand dollars,"

       On page 19, at the beginning of line 36, after "million dollars" insert ","

       On page 20, line 19, after "chapter" strike ", "local" and insert "((,)):

       (a) "Local"

       On page 20, after line 21, insert the following:

       "(b) "Rural public hospital district" has the meaning specified in RCW 70.44.460."

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendments on page 19, lines 27, 33, 35 and 36, and page 20, lines 19 and 21, to Substitute Senate Bill No. 5728.

      The motion by Senator Hargrove carried and the amendments were adopted.

MOTION

      Senator Hargrove moved that the following amendments be considered simultaneously and be adopted:

       On page 19, line 28, after "judgment" insert "for noneconomic damages as defined in RCW 4.56.250"

       On page 22, line 22, after "judgment" insert "for noneconomic damages as defined in RCW 4.56.250"

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendments on page 19, line 28, and page 22, line 22, to Substitute Senate Bill No. 5728.

      The motion by Senator Hargrove carried and the amendments were adopted.

MOTION

      Senator Swecker moved that the following amendments be considered simultaneously and be adopted:

       On page 20, after line 17, insert the following:

       "(d) Subsection (2)(a) of this section does not apply in cases in which the local government entity or its officers, employees, or volunteers are held liable for civil damages resulting from any negligent act or omission in the rendering of community placement, community supervision, community custody, parole supervision, probation supervision, or supervision of suspended sentences if (i) the offender under supervision has ever been convicted of the crime of first or second degree rape, first or second degree rape of a child, or first or second degree homicide, and (ii) the civil damages resulted from the subsequent commission of one of these specified offenses."

       On page 23, after line 9, insert the following:

       "(4) Subsection (1) of this section does not apply in cases in which the state or its agencies, institutions, officers, employees, or volunteers are held liable for civil damages resulting from any negligent act or omission in the rendering of community placement, community supervision, community custody, parole supervision, probation supervision, or supervision of suspended sentences if (a) the offender under supervision has ever been convicted of the crime of first or second degree rape, first or second degree rape of a child, or first or second degree homicide, and (b) the civil damages resulted from the subsequent commission of one of these specified offenses."

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendments by Senator Swecker on page 20, line 17, and page 23, line 9, to Substitute Senate Bill No. 5728.

      The motion by Senator Swecker carried and the amendments were adopted.

PERSONAL PRIVILEGE

      Senator Roach: “A point of personal privilege, Madam President. In one of our previous votes, we had a standing vote. Someone called for division and we had a standing vote. The vote was announced and I had decided to change my vote and so stood up after the gavel went down and said that I was changing my vote and that was why I was standing up. The President Pro Tempore said over the microphone that I had tried to vote twice--”

REPLY BY THE PRESIDENT PRO TEMPORE

      President Pro Tempore Winsley: “No, I did not. I think they had counted you. You were standing twice and they may have counted

you twice. Nobody said you voted twice.”

      Senator Roach: “Well, I think the record may show otherwise, but I wanted everyone to know that certainly I did not try to vote twice, but wanted to change my vote, which we do all the time after a roll is taken. Thank you.”

      President Pro Tempore Winsley: “Thank you for clarifying that.”

MOTION

      Senator Brandland moved that the following amendment be adopted:

       Beginning on page 24, line 21, strike all of sections 707 through 712

       Renumber the remaining section consecutively and correct internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Brandland on page 24, line 21, to Substitute Senate Bill No. 5728.

      The motion by Senator Brandland carried and the amendment was adopted.

MOTION

      Senator Kastama moved that the following amendment by Senators Kastama and Esser be adopted:

       On page 28, after line 16, insert the following:

       "NEW SECTION. Sec. 801. A new section is added to chapter 4.28 RCW to read as follows:

       In any action for personal injuries, wrongful deaths, or damage to property, in which the harm is alleged to have been caused by an act which violates the appropriate standard of care to be exercised by an individual licensed, certified, or registered by the state under Title 18 or 19 RCW or by the supreme court, the person initiating the action shall serve upon each defendant an affidavit within ninety days of service of process initiating the action. The affidavit shall be executed by a person whose license, certification, or registration is identical to the defendant. If there is more than one defendant, there shall be an affidavit for each defendant. Each affidavit shall contain a statement that the affiant believes there is a reasonable probability that the defendant's conduct does not meet the standard of care required to be exercised by the defendant. The affiant shall have no financial interest in the outcome of the trial and have at least five years of professional experience in the same vocation as the defendant who is the subject of the affidavit. The affidavit shall be filed within sixty days of the defendant answering the initial complaint.

       In the event a defendant refuses to provide information necessary to allow the execution of an affidavit, the court may, upon motion of the plaintiff, waive the requirement following a hearing on the motion. No hearing on the motion shall be held in fewer than forty-five days following the receipt by the defendant of the request to provide the information.

       The court may, upon motion by the defendant and a showing of good cause, grant only one additional period of forty-five days, following the motion to waive the requirement of an affidavit, for the defendant to provide the information required under this section."

       Renumber the sections consecutively and correct any internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Kastama and Esser on page 28, line 16, to Substitute Senate Bill No. 5728.

      The motion by Senator Kastama carried and the amendment was adopted.

MOTION

      Senator Sheahan moved that the following amendment by Senators Sheahan and Hargrove be adopted:

       Beginning on page 4, line 29, strike all of section 302 and insert the following:

       "Sec. 302. RCW 4.56.110 and 1989 c 360 s 19 are each amended to read as follows:

       Interest on judgments shall accrue as follows:

       (1) Judgments founded on written contracts, providing for the payment of interest until paid at a specified rate, shall bear interest at the rate specified in the contracts: PROVIDED, That said interest rate is set forth in the judgment.

       (2) All judgments for unpaid child support that have accrued under a superior court order or an order entered under the administrative procedure act shall bear interest at the rate of twelve percent.

       (3) Judgments founded on the tortious conduct of individuals or other entities, whether acting in their personal or representative capacities, shall bear interest from the date of entry at two percentage points above the equivalent coupon issue yield, as published by the board of governors of the federal reserve system, of the average bill rate for twenty-six week treasury bills as determined at the first bill market auction conducted during the calendar month immediately preceding the date of entry. In any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.

       (4) Except as provided under subsections (1) ((and)), (2), and (3) of this section, judgments shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof((: PROVIDED, That)). In any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered. The method for determining an interest rate prescribed by this subsection is also the method for determining the "rate applicable to civil judgments" for purposes of RCW 10.82.090.

       NEW SECTION. Sec. 303. The rate of interest required by sections 301 and 302(3), chapter . . ., Laws of 2003 (sections 301 and 302(3) of this act) applies to the accrual of interest as of the date of entry of judgment with respect to a judgment that is entered on or after the effective date of this act.

       Sec. 304. RCW 19.52.025 and 1986 c 60 s 1 are each amended to read as follows:

       Each month the state treasurer shall compute the highest rate of interest permissible under RCW 19.52.020(1), and the rate of interest required by RCW 4.56.110(3) and 4.56.115, for the succeeding calendar month. The treasurer shall file ((this rate)) these rates with the state code reviser for publication in the next available issue of the Washington State Register in compliance with RCW 34.08.020(8)."

