WHEREAS, Men and women of the United States Armed Forces have been protecting our country since its inception; and

      WHEREAS, The terrorist attacks of September 11, 2001, gave rise to a new type of war; and

      WHEREAS, Operation Enduring Freedom, which began in October 2001 in Afghanistan against the Taliban, has claimed the lives of 374 United States service members; and

      WHEREAS, Nine servicemen from Washington state have been killed while deployed in Afghanistan, Pakistan, and the Philippines: Sgt. Nathan Paul Hays from Wilbur; Staff Sgt. Juan Miguel Ridout from Oak Harbor; Spc. Harley D.R. Miller from Spokane; Chief Warrant Officer 2nd Class Clint Jeffrey Prather from Cheney; Staff Sgt. Travis Wayne Nixon from Parsons; 1st Lt. Forrest Pinkerton Ewens from Gig Harbor; Spec. Thomas F. Allison from Tacoma; Sgt. Jay A. Blessing from Tacoma; and Sgt. 1st Class Nathan Ross Chapman from Puyallup; and

      WHEREAS, The War on Terror expanded to include Iraq with the launch of "Operation Iraqi Freedom" in March 2003; and

      WHEREAS, This operation has taken the lives of 3,279 United States service members in Iraq and Kuwait; and

      WHEREAS, 67 of those fallen servicemen and women called Washington their home: 1st Lt. Michael Robert Adams from Seattle; Sgt. Corey James Aultz from Port Orchard; Spec. Ryan M. Bell from Colville; Spc. Robert Theodore Benson from Spokane; Staff Sgt. Marvin Leslie Best from Prosser; Cpl. Joseph Phillip Bier from Centralia; Chief Petty Officer Gregory J. Billiter from Oak Harbor; Spec. Joshua M. Boyd from Seattle; Lance Cpl. Cedric Eugene Bruns from Vancouver; Staff Sgt. Christopher Bunda from Bremerton; Staff Sgt. Michael Lee Burbank from Bremerton; Pfc. Cody Shea Calavan from Lake Stevens; 1st Lt. Jamie Lynn Campbell from Ephrata; Lance Cpl. Daniel Chavez from Seattle; Petty Officer 1st Class Regina R. Clark from Centralia; 1st Lt. Benjamin Joseph Colgan from Kent; Sgt. Jason Chesley Cook from Malott; Staff Sgt. Casey J. Crate from Spanaway; Sgt. Jacob Henry Demand from Palouse; Spc. Christopher Wayne Dickinson from Seattle; Spc. Blain Matthew Ebert from Washtucna; Lance Cpl. Adam Quitugua Emul from Vancouver; Sgt. Damien T. Ficek from Pullman; Lance Cpl. Kane Michael Funke from Vancouver; Sgt. Mickel Davied Garrigus from Elma; Pfc. Devon James Gibbons from Port Orchard; Pfc. Jason Hanson from Forks; Spc. Justin William Hebert from Arlington; Sgt. Jacob Robert Herring from Kirkland; Spc. Jordan William Hess from Marysville; Maj. Alan Ricardo Johnson from Yakima; Cpl. Jeremiah Jewel Johnson from Vancouver; Sgt. Curt Edward Jordan Jr. from Greenacres; Spc. Eric Dean King from Vancouver; Sgt. 1st Class Steven Michael Langmack from Seattle; Sgt. Velton Locklear III from Lacey; Pfc. Duane E. Longstreth from Tacoma; Sgt. Charles E. Matheny IV from Stanwood; Maj. Megan Malia McClung from Coupeville; Petty Officer 1st Class Joseph Adam McSween from Oak Harbor; Staff Sgt. Tracey Lee Melvin from Seattle; Cpl. Darrel James Morris from Spokane Valley; Sgt. 1st Class Lawrence Emerson Morrison from Yakima; Master Sgt. Robb Gordon Needham from Vancouver; Sgt. Juston Dean Norton from Rainier; Staff Sgt. Ronald Lee Paulsen from Vancouver; Sgt. Travis Dwight Pfister from Richland; Lance Cpl. Caleb John Powers from Mansfield; Spc. David Joseph Ramsey from Tacoma; Capt. Gregory Alm Ratzlaff from Olympia; Sgt. Yadir Gumercindo Reynoso from Wapato; Sgt. James Daniel Riekena from Redmond; Staff Sgt. David George Ries from Vancouver; Cpl. Steven Arnold Rintamaki from Lynnwood; Cpl. Jonathan Jose Santos from Bellingham; Spc. Jeremiah Wesley Schmunk from Richland; Pfc. Kerry David Scott from Concrete; Sgt. Jeffrey Ross Shaver from Maple Valley; Lance Cpl. Dustin Lee Sides from Yakima; Cpl. Jeffrey Brian Starr from Snohomish; Lance Cpl. Shane Clanin Swanberg from Kirkland; Staff Sgt. Abraham George Twitchell from Yelm; Staff Sgt. Christopher Jon Vanderhorn from Pierce County; Pfc. Andrew Martin Ward from Kirkland; Sgt. Lucas Timothy White from Moses Lake; Lance Cpl. Nathan Raymond Wood from Kirkland; and Spc. Curtis Lorenza Wooten III from Spanaway; and