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Sheahan and Hargrove on page 4, line 29, to Substitute Senate Bill No. 5728.

      The motion by Senator Sheahan carried and the amendment was adopted.

      There being no objection, the Senate resumed consideration of the amendment by Senator Sheahan on page 4, line 29, to Substitute Senate Bill No. 5728, which was moved and deferred earlier today.

      There being no objection, the amendment by Senator Sheahan on page 4, line 29, to Substitute Senate Bill No. 5728 was withdrawn.

MOTIONS

      On motion of Senator Sheahan, the following title amendments were considered simultaneously and were adopted:

       On page 1, line 2 of the title, after "4.56.250," insert "7.70.100,"

       On page 1, line 2 of the title, after "4.56.110," insert "19.52.025,"

       On page 1, line 5 of the title, strike "a new section to chapter 4.28 RCW" and insert "new sections to chapter 4.28 RCW"

       On page 1, line 5 of the title, strike "adding a new section to chapter 4.28 RCW;"

       On page 1, beginning on line 7 of the title, after "4.16 RCW;" strike all material through "RCW;" on line 11

      On motion of Senator Sheahan, the rules were suspended, Engrossed Substitute Senate Bill No. 5728 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 5728.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 5728 and the bill passed the Senate by the following vote: Yeas, 28; Nays, 21; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Brandland, Carlson, Deccio, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Johnson, McCaslin, Morton, Mulliken, Oke, Parlette, Rasmussen, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, West and Zarelli - 28.

     Voting nay: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Reardon, Regala, Sheldon, B., Shin, Spanel, Thibaudeau and Winsley - 21.

      ENGROSSED SUBSTITUTE SENATE BILL NO. 5728, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

      At 11:35 a.m, on motion of Senator Sheahan, the Senate recessed until 12:30 p.m.

      The Senate was called to order at 12:37 p.m. by President Pro Tempore Winsley.

SECOND READING

CONFIRMATION OF GUBERNATORIAL APPOINTMENTS

MOTION

      On motion of Senator Jacobsen, Gubernatorial Appointment No. 9064, Thomas W. Malone, as a member of the Board of Trustees for Seattle, South Seattle and North Seattle Community Colleges District No. 6, was confirmed.

APPOINTMENT OF THOMAS W. MALONE

      The Secretary called the roll. The appointment was confirmed by the following vote: Yeas, 47; Nays, 0; Absent, 2; Excused, 0.

     Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Rossi, Schmidt, Sheahan, Sheldon, B., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 47.

     Absent: Senators Roach and Sheldon, T. - 2.

INTRODUCTION OF SPECIAL GUEST

      The President Pro Tempore introduced Jacob Yamane, a ten year old guest of Senator Mulliken, who was seated on the rostrum.

SECOND READING

      ENGROSSED HOUSE BILL NO. 1977, by Representatives Grant, DeBolt, Orcutt and Roach

Clarifying use tax provisions.

      The bill was read the second time.

MOTION

      On motion of Senator Sheahan, the rules were suspended, Engrossed House Bill No. 1977 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Engrossed House Bill No. 1977.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed House Bill No. 1977 and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 49.

      ENGROSSED HOUSE BILL NO. 1977, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

      SENATE BILL NO. 5807, by Senators Parlette, Deccio, Brandland, Mulliken, Carlson, Honeyford, Hewitt, Stevens, Oke, Sheahan and Winsley

Revising the basic health plan.

MOTIONS

      On motion of Senator Parlette, Substitute Senate Bill No. 5807 was substituted for Substitute Senate Bill No. 5807 and the substitute bill was placed on second reading and read the second time.

      Senator Parlette moved that the following striking amendment by Senators Parlette and Deccio be adopted:

       Strike everything after the enacting clause and insert the following:

       "Sec. 1. RCW 70.47.010 and 2000 c 79 s 42 are each amended to read as follows:

       (1)(a) The legislature finds that limitations on access to health care services for enrollees in the state, such as in rural and underserved areas, are particularly challenging for the basic health plan. Statutory restrictions have reduced the options available to the administrator to address the access needs of basic health plan enrollees. It is the intent of the legislature to authorize the administrator to develop alternative purchasing strategies to ensure access to basic health plan enrollees in all areas of the state, including: (i) The use of differential rating for managed health care systems based on geographic differences in costs; and (ii) limited use of self-insurance in areas where adequate access cannot be assured through other options.

       (b) In developing alternative purchasing strategies to address health care access needs, the administrator shall consult with interested persons including health carriers, health care providers, and health facilities, and with other appropriate state agencies including the office of the insurance commissioner and the office of community and rural health. In pursuing such alternatives, the administrator shall continue to give priority to prepaid managed care as the preferred method of assuring access to basic health plan enrollees followed, in priority order, by preferred providers, fee for service, and self-funding.

       (2) The legislature further finds that:

       (a) A significant percentage of the population of this state does not have reasonably available insurance or other coverage of the costs of necessary basic health care services;

       (b) This lack of basic health care coverage is detrimental to the health of the individuals lacking coverage and to the public welfare, and results in substantial expenditures for emergency and remedial health care, often at the expense of health care providers, health care facilities, and all purchasers of health care, including the state; and

       (c) The use of managed health care systems has significant potential to reduce the growth of health care costs incurred by the people of this state generally, and by low-income pregnant women, and at-risk children and adolescents who need greater access to managed health care.

       (3) The purpose of this chapter is to provide or make more readily available necessary basic health care services in an appropriate setting to working persons and others who lack coverage, at a cost to these persons that does not create barriers to the utilization of necessary health care services. To that end, this chapter establishes a program to be made available to those residents not eligible for medicare or medicaid who share in a portion of the cost ((or who pay the full cost)) of receiving basic health care services from a managed health care system.

       (4) It is not the intent of this chapter to provide health care services for those persons who are presently covered through private employer-based health plans, nor to replace employer-based health plans. However, the legislature recognizes that cost-effective and affordable health plans may not always be available to small business employers. Further, it is the intent of the legislature to expand, wherever possible, the availability of private health care coverage and to discourage the decline of employer-based coverage.

       (5)(a) It is the purpose of this chapter to acknowledge the initial success of this program that has (i) assisted thousands of families in their search for affordable health care; (ii) demonstrated that low- income, uninsured families are willing to pay for their own health care coverage to the extent of their ability to pay; and (iii) proved that local health care providers are willing to enter into a public-private partnership as a managed care system.

       (b) ((As a consequence, the legislature intends to extend an option to enroll to certain citizens above two hundred percent of the federal poverty guidelines within the state who reside in communities where the plan is operational and who collectively or individually wish to exercise the opportunity to purchase health care coverage through the basic health plan if the purchase is done at no cost to the state.)) It is ((also)) the intent of the legislature to allow employers and other financial sponsors to financially assist such individuals to purchase health care through the program so long as such purchase does not result in a lower standard of coverage for employees.

       (c) The legislature intends that, to the extent of available funds, the program be available throughout Washington state ((to subsidized and nonsubsidized enrollees. It is also the intent of the legislature to enroll subsidized enrollees first, to the maximum extent feasible)).