      WHEREAS, These men and women who died defending our nation leave family and friends in Washington mourning their loss;

      NOW, THEREFORE, BE IT RESOLVED, That the members of the Washington State Senate honor the fallen servicemen and women who gave their lives for this country with courage, self-sacrifice, and patriotic devotion; and

      BE IT FURTHER RESOLVED, That the Washington State Senate extend appreciation and solace to the families of the servicemen and women who died fighting for this great nation; and

      BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Secretary of the Senate to members of the Washington State Senate, the families of the aforementioned servicemen and women, and to the United States Air Force, Army, Coast Guard, National Guard, Navy, and the Marine Corps.

REMARKS BY SENATOR SHIN

Senator Shin: “I feel very honored and humble to stand before you to present this resolution. It’s amazing how experience helps itself. Sixty years ago I was a little orphaned boy in the street corner begging for food to survive. During the Korean War one of those American soldiers took me as a house boy while we were in a combat situation. In the morning, you folks going to combat, in the evening some of you come back without an arm. Some of you come back without a leg, some of you never came back. I wonder why, stranger from foreign land, come to a country like Korea, given their lives and from then on my heart just wept for them. I was adopted by one of you. 1955, I came here. I got drafted in the Army. 1958, went to Fort Hood, Texas, taking basic training. There we made a commit and swear that we will only address name, rank and serial number at any circumstances. My unit second armor division, was sent to Germany during 1950 Lebanon crisis. Part of my unit’s second armor division went in TDY to Lebanon crisis. I was one of them and then and there in the airfield I saw some of the bodies got killed and I wonder why but these kind of experience held me to appreciate those soldiers men and women in uniform even to devote your own lives in defense for freedom and defense of the country. This is why I bring you, this is a small resolution to honor our fallen soldiers in the Middle East. You heard the names. So far 3,653 soldiers died and from our state just adding one more, seventy-five as of today. I like to bear my testimony to you that their sacrifice is not in vain. I wish you’d join me in honoring these families in the gallery and valiant men and women uniform. I’m getting so emotional I can not speak anymore but to express my heart-felt feeling. Mr. President, with you permission I’d like to read a letter from President Abraham Lincoln to Mrs. Lydia Bixby, 1864 whose son died in a combat situation.

      'I feel how weak and fruitless must be any words of mine which should attempt to beguile you from the grief of a loss so overwhelming. But I cannot refrain from tendering to you the consolation that may be found in the thanks of the Republic they died to save. I pray that our Heavenly Father may assuage the anguish of your bereavement, and leave you only the cherished memory of the loved and lost, and the solemn pride that must be yours to have laid so costly a sacrifice upon the altar of freedom.'

      And I join President Lincoln expressing sorrow, condolence and thank you for all the families who gave their lives in defense of freedom. Thank you Mr. President.”

REMARKS BY SENATOR HOBBS

Senator Hobbs: “Mr. President, Specialist William Mayor was a great company clerk when I was the XO of the HHC 136 Infantry. He joined the Army late. He had a degree in Culinary Arts. You know, he really didn’t want to be in the Army, he wanted to be a sous chef and I always relied on him on getting, finding what the men felt about the company and the company commander and myself and some of it wasn’t very good. He told us how it was and he would put together trips for the company, Ski trips for the men. He’d cook for them. Before I transferred out of there to take on another assignment at Fort Benning, I had this pasta maker. Hand crank pasta maker my dad gave to me because he didn’t want, I was never going to use it. I gave it to him, I said; 'Specialist you know, I admire your conviction to this company and the hard work you’ve done and I know that you want to get out of the Army and become a sous chef. I don’t know why. That’s a weird dream but you know if you want to follow it fine.' I gave him the pasta maker. He was so happy that he got that. We emailed each other. The unit First Armor Division got deployed to Iraq and I was at Fort Benning. He had told that he had gotten a contract to work for Hilton to be a sous chef and he was getting out. I found out that he got killed. He was doing a convoy operations and that’s when I knew the reality of war. You know you’re always trained for it as a soldier especially as an infantry officer. Then I got deployed to Iraq, did my mission, and one week before I was suppose to leave, one week before I was suppose to leave, we had a rocket attack and several rockets land, one between fifty and one-hundred yards away. Another great American hero, not from Washington State, Sergeant Cunningham, I didn’t know it was Sergeant Cunningham but I had to go over there and do the blast analysis and walking up there you know debris was every where. And you see pictures of him and his family with the two children that he had and you find out Sergeant Cunningham was going to leave one week later just like me. We was going to be on the same plane and he, the unique thing about him, he served over twenty years. He was going to retire but because he had the dedication and loyalty and he believed in service. He wanted to be with his unit. Those are the type of men and women who are serving out there today, who are giving their lives. I want to thank you, Senator, for writing up this resolution. Thank you so much. You know, we watch on the news, stuff on there about Imus and sports, it’s almost like we forget and they're just a number. It’s not a number. Those are names. Those are fathers. Those are daughters, mothers. This is more than just a piece of paper and I hope we never forget. Thank you.”