       (d) The legislature directs that the basic health plan administrator identify enrollees who are likely to be eligible for medical assistance and assist these individuals in applying for and receiving medical assistance. When possible, the administrator and the department of social and health services shall implement a seamless system to coordinate eligibility determinations and benefit coverage for enrollees of the basic health plan and medical assistance recipients.

       Sec. 2. RCW 70.47.020 and 2000 c 79 s 43 are each amended to read as follows:

       As used in this chapter:

       (1) "Washington basic health plan" or "plan" means the system of enrollment and payment for basic health care services, administered by the plan administrator through participating managed health care systems, created by this chapter.

       (2) "Administrator" means the Washington basic health plan administrator, who also holds the position of administrator of the Washington state health care authority.

       (3) "Loss ratio" means incurred claims expense as a percentage of rate charged.

       (4) "Managed health care system" means: (a) Any health care organization, including health care providers, insurers, health care service contractors, health maintenance organizations, or any combination thereof, that provides directly or by contract basic health care services, as defined by the administrator and rendered by duly licensed providers, to a defined patient population enrolled in the plan and in the managed health care system; or (b) a self-funded or self-insured method of providing insurance coverage to ((subsidized)) enrollees provided under RCW 41.05.140 and subject to the limitations under RCW 70.47.100(((7))) (6).

       (((4) "Subsidized enrollee")) (5) "Eligible person" means an individual, or an individual plus the individual's spouse or dependent children: (a) Who is not eligible for medicare or medicaid, other than the basic health plus or maternity benefits program; (b) who is not confined or residing in a government-operated institution, unless he or she meets eligibility criteria adopted by the administrator in consultation with appropriate state and local government agencies; (c) who applies for coverage prior to the effective date of this act or is a United States citizen or legally admitted for permanent residence; (d) who resides in an area of the state served by a managed health care system participating in the plan; (((d))) (e) whose gross family income ((at the time of enrollment)) does not exceed two hundred percent of the federal poverty level or a lesser amount as determined by the legislature in the biennial operating budget as adjusted for family size and determined annually by the federal department of health and human services; ((and (e))) (f) whose family liquid assets do not exceed an amount established by the administrator in rule; and (g) who chooses to obtain basic health care coverage from a particular managed health care system in return for periodic payments to the plan. ((To the extent that state funds are specifically appropriated for this purpose, with a corresponding federal match, "subsidized enrollee" also means an individual, or an individual's spouse or dependent children, who meets the requirements in (a) through (c) and (e) of this subsection and whose gross family income at the time of enrollment is more than two hundred percent, but less than two hundred fifty-one percent, of the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services.

       (5) "Nonsubsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children: (a) Who is not eligible for medicare; (b) who is not confined or residing in a government-operated institution, unless he or she meets eligibility criteria adopted by the administrator; (c) who resides in an area of the state served by a managed health care system participating in the plan; (d) who chooses to obtain basic health care coverage from a particular managed health care system; and (e) who pays or on whose behalf is paid the full costs for participation in the plan, without any subsidy from the plan.))

       (6) "Subsidy" means the difference between the amount of periodic payment the administrator makes to a managed health care system on behalf of ((a subsidized)) an enrollee plus the administrative cost to the plan of providing the plan to that ((subsidized)) enrollee, and the amount determined to be the ((subsidized)) enrollee's responsibility under RCW 70.47.060(2). The level of subsidy provided may be based on the lowest cost plans, as defined by the administrator.

       (7) "Premium" means a periodic payment, based upon gross family income which an individual, their employer, or another financial sponsor makes to the plan as consideration for enrollment in the plan as ((a subsidized enrollee or a nonsubsidized)) an enrollee.

       (8) "Rate" means the amount, negotiated by the administrator with and paid to a participating managed health care system, that is based upon the enrollment of ((subsidized and nonsubsidized)) enrollees in the plan and in that system.

       Sec. 3. RCW 70.47.030 and 1995 2nd sp.s. c 18 s 913 are each amended to read as follows:

       (((1))) The basic health plan trust account is hereby established in the state treasury. Any nongeneral fund-state funds collected for this program shall be deposited in the basic health plan trust account and may be expended without further appropriation. Moneys in the account shall be used exclusively for the purposes of this chapter, including payments to participating managed health care systems on behalf of enrollees in the plan and payment of costs of administering the plan.

       ((During the 1995-97 fiscal biennium, the legislature may transfer funds from the basic health plan trust account to the state general fund.

       (2) The basic health plan subscription account is created in the custody of the state treasurer. All receipts from amounts due from or on behalf of nonsubsidized enrollees shall be deposited into the account. Funds in the account shall be used exclusively for the purposes of this chapter, including payments to participating managed health care systems on behalf of nonsubsidized enrollees in the plan and payment of costs of administering the plan. The account is subject to allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures.

       (3) The administrator shall take every precaution to see that none of the funds in the separate accounts created in this section or that any premiums paid either by subsidized or nonsubsidized enrollees are commingled in any way, except that the administrator may combine funds designated for administration of the plan into a single administrative account.))

       Sec. 4. RCW 70.47.040 and 1993 c 492 s 211 are each amended to read as follows:

       (1) The Washington basic health plan is created as a program within the Washington state health care authority. The administrative head and appointing authority of the plan shall be the administrator of the Washington state health care authority. ((The administrator shall appoint a medical director. The medical director and up to five other employees of the plan shall be exempt from the civil service law, chapter 41.06 RCW.))

       (2) The administrator shall employ such other staff as are necessary to fulfill the responsibilities and duties of the administrator((, such staff to be)). Except for a maximum of six employees designated as exempt by the administrator, such staff is subject to the civil service law, chapter 41.06 RCW. In addition, the administrator may contract with third parties for services necessary to carry out its activities where this will promote economy, avoid duplication of effort, and make best use of available expertise. Any such contractor or consultant shall be prohibited from releasing, publishing, or otherwise using any information made available to it under its contractual responsibility without specific permission of the plan. The administrator may call upon other agencies of the state to provide available information as necessary to assist the administrator in meeting its responsibilities under this chapter, which information shall be supplied as promptly as circumstances permit.

       (3) The administrator may appoint such technical or advisory committees as he or she deems necessary. The administrator shall appoint a standing technical advisory committee that is representative of health care professionals, health care providers, and those directly involved in the purchase, provision, or delivery of health care services, as well as consumers and those knowledgeable of the ethical issues involved with health care public policy. Individuals appointed to any technical or other advisory committee shall serve without compensation for their services as members, but may be reimbursed for their travel expenses pursuant to RCW 43.03.050 and 43.03.060.

       (4) The administrator may apply for, receive, and accept grants, gifts, and other payments, including property and service, from any governmental or other public or private entity or person, and may make arrangements as to the use of these receipts, including the undertaking of special studies and other projects relating to health care costs and access to health care.

       (5) Whenever feasible, the administrator shall reduce the administrative cost of operating the program by adopting joint policies or procedures applicable to both the basic health plan and employee health plans.

       Sec. 5. RCW 70.47.060 and 2001 c 196 s 13 are each amended to read as follows:

       The administrator ((has the following powers and duties)) shall:

       (1) ((To)) Design and ((from time to time)) periodically revise a schedule of covered ((basic health care)) services pursuant to section 8 of this act, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care. In addition, the administrator may, to the extent that funds are available, offer as basic health plan services chemical dependency services, mental health services and organ transplant services; however, no one service or any combination of these three services shall increase the actuarial value of the basic health plan benefits by more than five percent excluding inflation, as determined by the office of financial management. ((All subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive covered basic health care services 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 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 48.47.030, and such other factors as the administrator deems appropriate.))

       (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))) Premiums may also vary based on wellness activities.

       (a) All enrollees in any participating managed health care system shall be entitled to receive covered basic health care services in return for premium payments to the plan. Premiums, at a minimum, shall be as set forth by the legislature in the biennial operating budget.

       (b) 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)) an enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator. Organizations and individuals paid to deliver basic health plan services which choose to sponsor enrollment shall pay, at a minimum, the amount set forth by the legislature in the biennial operating budget.

       (((d) To)) (3) Develop, as an offering by every health carrier providing coverage identical to the basic health plan, as configured on January 1, ((2001)) 2004, a basic health plan model plan with uniformity in enrollee cost-sharing requirements.

       (((3) To)) (4) Design and implement a structure of enrollee cost- sharing consistent with section 8 of this act due a managed health care system from ((subsidized and nonsubsidized)) enrollees. ((The structure shall discourage inappropriate enrollee utilization of health care services, and may utilize copayments, deductibles, and other cost- sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services.

       (4) To)) (5) Limit enrollment ((of persons who qualify for subsidies)) so as to prevent an overexpenditure of appropriations for ((such purposes)) the basic health plan. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment and, if necessary, disenroll persons, until the administrator finds the danger no longer exists. Any such disenrollment shall be in reverse order of income with enrollees with higher household incomes disenrolled first. Between persons with the same level of income, the one who has been on the plan the longest shall be disenrolled first. Any person disenrolled under this subsection who remains eligible and wishes to reenroll shall be given priority over new applicants when enrollment is reopened.

       (((5) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020. The level of subsidy provided to persons who qualify may be based on the lowest cost plans, as defined by the administrator.

       (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)) (6) 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 ((for either subsidized enrollees, or nonsubsidized enrollees, or both)) pursuant to section 9 of this act. 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.))

       (7) Subject to subsection (5) of this section, enroll any eligible person for whom a completed application is submitted.

       (a) In determining eligibility, the administrator shall:

       (i) Require submission of income tax returns, or verification that income tax returns were not filed, and recent income history for any applicant, the applicant's spouse, and his or her dependents;

       (ii) Not count funds received by a family as part of participation in the adoption support program authorized under RCW 26.33.320 and 74.13.100 through 74.13.145 as income;

       (iii) Not reduce gross family income for self-employed persons by noncash-flow expenses such as, but not limited to, depreciation, amortization, and home office deductions, as defined by the United States internal revenue service.

       (b) The administrator may establish minimum enrollment periods and conditions under which those who disenroll for no apparent good cause may reenroll.

       (c) The enrollment of a child does not require the enrollment of his or her parent or parents.

       (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 on a reasonable schedule defined by the authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. Funds received by a family as part of participation in the adoption support program authorized under RCW 26.33.320 and 74.13.100 through 74.13.145 shall not be counted toward a family's current gross family income for the purposes of this chapter. When an enrollee fails to report income or income changes accurately, the administrator shall have the authority either to bill the enrollee for the amounts overpaid by the state or to impose civil penalties of up to two hundred percent of the amount of subsidy overpaid due to the enrollee incorrectly reporting income. The administrator shall adopt rules to define the appropriate application of these sanctions and the processes to implement the sanctions provided in this subsection, within available resources. 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 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 reenroll 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 may require that a business owner pay at least an amount equal to what the employee pays after the state pays its portion of the subsidized 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)) persons eligible pursuant to RCW 70.47.020. 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)) (10) 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 or actuarially equivalent 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)) (11) 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)) (12) 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.

       (16) In consultation with appropriate state and local government agencies, to establish criteria defining eligibility for persons confined or residing in government-operated institutions.

       (17) To)) (13)(a) Disenroll any enrollee:

       (i) Whose premium payments to the plan are delinquent;

       (ii) Who, as reported by health care providers and confirmed by the administrator, repeatedly fails to pay the required copayments or coinsurance in full on a timely basis;

       (iii) Who does not meet the eligibility standards established in RCW 70.47.020(6); or

       (iv) As necessary to meet the requirements of subsection (5) of this section;

       (b) To verify continued eligibility, check employment security payroll records at least once every twelve months on all enrollees; require any enrollee whose family income as indicated by payroll records exceeds that upon which his or her enrollment and subsidy level is based to document his or her current family income as a condition of continued eligibility; and require any enrollee for whom employment security payroll records cannot be obtained to document his or her current family income at least once every six months;

       (c) Provide an enrollee subject to disenrollment with advance written notice. Upon disenrollment, the administrator shall promptly notify the managed health care system in which the enrollee has been enrolled, and shall not be responsible for payment of health care services provided to the enrollee, including if applicable members of the enrollee's family, after the date of notification.

       (14) Administer the premium discounts provided under RCW 48.41.200(3)(a) (i) and (ii) pursuant to a contract with the Washington state health insurance pool.

       Sec. 6. RCW 70.47.100 and 2000 c 79 s 35 are each amended to read as follows:

       (1) A managed health care system participating in the plan shall do so by contract with the administrator and shall provide, directly or by contract with other health care providers, covered basic health care services to each enrollee covered by its contract with the administrator as long as payments from the administrator on behalf of the enrollee are current. A participating managed health care system may offer, without additional cost, health care benefits or services not included in the schedule of covered services under the plan. A participating managed health care system shall not give preference in enrollment to enrollees who accept such additional health care benefits or services. Managed health care systems participating in the plan shall not discriminate against any potential or current enrollee based upon health status, sex, race, ethnicity, or religion. The administrator may receive and act upon complaints from enrollees regarding failure to provide covered services or efforts to obtain payment, other than authorized copayments, for covered services directly from enrollees, but nothing in this chapter empowers the administrator to impose any sanctions under Title 18 RCW or any other professional or facility licensing statute.

       (2) The plan shall allow, at least annually, an opportunity for enrollees to transfer their enrollments among participating managed health care systems serving their respective areas. The administrator shall establish a period of at least twenty days in a given year when this opportunity is afforded enrollees, and in those areas served by more than one participating managed health care system the administrator shall endeavor to establish a uniform period for such opportunity. The plan shall allow enrollees to transfer their enrollment to another participating managed health care system at any time upon a showing of good cause for the transfer.

       (3) Prior to negotiating with any managed health care system, the administrator shall determine, on an actuarially sound basis, the reasonable cost of providing the schedule of basic health care services, expressed in terms of upper and lower limits, and recognizing variations in the cost of providing the services through the various systems and in different areas of the state.

       (4) In negotiating with managed health care systems for participation in the plan, the administrator shall adopt a uniform procedure that includes at least the following:

       (a) The administrator shall issue a request for proposals, including standards regarding the quality of services to be provided; financial integrity of the responding systems; and responsiveness to the unmet health care needs of the local communities or populations that may be served;

       (b) The administrator shall then review responsive proposals and may negotiate with respondents to the extent necessary to refine any proposals;

       (c) The administrator may then select one or more systems to provide the covered services within a local area; and

       (d) The administrator may adopt a policy that gives preference to respondents, such as nonprofit community health clinics, that have a history of providing quality health care services to low-income persons.