REMARKS BY SENATOR MCCASLIN

Senator McCaslin: “Thank you Mr. President. I hope I don’t get as emotional as Senator Hobbs but Senator Shin asked me yesterday if I’d say a couple of words. I just want to tell you that my father was in World War I in the Navy. My older brother was in four years. He was two years in a 'tin can,' which was a destroyer in the Pacific. I served twenty-seven months but I remember World War II, many of you may not know it, but one they lost a son or a daughter, they would hang gold star in the window. There were three Sullivan brothers in World War II that were on the same ship and when it was destroyed by the Japanese. The services then changed their procedure allowing brothers to serve together but those are sad memories when we saw the gold star in the window. It was a terrible thing to lose a son or a daughter because nothing can compensate for it, not words or papers or resolutions but I thank Senator Shin bringing it forth. I just finished a book by Bradley, the 'Flags of our Fathers.' It’s a horrible book about Iwo Jima and why we need to take the island. It tells us the story of twenty-two thousand Japanese not on the island but in the island. They had three stories underground. They dropped five-thousand, eight-hundred tons of bombs on that Island and when they started there was about four-hundred in campus and when they went under there was seven –hundred, in other words, the Japanese improved their position while we bombed them. I think they lost all twenty-two thousand and I think we lost fifteen or twenty thousand. War is hell. Unfortunately it’s necessary some times. World War I, World War II, the Korean War, Vietnam War, he served in Iraq, we’re losing men there. I hope we accomplish something. One of the things we’ve accomplished in I and II was our freedoms. I’ve lived in Australia and I’ve lived in India. This is the finest country in the world bar none. We are so fortunate to have our system of government and our freedoms. We should all appreciate them. Thank you Mr. President.”

REMARKS BY SENATOR SWECKER

Senator Swecker: “Thank you Mr. President. Rising to speak in favor of the resolution, commending it’s sponsor. So many families throughout the nation have lost loved ones in Iraq or Afghanistan since that war started. Many Washington families have lost loved ones as well-including some from my own legislative district. When I served in Vietnam, several of my buddies were lost in battle. I so remember the pain I felt when they were killed. I remember them as they were nearly forty years ago. I must remind myself that today they would in their late fifties or early sixties. They gave up a lot, but my memories of them are good. I hope this resolution helps us remember these men and women forty years from today. Thank you.”

REMARKS BY SENATOR HAUGEN

Senator Haugen: “Thank you Mr. President. Well this last weekend we lost three sailors from Whidbey Island and with the permission of the body I would like to amend this resolution to add the two men from Oak Harbor who call Washington their home. It’s Chief Petty Officer Gregory Billiter and Petty Officer First Class Joseph Adam McSween. They made the ultimate sacrifice and I know we can never be up to date anytime with what’s happening but this happened this weekend. Their families and the community are in great sorrow and I think this would be one way to help.”

REPLY BY THE PRESIDENT

President Owen: “If there are no objections, Senator, the names will be added.”

REMARKS BY SENATOR Prentice

Senator Prentice: “Thank you Mr. President. Yes, sometimes these really do hit home. On the bottom line says, 'Staff Sergeant Abraham George Twitchell from Yelm' and he was the son of Mary Anne, my legislative assistant since 1992. I had known this young man. He was proud to be a Marine but I hate to think each time we read about these they're names and statistics. I always think, having lost a son in the Vietnam war, and knowing how it truly just tears you apart. It’s something that I don’t talk about often because it does tear you apart and I would shedding tears if I did it much but knowing how many mothers asking how many wives, how many children, will not have that person home with them. They deserve to have a dad to grow up with and yes, I remember the five Sullivan brothers, because one of the things that they did not tell the family when they were out at sea on the ships, as people could hear them, one of them, yelling as the sharks were eating him. Some of these stories are so terrible and I remember at the end of World War II they told the servicemen don’t talk to the families, don’t tell them. They told us, don’t ask. I thought, of course, they don’t want us to know how absolutely terrible war is and that we can almost understand why some soldiers who were really decent people do brutal awful things and people would say they were always a decent person but war brutalizes everybody who's near it. I would just say, if we really were aware of how terrible war is we would be very reluctant to enter into it. Thank you Senator Shin.”

REMARKS BY SENATOR FRANKLIN

Senator Franklin: “Thank you Mr. President and ladies and gentlemen of the Senate; rising to support this resolution and to thank the good Senator Shin for bringing it forward. Yes, war is terrible and as the good Senator McCaslin says, sometimes it’s necessary. I think with us here at home the greatest nation that we a lot of times here at home don’t really realize what is going on. Those who have served and are serving in order for us to have some measure of comfort, if you will, or sleep without fear that our shores are protected. How the present day, let’s go back, World War I, up until this day of Iraqi Freedom and those men and women who are serving there are doing a great job and we know when there is a war, lives are going to be lost. We’d hope that that would not happen. It’s painful. It’s painful to families, but our job here is to help them, to be of service to them, to do what we can in order to re-iterate them back and to bring them home and to provide for their needs. What upsets me is what they are coming back to now and the type of treatment that they are getting. When we look and see and read what had happened at Walter Reed that is no way to treat our returning veterans and I’m not saying it’s happening here but we have got to see that they get the services that they need to have. When I attend, and I visited cemeteries, it’s sad but there’s a proud moment. To go to Arlington, to visit the cemeteries in France, to go to Auburn, to go, eventually, to Eastern side of the Mountain and to be able to meditate and to say here, they have given their lives for our freedom and we must see that their families, their children receive the services they need. When I was actively practice at Madigan and I also cared for Vietnam casualties and they came in and I took care of them and were heart-felt moments also of injuries that they received. We can never say thank you enough to the families, to the spouses to all of those families who might have lost loved ones but we are here to try to help you and to support you and to those deceased veterans that each time we see their names in our Washingtonians and not only them but across the country that we will say that they gave their lives for our freedom and they would not have given their lives in vain. We will remember them. Thank you.”

REMARKS BY SENATOR CLEMENTS

Senator Clements: “Thank you Mr. President. Thank you Senator Shin. On this list are three people, these men that died in my district. One of the elected officials in town is Lance Corporal Sides, a dear friend of mine, and lost her family member. That was the first loss. Sergeant Yadir Gumercindo Reynoso, I never met his mother. His sister called one day and said that when he went to Iraq his mother cosigned on his cell phone with him and the young man had rung up quite a few thousand dollars in telephone bills. It took about a year with some help with some lobbyist here and the cell phone company but while this mother and family were grieving, there was great pressure on this poor family to pay a debt and the goodness of people they forgave it. And then here a few days ago this body decided to help Victoria Johnson. Major Allen Ricardo Johnson died and we gave a special recognition to her in Ways & Means and the death benefit was made whole. I don’t think Victoria would mind this comment, we talked about the personal tragedy but every night when she goes to bed she puts his cologne the pillow next to her. There is a memorial out here, where there’s a brick with my father and my wife’s father who was with Doolittle Raiders, thirty seconds over Tokyo plane number thirteen. He crash landed and spent months walking out of China and today as we celebrate those people who have fallen we have to hold in prayers those people that go off to war. I have a nephew today on his way to Iraq as a Marine. The great sacrifices that people have made and the sacrifices today the living are making. Today we honor both. I thank you Senator Shin.”

REMARKS BY SENATOR ROCKEFELLER

Senator Rockefeller: “Thank you Mr. President. Hearing these names here that were recited this morning so diverse and hearing the names of communities from which they came, the home towns of all of us, reminded me that these individuals are part of the fabric of our communities and we share their loss with their families and with their loved one and community towns people every where. That loss is embedded inside each of us as well. I think we can never repay the debt that we owe to these patriots or to their families but we can, as we love our country, cherish the memory of these gallant men and women and their families who endure the scars and wounds of war. We can cherish the fact that they were prepared to stand up in defense of freedom and in defense of each of us. Let us resolve today to demonstrate our continuing care and compassion and support for each of those family members as they endure the aftermath of this ultimate sacrifice. At the same time, let us also remember those who continue to serve in harms way, because they too deserve our love and support and I’m honored to join with Senator Shin in behalf of this resolution. Thank you.”

REMARKS BY SENATOR PARLETTE

Senator Parlette: “Thank you Mr. President. I rise in support of this resolution. There is a gentleman from my district, Marine Lance Caleb John Powers from Mansfield. I spoke at his memorial service two years ago. I spoke at his memorial service the day after I returned from visiting Japan because the city of Wenatchee has a sister city in Misawa, Japan and my husband were part of the delegation. That was a very moving experience for me because I was in Japan on my fifty-ninth birthday and my father, who will be eighty-four years old tomorrow, April 13^th , served as a Marine in World War II and he was over seas at that time. I actually was born six days after World War II ended and my dad always told me how many points I was worth because he came a father he got to move up when he returned so he got home in November because he was a new father. But the experience that I will always remember when visiting Japan was riding down in that parade route in a jeep with my husband and a military officer and behind us was a Japanese van and in the streets were all the Japanese waving the American flag and the band was playing over, over and over ‘Stars and Stripes Forever’ and, all of a sudden, I thought about it because it was my birthday and that feeling of how lucky I was that my father came home. Also, the feeling that if only we can have world peace and let’s remember those young men and women who are still fighting for our country and for others. They are fighting for world peace and all those freedoms we in the United States and only in some parts of the country have. Thank you Senator Shin for sponsoring this.”