       (5) ((The administrator may contract with a managed health care system to provide covered basic health care services to either subsidized enrollees, or nonsubsidized enrollees, or both.

       (6))) The administrator may establish procedures and policies to further negotiate and contract with managed health care systems following completion of the request for proposal process in subsection (4) of this section, upon a determination by the administrator that it is necessary to provide access, as defined in the request for proposal documents, to covered basic health care services for enrollees.

       (((7))) (6)(a) The administrator shall implement a self-funded or self-insured method of providing insurance coverage to ((subsidized)) enrollees, as provided under RCW 41.05.140, if one of the following conditions is met:

       (i) The authority determines that no managed health care system other than the authority is willing and able to provide access, as defined in the request for proposal documents, to covered basic health care services for all ((subsidized)) enrollees in an area; or

       (ii) The authority determines that no other managed health care system is willing to provide access, as defined in the request for proposal documents, for one hundred thirty-three percent of the statewide benchmark price or less, and the authority is able to offer such coverage at a price that is less than the lowest price at which any other managed health care system is willing to provide such access in an area.

       (b) The authority shall initiate steps to provide the coverage described in (a) of this subsection within ninety days of making its determination that the conditions for providing a self-funded or self- insured method of providing insurance have been met.

       (c) The administrator may not implement a self-funded or self- insured method of providing insurance in an area unless the administrator has received a certification from a member of the American academy of actuaries that the funding available in the basic health plan self-insurance reserve account is sufficient for the self- funded or self-insured risk assumed, or expected to be assumed, by the administrator.

       NEW SECTION. Sec. 7. A new section is added to chapter 70.47 RCW to read as follows:

       If the administrator determines that a person, because he or she incorrectly reported information upon which eligibility is based, was enrolled and subsidized at a level for which he or she was not eligible, the administrator shall either bill the enrollee for the amounts overpaid by the state or impose civil penalties of up to two hundred percent of the amount of subsidy overpaid due to the enrollee's incorrect information.

       NEW SECTION. Sec. 8. A new section is added to chapter 70.47 RCW to read as follows:

       The basic health plan shall reflect the conscientious, explicit, and judicious use of current best evidence with regard to patient care. In designing the schedule of benefits and enrollee cost-sharing, the administrator shall:

       (1) Include preventive care services, based on the recommendations of the United States preventive services task force, with no enrollee cost-sharing;

       (2) Include all services necessary for prenatal, postnatal, and well child care. However, with respect to coverage for enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the plan shall not cover such services except to the extent that they 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;

       (3) Include other benefits and enrollee cost-sharing reasonably expected to result in a plan with an average total per member per month cost to be established by the legislature in the biennial operating budget.

       (4) Include a separate schedule of basic health care services for those eighteen years of age and younger; and

       (5) Structure enrollee cost-sharing to discourage inappropriate utilization, encourage enrollee responsibility including the use of cost-effective services and products, and promote quality care. Costs imposed on enrollees should not be a barrier to utilization of appropriate and necessary health care services.

       NEW SECTION. Sec. 9. A new section is added to chapter 70.47 RCW to read as follows:

       In contracting with a participating managed health care system, the administrator shall:

       (1) 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;

       (2) Ensure that the system actively encourages enrollees to engage in wellness activities and receive preventive services consistent with the recommendations of the United States preventive services task force;

       (3) Ensure that the system actively seeks to identify and encourage quality, cost-effective care by its providers based on evidence of best practices, and promote the use of quality providers by its enrollees;

       (4) Ensure that the system actively assists the administrator in identifying enrollees with chronic or other high-cost conditions and provides them with coordinated care through disease and demand management programs;

       (5) Ensure that the system actively encourages innovative health care service delivery methods that improve enrollee access to care and health outcomes.

       (6) Ensure that the rate charged by the system is reasonably expected to result in a loss ratio to the system for the basic health plan, of no less than eighty-seven percent.

       Sec. 10. RCW 70.47.130 and 2000 c 5 s 21 are each amended to read as follows:

       (((1))) The activities and operations of the Washington basic health plan under this chapter, including those of managed health care systems to the extent of their participation in the plan, are exempt from the provisions and requirements of Title 48 RCW except:

       (((a))) (1) Benefits as provided in RCW 70.47.070;

       (((b))) (2) Managed health care systems are subject to the provisions of RCW 48.43.500, 70.02.045, 48.43.505 through 48.43.535, 43.70.235, 48.43.545, 48.43.550, 70.02.110, and 70.02.900; and

       (((c))) (3) Persons appointed or authorized to solicit applications for enrollment in the basic health plan, including employees of the health care authority, must comply with chapter 48.17 RCW. For purposes of this subsection (((1)(c))) (3), "solicit" does not include distributing information and applications for the basic health plan and responding to questions((; and

       (d) Amounts paid to a managed health care system by the basic health plan for participating in the basic health plan and providing health care services for nonsubsidized enrollees in the basic health plan must comply with RCW 48.14.0201.

       (2) The purpose of the 1994 amendatory language to this section in chapter 309, Laws of 1994 is to clarify the intent of the legislature that premiums paid on behalf of nonsubsidized enrollees in the basic health plan are subject to the premium and prepayment tax. The legislature does not consider this clarifying language to either raise existing taxes nor to impose a tax that did not exist previously)).

       Sec. 11. RCW 48.43.005 and 2001 c 196 s 5 and 2001 c 147 s 1 are each reenacted and amended to read as follows:

       Unless otherwise specifically provided, the definitions in this section apply throughout this chapter.

       (1) "Adjusted community rate" means the rating method used to establish the premium for health plans adjusted to reflect actuarially demonstrated differences in utilization or cost attributable to geographic region, age, family size, and use of wellness activities.

       (2) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time.

       (3) "Basic health plan model plan" means a health plan as required in RCW 70.47.060(((2)(d))) (3).

       (4) "Basic health plan services" means that schedule of covered health services, including the description of how those benefits are to be administered, that are required to be delivered to an enrollee under the basic health plan, as revised from time to time.

       (5) "Catastrophic health plan" means:

       (a) In the case of a contract, agreement, or policy covering a single enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, one thousand five hundred dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least three thousand dollars; and

       (b) In the case of a contract, agreement, or policy covering more than one enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, three thousand dollars and an annual out- of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least five thousand five hundred dollars; or

       (c) Any health benefit plan that provides benefits for hospital inpatient and outpatient services, professional and prescription drugs provided in conjunction with such hospital inpatient and outpatient services, and excludes or substantially limits outpatient physician services and those services usually provided in an office setting.

       (6) "Certification" means a determination by a review organization that an admission, extension of stay, or other health care service or procedure has been reviewed and, based on the information provided, meets the clinical requirements for medical necessity, appropriateness, level of care, or effectiveness under the auspices of the applicable health benefit plan.

       (7) "Concurrent review" means utilization review conducted during a patient's hospital stay or course of treatment.

       (8) "Covered person" or "enrollee" means a person covered by a health plan including an enrollee, subscriber, policyholder, beneficiary of a group plan, or individual covered by any other health plan.