      Senators Shin, Hobbs, McCaslin, Swecker, Haugen, Prentice, Franklin, Clements, Rockefeller and Parlette spoke in favor of adoption of the resolution.

      The President declared the question before the Senate to be the adoption of Senate Resolution No. 8682.

      The motion by Senator Shin carried and the resolution was adopted by voice vote.

INTRODUCTION OF SPECIAL GUESTS

      The President welcomed the friends and families of service men and women and all the armed forces who were seated in the gallery.

INTRODUCTION OF SPECIAL GUESTS

The President welcomed and introduced First Gentleman, Mike Gregoire, who was seated at the rostrum.

      The President welcome and introduced Washington State Department of Affairs, Director John Lee.

REMARKS BY COLONEL MICHAEL MCCAFFREE,

COMMANDER, 81ST BRIGADE COMBAT TEAM

      Colonel McCaffree: “Lieutant Governor Owen, Senators, Mr. Gregoire, Mr. Lee, distinguished guests, Gold Star families, Soldiers, Sailors, Airmen and Marines. Thank you for inviting us here today to participate in this Senate Resolution honoring our fallen warriors from Washington State. As a soldier who spent more than thirteen months in Iraq with the 81^st Brigade Combat Team of your Washington National Guard, I can say I know what it is like to lose friends and comrades in arms. Several of the names that were read this morning were soldiers that I knew and served with. I see other members of our 81^st Brigade in the gallery, all veterans of combat in Iraq. I also see other members of Washington National Guard units, both Army and Air, as well as other soldiers, sailors, airmen, marines and veterans. The soldiers, sailors, airmen and Marines that are here today are all veterans of combat in many far flung as part of America’s global war on terrorism. While we all know the pain of losing friends on the battle field, our experience does not compare to the pain and anguish of the Gold Star families that have lost their loved ones. I would like to especially acknowledge the Gold Star families that are here today in the gallery to witness this resolution recognizing our friends and their family members who gave their lives in service to our nation. The warriors that we recognize today represent many of America’s best. They were men and women that were not content to sit idly by and wait for others to do the jobs that needed to be done for America, to help keep all of us free and safe. While there are many ways to serve America, the men and women we honor today agreed to actively contribute to America through service in our Military. None of them sought to give their lives but all knew that it was possible and believed that the risks of service to the nation were worth it. Those of us that continue to serve America through Military service believe the same way. On behalf of our Gold Star families and all the Military services and components, I would like to thank Senator Shin for sponsoring this resolution. I would also like to thank the many other Senators that supported this resolution to honor our fallen warriors. We will remember them always. God Bless you all and thank you for your service.”

REMARKS BY THE PRESIDENT

President Owen: “ The President would like to make one final introduction and that is I would appreciate it very much if those people serving in the Military service that are with us today would stand and be recognized as well.”

MOTION

At 12:24 p.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

AFTERNOON SESSION

The Senate was called to order at 1:30 p.m. by President Owen.

MOTION

      On motion of Senator Eide, the Senate reverted to the first order of business.

REPORTS OF STANDING COMMITTEES

April 12, 2007

SGA 9253          KEVEN ROJECKI, appointed July 15, 2006, for the term ending June 30, 2012, as Member of the Gambling Commission. Reported by Committee on Labor, Commerce, Research & Development

MAJORITY recommendation: That said appointment be confirmed. Signed by Senators Kohl-Welles, Chair; Keiser, Vice Chair; Clements, Franklin, Holmquist, Murray and Prentice

Passed to Committee on Rules for second reading.

April 12, 2007

SGA 9275          JUDY SCHURKE, appointed March 5, 2007, for the term ending at the governor's pleasure, as a Director of the Department of Labor and Industries. Reported by Committee on Labor, Commerce, Research & Development

MAJORITY recommendation: That said appointment be confirmed. Signed by Senators Kohl-Welles, Chair; Keiser, Vice Chair; Clements, Franklin, Holmquist, Murray and Prentice

Passed to Committee on Rules for second reading.

MOTION

On motion of Senator Eide, all measures listed on the Standing Committee report were referred to the committees as designated.

MOTION

      On motion of Senator Eide, the Senate advanced to the fifth order of business.

INTRODUCTION AND FIRST READING OF HOUSE BILLS

SHB 2378          by House Committee on Transportation (originally sponsored by Representatives Flannigan, Jarrett, Clibborn, Eddy, Seaquist and Roberts)

AN ACT Relating to construction of new vessels for Washington state ferries; adding a new section to chapter 47.60 RCW; creating a new section; and declaring an emergency.