       (9) "Dependent" means, at a minimum, the enrollee's legal spouse and unmarried dependent children who qualify for coverage under the enrollee's health benefit plan.

       (10) "Eligible employee" means an employee who works on a full-time basis with a normal work week of thirty or more hours. The term includes a self-employed individual, including a sole proprietor, a partner of a partnership, and may include an independent contractor, if the self-employed individual, sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer, but does not work less than thirty hours per week and derives at least seventy-five percent of his or her income from a trade or business through which he or she has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form. Persons covered under a health benefit plan pursuant to the consolidated omnibus budget reconciliation act of 1986 shall not be considered eligible employees for purposes of minimum participation requirements of chapter 265, Laws of 1995.

       (11) "Emergency medical condition" means the emergent and acute onset of a symptom or symptoms, including severe pain, that would lead a prudent layperson acting reasonably to believe that a health condition exists that requires immediate medical attention, if failure to provide medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy.

       (12) "Emergency services" means otherwise covered health care services medically necessary to evaluate and treat an emergency medical condition, provided in a hospital emergency department.

       (13) "Enrollee point-of-service cost-sharing" means amounts paid to health carriers directly providing services, health care providers, or health care facilities by enrollees and may include copayments, coinsurance, or deductibles.

       (14) "Grievance" means a written complaint submitted by or on behalf of a covered person regarding: (a) Denial of payment for medical services or nonprovision of medical services included in the covered person's health benefit plan, or (b) service delivery issues other than denial of payment for medical services or nonprovision of medical services, including dissatisfaction with medical care, waiting time for medical services, provider or staff attitude or demeanor, or dissatisfaction with service provided by the health carrier.

       (15) "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.

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

       (a) A person regulated under Title 18 or 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.

       (17) "Health care service" means that service offered or provided by health care facilities and health care providers relating to the prevention, cure, or treatment of illness, injury, or disease.

       (18) "Health carrier" or "carrier" 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, or a health maintenance organization as defined in RCW 48.46.020.

       (19) "Health plan" or "health benefit plan" means any policy, contract, or agreement offered by a health carrier to provide, arrange, reimburse, or pay for health care services except the following:

       (a) Long-term care insurance governed by chapter 48.84 RCW;

       (b) Medicare supplemental health insurance governed by chapter 48.66 RCW;

       (c) Limited health care services offered by limited health care service contractors in accordance with RCW 48.44.035;

       (d) Disability income;

       (e) Coverage incidental to a property/casualty liability insurance policy such as automobile personal injury protection coverage and homeowner guest medical;

       (f) Workers' compensation coverage;

       (g) Accident only coverage;

       (h) Specified disease and hospital confinement indemnity when marketed solely as a supplement to a health plan;

       (i) Employer-sponsored self-funded health plans;

       (j) Dental only and vision only coverage; and

       (k) Plans deemed by the insurance commissioner to have a short-term limited purpose or duration, or to be a student-only plan that is guaranteed renewable while the covered person is enrolled as a regular full-time undergraduate or graduate student at an accredited higher education institution, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

       (20) "Material modification" means a change in the actuarial value of the health plan as modified of more than five percent but less than fifteen percent.

       (21) "Preexisting condition" means any medical condition, illness, or injury that existed any time prior to the effective date of coverage.

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

       (23) "Review organization" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, health care service contractor as defined in RCW 48.44.010, or health maintenance organization as defined in RCW 48.46.020, and entities affiliated with, under contract with, or acting on behalf of a health carrier to perform a utilization review.

       (24) "Small employer" or "small group" means any person, firm, corporation, partnership, association, political subdivision, or self- employed individual that is actively engaged in business that, on at least fifty percent of its working days during the preceding calendar quarter, employed no more than fifty eligible employees, with a normal work week of thirty or more hours, the majority of whom were employed within this state, and is not formed primarily for purposes of buying health insurance and in which a bona fide employer-employee relationship exists. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer. Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition. The term "small employer" includes a self-employed individual or sole proprietor. The term "small employer" also includes a self-employed individual or sole proprietor who derives at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year.

       (25) "Utilization review" means the prospective, concurrent, or retrospective assessment of the necessity and appropriateness of the allocation of health care resources and services of a provider or facility, given or proposed to be given to an enrollee or group of enrollees.

       (26) "Wellness activity" means an explicit program of an activity consistent with department of health guidelines, such as, smoking cessation, injury and accident prevention, reduction of alcohol misuse, appropriate weight reduction, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education for the purpose of improving enrollee health status and reducing health service costs.

       NEW SECTION. Sec. 12. The following acts or parts of acts are each repealed:

       (1) RCW 70.47.015 (Expanded enrollment--Findings--Intent--Enrollee premium share--Expedited application and enrollment process--Commission for agents and brokers) and 1997 c 337 s 1 & 1995 c 265 s 1;

       (2) RCW 70.47.080 (Enrollment of applicants--Participation limitations) and 1993 c 492 s 213 & 1987 1st ex.s. c 5 s 10;

       (3) RCW 70.47.090 (Removal of enrollees) and 1987 1st ex.s. c 5 s 11; and

       (4) RCW 70.47.115 (Enrollment of persons in timber impact areas) and 1992 c 21 s 7 & 1991 c 315 s 22.

       NEW SECTION. Sec. 13. The health care authority shall report to the appropriate committees of the legislature on the implementation of this act by October 1, 2003.

       NEW SECTION. Sec. 14. 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 takes effect immediately, except that changes to the basic health plan benefit design and eligibility standards other than the eligibility standard in RCW 70.47.020(5)(c) are not required to be implemented until January 1, 2004."

MOTION

      Senator Brown moved the following amendments to the striking amendment by Senators Parlette and Deccio be considered simultaneously and be adopted:

       On page 5, line 5 of the amendment, after "plan.))", insert the following:

       "Upon approval of a pilot project under section 12 of this act, "subsidized enrollee" also means an individual, or an individual's spouse or dependent children, who meets the requirements of (a), (b), (c), (e) and (f) of this subsection, who resides within the state of Washington, and who qualifies for a premium subsidy under a pilot project approved under section 12 of this act."

       On page 5, line 7 of the amendment, after "system" insert "or through payments developed as part of a pilot project approved under section 12 of this act"

       On page 23, after line 34 of the amendment, insert the following:

       “NEW SECTION. Sec. 12. A new section is added to chapter 70.47 RCW to read as follows:

       (1) The administrator, in coordination with the department of social and health services medical assistance administration and interested entities, will identify and design pilot projects to improve health care coverage access, including review of proposals by entities that are able to demonstrate to the administrator that they have received funding through a reliable source, such as a federal grant program, that can reasonably be expected to be adequate to complete their portion of the pilot project. The administrator may approve pilot projects that are found to be feasible. Pilot projects may include applying basic health plan subsidy payments toward employer-sponsored health insurance or other health insurance premium shares, rather than as direct payments to managed health care systems participating in the basic health plan.

       (2) The schedule of benefits for persons enrolled through an approved pilot project may differ from the benefits offered through the basic health plan, but must be reasonably comparable in value to those benefits.

       (3) Any pilot project approved by the administrator must provide coverage through managed health care systems.