MOTION

      On motion of Senator Eide, the rules were suspended and that Substitute House Bill No. 2378 was placed on the second reading calendar.

MOTION

At 1:36 p.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

The Senate was called to order at 1:49 p.m. by President Owen.

MOTION

      On motion of Senator Eide, the Senate reverted to the fourth order of business.

MESSAGE FROM THE HOUSE

April 11, 2007

MR. PRESIDENT:

The House has passed the following bills:

      SUBSTITUTE SENATE BILL NO. 5568,

and the same is herewith transmitted.

RICHARD NAFZIGER, Chief Clerk

MOTION

      On motion of Senator Eide, the Senate advanced to the sixth order of business.

SECOND READING

      HOUSE BILL NO. 1270, by Representatives Kirby, Roach and Moeller

      Modifying provisions of the consumer loan act with respect to loan restrictions.

      The measure was read the second time.

MOTION

Senator Berkey moved that the following amendment by Senator Berkey be adopted.

      On page 2, after line 29, insert the following:

      "NEW SECTION. Sec. 2. A new section is added to chapter 30.04 RCW to read as follows:

      (1) A creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007 may consider whether any person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007, in connection with an application for or an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007.

      (2) Notwithstanding any other provision of law, it shall not be an unfair practice or a denial of civil rights for a creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007, to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007, offered to or entered into with a covered member or dependent because such person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007. Nothing in this subsection permits any such creditor to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, to a covered member or dependent, based upon status protected by chapter 49.60 RCW other than the honorably discharged veteran or military status of the covered member or dependent.

      NEW SECTION. Sec. 3. A new section is added to chapter 31.04 RCW to read as follows:

      (1) A creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007 may consider whether any person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007, in connection with an application for or an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007.

      (2) Notwithstanding any other provision of law, it shall not be an unfair practice or a denial of civil rights for a creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007, to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007, offered to or entered into with a covered member or dependent because such person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007. Nothing in this subsection permits any such creditor to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, to a covered member or dependent, based upon status protected by chapter 49.60 RCW other than the honorably discharged veteran or military status of the covered member or dependent.

      NEW SECTION. Sec. 4. A new section is added to chapter 31.12 RCW to read as follows:

      (1) A creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007 may consider whether any person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007, in connection with an application for or an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007.

      (2) Notwithstanding any other provision of law, it shall not be an unfair practice or a denial of civil rights for a creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007, to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007, offered to or entered into with a covered member or dependent because such person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007. Nothing in this subsection permits any such creditor to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, to a covered member or dependent, based upon status protected by chapter 49.60 RCW other than the honorably discharged veteran or military status of the covered member or dependent.

      NEW SECTION. Sec. 5. A new section is added to chapter 31.45 RCW to read as follows:

      (1) A creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007 may consider whether any person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007, in connection with an application for or an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007.

      (2) Notwithstanding any other provision of law, it shall not be an unfair practice or a denial of civil rights for a creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007, to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007, offered to or entered into with a covered member or dependent because such person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007. Nothing in this subsection permits any such creditor to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, to a covered member or dependent, based upon status protected by chapter 49.60 RCW other than the honorably discharged veteran or military status of the covered member or dependent.

      NEW SECTION. Sec. 6. A new section is added to chapter 32.08 RCW to read as follows:

      (1) A creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007 may consider whether any person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007, in connection with an application for or an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007.

       (2) Notwithstanding any other provision of law, it shall not be an unfair practice or a denial of civil rights for a creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007, to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007, offered to or entered into with a covered member or dependent because such person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007. Nothing in this subsection permits any such creditor to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, to a covered member or dependent, based upon status protected by chapter 49.60 RCW other than the honorably discharged veteran or military status of the covered member or dependent.

      NEW SECTION. Sec. 7. A new section is added to chapter 33.12 RCW to read as follows:

      (1) A creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007 may consider whether any person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007, in connection with an application for or an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007.

      (2) Notwithstanding any other provision of law, it shall not be an unfair practice or a denial of civil rights for a creditor, as defined in 10 U.S.C. Sec. 987(i)(5) as it exists on April 1, 2007, to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, as defined in 10 U.S.C. Sec. 987(i)(6) as it exists on April 1, 2007, offered to or entered into with a covered member or dependent because such person is a covered member or dependent, as defined in 10 U.S.C. Sec. 987(i)(1) and (2) as each exists on April 1, 2007. Nothing in this subsection permits any such creditor to refuse to offer, to deny, to offer different terms and conditions, or to otherwise place restrictions upon an extension of consumer credit, to a covered member or dependent, based upon status protected by chapter 49.60 RCW other than the honorably discharged veteran or military status of the covered member or dependent."

      On page 1, line 1 of the title, after "Relating to the" strike the remainder of the title and insert "extension of credit; amending RCW 31.04.125; adding a new section to chapter 30.04 RCW; adding a new section to chapter 31.04 RCW; adding a new section to chapter 31.12 RCW; adding a new section to chapter 31.45 RCW; adding a new section to chapter 32.08 RCW; and adding a new section to chapter 33.12 RCW."

      Senator Berkey spoke in favor of adoption of the amendment.

POINT OF ORDER

Senator Kline: “Mr. President, I believe the proposed amendment exceeds the scope and object of the underlying bill, House Bill No. 1270.”

      Senator Kline spoke in favor of the point of order.

      Senator Berkey spoke against the point of order.

MOTION

On motion of Senator Eide, further consideration of House Bill No. 1270 was deferred and the bill held its place on the second reading calendar.

SECOND READING

      HOUSE BILL NO. 1371, by Representative Appleton

      Addressing traffic infractions involving rental vehicles.

      The measure was read the second time.

MOTION

      Senator Murray moved that the following committee striking amendment by the Committee on Transportation be adopted.

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 46.63.073 and 2005 c 331 s 2 are each amended to read as follows:

      (1) In the event a traffic infraction is based on a vehicle's identification, and the registered owner of the vehicle is a rental car business, the law enforcement agency shall, before a notice of infraction may be issued, provide a written notice to the rental car business that a notice of infraction may be issued to the rental car business if the rental car business does not, within thirty days of receiving the written notice, provide to the issuing agency by return mail:

      (a) A statement under oath stating the name and known mailing address of the individual driving or renting the vehicle when the infraction occurred; or

      (b) A statement under oath that the business is unable to determine who was driving or renting the vehicle at the time the infraction occurred because the vehicle was stolen at the time of the infraction. A statement provided under this subsection must be accompanied by a copy of a filed police report regarding the vehicle theft.

      Timely mailing of this statement to the issuing law enforcement agency relieves a rental car business of any liability under this chapter for the notice of infraction. In lieu of identifying the vehicle operator, the rental car business may pay the applicable penalty. (((2))) For the purpose of this ((section)) subsection, a "traffic infraction based on a vehicle's identification" includes, but is not limited to, parking infractions, high-occupancy toll lane violations, and violations recorded by automated traffic safety cameras.

      (2) In the event a parking infraction is issued by a private parking facility and is based on a vehicle's identification, and the registered owner of the vehicle is a rental car business, the parking facility shall, before a notice of infraction may be issued, provide a written notice to the rental car business that a notice of infraction may be issued to the rental car business if the rental car business does not, within thirty days of receiving the written notice, provide to the parking facility by return mail:

      (a) A statement under oath stating the name and known mailing address of the individual driving or renting the vehicle when the infraction occurred; or

      (b) A statement under oath that the business is unable to determine who was driving or renting the vehicle at the time the infraction occurred because the vehicle was stolen at the time of the infraction. A statement provided under this subsection must be accompanied by a copy of a filed police report regarding the vehicle theft.

      Timely mailing of this statement to the parking facility relieves a rental car business of any liability under this chapter for the notice of infraction. In lieu of identifying the vehicle operator, the rental car business may pay the applicable penalty. For the purpose of this subsection, a "parking infraction based on a vehicle's identification" is limited to parking infractions occurring on a private parking facility's premises.

      Sec. 2. RCW 46.63.160 and 2004 c 231 s 6 are each amended to read as follows:

      (1) This section applies only to traffic infractions issued under RCW 46.61.690 for toll collection evasion.

      (2) Nothing in this section prohibits a law enforcement officer from issuing a notice of traffic infraction to a person in control of a vehicle at the time a violation occurs under RCW 46.63.030(1) (a), (b), or (c).

      (3) Toll collection systems include manual cash collection, electronic toll collection, and photo enforcement systems.

      (4) "Electronic toll collection system" means a system of collecting tolls or charges that is capable of charging the account of the toll patron the appropriate toll or charge by electronic transmission from the motor vehicle to the toll collection system, which information is used to charge the appropriate toll or charge to the patron's account.

      (5) "Photo enforcement system" means a vehicle sensor installed to work in conjunction with an electronic toll collection system that automatically produces one or more photographs, one or more microphotographs, a videotape, or other recorded images of a vehicle operated in violation of an infraction under this chapter.

      (6) The use of a toll collection system is subject to the following requirements:

      (a) The department of transportation shall adopt rules that allow an open standard for automatic vehicle identification transponders used for electronic toll collection to be compatible with other electronic payment devices or transponders from the Washington state ferry system, other public transportation systems, or other toll collection systems to the extent that technology permits. The rules must also allow for multiple vendors providing electronic payment devices or transponders as technology permits.

      (b) The department of transportation may not sell, distribute, or make available in any way, the names and addresses of electronic toll collection system account holders.

      (7) The use of a photo enforcement system for issuance of notices of infraction is subject to the following requirements:

      (a) Photo enforcement systems may take photographs, digital photographs, microphotographs, videotapes, or other recorded images of the vehicle and vehicle license plate only.