       (4) By November 1, 2003, the administrator and the secretary of the department of social and health services shall jointly report to the health care committees of the senate and the house of representatives on their progress in developing the pilot projects authorized in this act, the anticipated implementation date of any pilot project under development, and the resources needed to implement the pilot project."

       Renumber the sections consecutively and correct any internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendments by Senator Brown on pages 5 lines 5 and 7, and page 23, line 34, page to the striking amendment by Senators Parlette and Deccio to Substitute Senate Bill No. 5807.

      The motion by Senator Brown failed and the amendments to the striking amendment were not adopted.

      The President Pro Tempore declared the question before the Senate to be the adoption of the striking amendment by Senators Parlette and Deccio to Senate Bill No. 5807.

      Debate ensued.

      The motion by Senator Parlette carried and the striking amendment was adopted.

MOTIONS

      On motion of Senator Parlette, the following title amendment was adopted:

       On page 1, line 1 of the title, after "plan;" strike the remainder of the title and insert "amending RCW 70.47.010, 70.47.020, 70.47.030, 70.47.040, 70.47.060, 70.47.100, and 70.47.130; reenacting and amending RCW 48.43.005; adding new sections to chapter 70.47 RCW; creating a new section; repealing RCW 70.47.015, 70.47.080, 70.47.090, and 70.47.115; and declaring an emergency."

      On motion of Senator Parlette, the rules were suspended, Engrossed Substitute Senate Bill No. 5807 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 5807.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 5807 and the bill passed the Senate by the following vote: Yeas, 33; Nays, 16; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Brandland, Carlson, Deccio, Doumit, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Johnson, Kastama, McCaslin, Morton, Mulliken, Oke, Parlette, Rasmussen, Reardon, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Shin, Stevens, Swecker, West, Winsley and Zarelli - 33.

     Voting nay: Senators Brown, Eide, Fairley, Franklin, Fraser, Jacobsen, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Regala, Sheldon, B., Spanel and Thibaudeau - 16.

      ENGROSSED SUBSTITUTE SENATE BILL NO. 5807, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

      SENATE BILL NO. 5971, by Senators Fairley, Zarelli, Poulsen, Rossi, Hargrove, Deccio, Rasmussen and Winsley

Managing residential habilitation centers.

      The bill was read the second time.

MOTION

      Senator Fraser moved that the following amendment by Senators Fraser and Winsley be adopted:

       On page 2, after "Sec. 3." on line 29, insert the following:

       "RCW 41.40.820 and 2000 c 247 sec 309 are each amended to read as follows:

       (1) NORMAL RETIREMENT. Any member who is at least age sixty-five and who has:

       (a) Completed ten service credit years; or

       (b) Completed five service credit years, including twelve service credit months after attaining age fifty-four; or

       (c) Completed five service credit years by the transfer payment date specified in RCW 41.40.795, under the public employees' retirement system plan 2 and who transferred to plan 3 under RCW 41.40.795;

shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.790.

       (2) EARLY RETIREMENT. Any member who has attained at least age fifty-five and has completed at least ten years of service shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.790, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

       (3) ALTERNATE EARLY RETIREMENT. Any member who has completed at least thirty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.790, except that a member retiring pursuant to this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

       (4) ALTERNATE EARLY RETIREMENT. Any member who has completed at least twenty service credit years in public employment, was employed at Fircrest School after January 1, 2003, and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.620, except that a member retiring under this subsection shall have the retirement allowance reduced by three percent per year to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five."

       Renumber the sections consecutively and correct any internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Fraser and Winsley on page 2, line 29, to Senate Bill No. 5971.

      The motion by Senator Fraser failed on a rising vote and the amendment was not adopted.

MOTION

      Senator Brown moved that the following amendment be adopted:

       On page 2, after "Sec. 3. " on line 29, insert the following:

       "RCW 28C.04.390 and 1999 c 121 sec. 1 are each amended to read as follows:

       (1) The college board worker retraining program funds shall be used for training programs and related support services, including financial aid, counseling, referral to training resources, job referral, and job development that:

       (a) Are consistent with the unified plan for work force development;

       (b) Provide increased enrollments for dislocated workers and Fircrest employees who lost their jobs with the closure of Fircrest school;

       (c) Provide customized training opportunities for dislocated workers and Fircrest employees who lost their jobs with the closure of Fircrest school; and

       (d) Provide increased enrollments and support services, including financial aid for those students not receiving unemployment insurance benefits, that do not replace or supplant any existing enrollments, programs, support services, or funding sources.

       (2) The college board shall develop a plan for use of the worker retraining program funds in conjunction with the work force training customer advisory committee established in subsection (3) of this section. In developing the plan the college board shall:

       (a) Provide that applicants for worker retraining program funds shall solicit financial support for training programs and give priority in receipt of funds to those applicants which are most successful in matching public dollars with financial support;

       (b) Provide that applicants for worker retraining program funds shall develop training programs in partnership with local businesses, industry associations, labor, and other partners as appropriate and give priority in receipt of funds to those applicants who develop customized training programs in partnership with local businesses, industry associations, and labor organizations;

       (c) Give priority in receipt of funds to those applicants serving rural areas;

       (d) Ensure that applicants receiving worker retraining program funds gather information from local work force development councils on employer work force needs, including the needs of businesses with less than twenty-five employees; and

       (e) Provide for specialized vocational training at a private career school or college at the request of a recipient eligible under subsection (1)(b) of this section. Available tuition for the training is limited to the amount that would otherwise be payable per enrolled quarter to a public institution.

       (3) The executive director of the college board shall appoint a work force training customer advisory committee by July 1, 1999, to:

       (a) Assist in the development of the plan for the use of the college board worker retraining program funds and recommend guidelines to the college board for the operation of worker retraining programs;

       (b) Recommend selection criteria for worker retraining programs and grant applicants for receipt of worker retraining program grants;

       (c) Provide advice to the college board on other work force development activities of the community and technical colleges;

       (d) Recommend selection criteria for job skills grants, consistent with criteria established in this chapter and chapter 121, Laws of 1999. Such criteria shall include a prioritization of job skills applicants in rural areas;

       (e) Recommend guidelines to the college board for the operation of the job skills program; and

       (f) Recommend grant applicants for receipt of job skills program grants.

       (4) Members of the work force training customer advisory committee shall consist of three college system representatives selected by the executive director of the college board, three representatives of business selected from nominations provided by statewide business organizations, and three representatives of labor selected from nominations provided by a statewide labor organization representing a cross-section of workers in the state."

       Renumber the sections consecutively and correct any internal references accordingly.

      Debate ensued.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Brown on page 2, line 29, to Senate Bill No. 5971.

      The motion by Senator Brown carried and the amendment was adopted.

MOTION

      Senator Keiser moved that the following amendment by Senators Keiser and Winsley be adopted:

       On page 2, after "Sec. 3. " on line 29, insert the following:

       "RCW 50.62.020 and 1987 c 284 sec 2 are each amended to read as follows:

       Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

       (1) "Job service" means the employment assistance program of the employment security department;

       (2) "Employment assistance" means services to unemployed persons focused on and measured by the obtaining of employment;

       (3) "Labor exchange" means those activities which match labor supply and labor demand, including recruitment, screening, and referral of qualified workers to employers;

       (4) "Special account of the administrative contingency fund" means that fund under RCW 50.24.014 established within the administrative contingency fund of the employment security department which provides revenue for the purposes of this chapter.

       (5) "Continuous wage and benefit history" means an information and research system utilizing a longitudinal data base containing information on both employment and unemployment.

       (6) "Long-term unemployed" means demographic groups of unemployment insurance claimants identified by the employment security department pursuant to RCW 50.62.040(1)(e) which have the highest percentages of persons who have drawn at least fifteen weeks of unemployment insurance benefits or have the highest percentage of persons who have exhausted their unemployment insurance benefits.

       (7) "Older unemployed workers" means unemployment insurance claimants who are at least fifty years of age.

       (8) "Unemployed Fircrest workers" are those persons employed at the Fircrest school whose jobs were eliminated by the closure of Fircrest school.

       Sec 4. RCW 50.62.030 and 1995 c 135 sec 4 are each amended to read as follows:

       Job service resources shall be used to assist with the reemployment of unemployed workers using the most efficient and effective means of service delivery. The job service program of the employment security department may undertake any program or activity for which funds are available and which furthers the goals of this chapter. These programs and activities shall include, but are not limited to:

       (1) Giving unemployed Fircrest workers, older unemployed workers and the long-term unemployed the highest priority for all services made available under this section. The employment security department shall make the services provided under this chapter available to the unemployed Fircrest workers, older unemployed workers and the long-term unemployed as soon as they register under the employment assistance program;

       (2) Supplementing basic employment services, with special job search and claimant placement assistance designed to assist unemployment insurance claimants to obtain employment;

       (3) Providing employment services, such as recruitment, screening, and referral of qualified workers, to agricultural areas where these services have in the past contributed to positive economic conditions for the agricultural industry; and

       (4) Providing otherwise unobtainable information and analysis to the legislature and program managers about issues related to employment and unemployment.

       Sec. 5. RCW 50.04.075 and 1984 c 181 sec. 1 are each amended to read as follows:

       "Dislocated worker" means any individual who:

       (1) Has been terminated or received a notice of termination from employment;

       (2) Is eligible for or has exhausted entitlement to unemployment compensation benefits; and

       (3) Is unlikely to return to employment in the individual's principal occupation or previous industry because of a diminishing demand for their skills in that occupation or industry or is an employee at Fircrest school whose job was terminated by the closure of Fircrest school."

       Renumber the sections consecutively and correct any internal references accordingly.

      Debate ensued.

      Senator Betti Sheldon demanded a roll call and the demand was sustained.

      The President Pro Tempore declared the question before the Senate to be the roll call on the adoption of the amendment by Senators Keiser and Winsley on page 2, line 29, to Senate Bill No. 5971.

ROLL CALL

      The Secretary called the roll and the amendment was adopted by the following vote: Yeas, 25; Nays, 24; Absent, 0; Excused, 0.

     Voting yea: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Haugen, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Sheldon, B., Shin, Spanel, Thibaudeau and Winsley - 25.

     Voting nay: Senators Benton, Brandland, Carlson, Deccio, Esser, Finkbeiner, Hale, Hewitt, Honeyford, Horn, Johnson, McCaslin, Morton, Mulliken, Oke, Parlette, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, West and Zarelli - 24.

MOTION

      Senator Shin moved that the following amendment by Senators Shin, Zarelli, Rossi, Fairley and Kohl-Welles be adopted:

       On page 4, after line 7, after "71A.10.070." insert the following:

" Consultation shall include assurance that residents transferring from one residential habilitation center to another be provided comparable or better services and care at their new residential habilitation center."

       Renumber the sections consecutively and correct any internal references accordingly.

MOTION

      Senator Thibaudeau requested that an oral amendment be adopted.

POINT OF ORDER

      Senator West: “A point of order, Madam President. Oral amendments are not generally allowed. We have done it once in a while in the past, but by Reed’s Rules and our rules, amendments must be in writing on the desk.”

REPLY BY PRESIDENT PRO TEMPORE WINSLEY

      President Pro Tempore Winsley: “Thank you. Perhaps, Senator Thibaudeau, that when this measure gets over to the House, you could make a suggestion to the committee.”

POINT OF INQUIRY

      Senator Fairley: “Senator Shin, would you agree that a good indication of comparable quality of care and services would be that which meets the federal and state certification requirements for these facilities?”

      Senator Shin: “Yes, that would be good.”

      Senator Fairley: “With that, I would recommend adoption of this amendment.”

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Shin, Zarelli, Rossi, Fairley and Kohl-Welles on page 4, line 7, to Senate Bill No. 5971.

      The motion by Senator Shin carried and the amendment was adopted.

MOTIONS

      On motion of Senator Zarelli, the following title amendments were adopted:

       On page 1, on line 2 of the title, after "28A.190.020;", insert "28C.04.390;".

       On page 1, on line 2 of the title, after "28A.190.020;", insert "50.04.075; 50.62.020; 50.62.030;".

      On motion of Senator Zarelli, the rules were suspended, Engrossed Senate Bill No. 5971 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Debate ensued.

      Senators Sheahan, West and Hale demanded the previous question and the demand was sustained.

      The President Pro Tempore declared the question before the Senate to be shall the main question be now put.

      The demand for the previous question failed.

      Further debate ensued.

PERSONAL PRIVILEGE

      Senator Thibaudeau: “A point of personal privilege, Madam President. My point of personal privilege is that I have been terribly concerned about our talking about the employees and what might happen to them and how easy it is going to be for people to transfer and nobody has talked about patient’s needs. I know somebody is going to stand up and tell me I am out of order, so I am going to sit down.”

      The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Engrossed Senate Bill No. 5971.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed Senate Bill No 5971, and the bill passed the Senate by the following vote: Yeas, 37; Nays, 12; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Brandland, Carlson, Esser, Fairley, Finkbeiner, Franklin, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Johnson, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Stevens, Swecker, West and Zarelli - 37.

     Voting nay: Senators Brown, Deccio, Doumit, Eide, Fraser, Jacobsen, Kastama, Keiser, Roach, Spanel, Thibaudeau and Winsley - 12.

      ENGROSSED SENATE BILL NO. 5971, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

      SENATE BILL NO. 5264, by Senators West, Swecker, Jacobsen, Sheahan, Hargrove and Hale

Providing transportation to the lieutenant governor's spouse for activities conducted on behalf of the state.

MOTIONS

      On motion of Senator West, Substitute Senate Bill No. 5264 was substituted for Senate Bill No. 5264 and the substitute bill was placed on second reading and read the second time.

      On motion of Senator West, the rules were suspended, Substitute Senate Bill No. 5264 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      The President declared the question before the Senate to be the roll call on the final passage of Substitute Senate Bill No. 5264.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute Senate Bill No. 5264 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 1; Excused, 0.

     Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 48.

     Absent: Senator Mulliken - 1.

      SUBSTITUTE SENATE BILL NO. 5264, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

      At 2:25 p.m., on motion of Senator Sheahan, the Senate adjourned until 2:00 p.m., Sunday, March 16, 2003.

BRAD OWEN, President of the Senate

MILTON H. DOUMIT, Jr., Secretary of the Senate