      (b) A notice of infraction must be mailed to the registered owner of the vehicle or to the renter of a vehicle within sixty days of the violation. The law enforcement officer issuing the notice of infraction shall include with it a certificate or facsimile thereof, based upon inspection of photographs, microphotographs, videotape, or other recorded images produced by a photo enforcement system, stating the facts supporting the notice of infraction. This certificate or facsimile is prima facie evidence of the facts contained in it and is admissible in a proceeding charging a violation under this chapter. The photographs, digital photographs, microphotographs, videotape, or other recorded images evidencing the violation must be available for inspection and admission into evidence in a proceeding to adjudicate the liability for the infraction.

      (c) Notwithstanding any other provision of law, all photographs, digital photographs, microphotographs, videotape, or other recorded images prepared under this chapter are for the exclusive use of the tolling agency and law enforcement in the discharge of duties under this section and are not open to the public and may not be used in a court in a pending action or proceeding unless the action or proceeding relates to a violation under this chapter. No photograph, digital photograph, microphotograph, videotape, or other recorded image may be used for any purpose other than enforcement of violations under this chapter nor retained longer than necessary to enforce this chapter or verify that tolls are paid.

      (d) All locations where a photo enforcement system is used must be clearly marked by placing signs in locations that clearly indicate to a driver that he or she is entering a zone where traffic laws are enforced by a photo enforcement system.

      (8) Infractions detected through the use of photo enforcement systems are not part of the registered owner's driving record under RCW 46.52.101 and 46.52.120.

      (9) If the registered owner of the vehicle is a rental car business the department of transportation or a law enforcement agency shall, before a notice of infraction being issued under this section, provide a written notice to the rental car business that a notice of infraction may be issued to the rental car business if the rental car business does not, within eighteen days of the mailing of the written notice, provide to the issuing agency by return mail:

      (a) A statement under oath stating the name and known mailing address of the individual driving or renting the vehicle when the infraction occurred; or

      (b) A statement under oath that the business is unable to determine who was driving or renting the vehicle at the time the infraction occurred because the vehicle was stolen at the time of the infraction. A statement provided under this subsection must be accompanied by a copy of a filed police report regarding the vehicle theft; or

      (c) In lieu of identifying the vehicle operator, the rental car business may pay the applicable toll and fee.

      Timely mailing of this statement to the issuing law enforcement agency relieves a rental car business of any liability under this chapter for the notice of infraction.

      Sec. 3. RCW 46.63.170 and 2005 c 167 s 1 are each amended to read as follows:

      (1) The use of automated traffic safety cameras for issuance of notices of infraction is subject to the following requirements:

      (a) The appropriate local legislative authority must first enact an ordinance allowing for their use to detect one or more of the following: Stoplight, railroad crossing, or school speed zone violations. At a minimum, the local ordinance must contain the restrictions described in this section and provisions for public notice and signage. Cities and counties using automated traffic safety cameras before July 24, 2005, are subject to the restrictions described in this section, but are not required to enact an authorizing ordinance.

      (b) Use of automated traffic safety cameras is restricted to two-arterial intersections, railroad crossings, and school speed zones only.

      (c) Automated traffic safety cameras may only take pictures of the vehicle and vehicle license plate and only while an infraction is occurring. The picture must not reveal the face of the driver or of passengers in the vehicle.

      (d) A notice of infraction must be mailed to the registered owner of the vehicle within fourteen days of the violation, or to the renter of a vehicle within fourteen days of establishing the renter's name and address under subsection (3)(a) of this section. The law enforcement officer issuing the notice of infraction shall include with it a certificate or facsimile thereof, based upon inspection of photographs, microphotographs, or electronic images produced by an automated traffic safety camera, stating the facts supporting the notice of infraction. This certificate or facsimile is prima facie evidence of the facts contained in it and is admissible in a proceeding charging a violation under this chapter. The photographs, microphotographs, or electronic images evidencing the violation must be available for inspection and admission into evidence in a proceeding to adjudicate the liability for the infraction. A person receiving a notice of infraction based on evidence detected by an automated traffic safety camera may respond to the notice by mail.

      (e) The registered owner of a vehicle is responsible for an infraction under RCW 46.63.030(1)(e) unless the registered owner overcomes the presumption in RCW 46.63.075, or, in the case of a rental car business, satisfies the conditions under subsection (3) of this section. If appropriate under the circumstances, a renter identified under subsection (3)(a) of this section is responsible for an infraction.

      (f) Notwithstanding any other provision of law, all photographs, microphotographs, or electronic images prepared under this section are for the exclusive use of law enforcement in the discharge of duties under this section and are not open to the public and may not be used in a court in a pending action or proceeding unless the action or proceeding relates to a violation under this section. No photograph, microphotograph, or electronic image may be used for any purpose other than enforcement of violations under this section nor retained longer than necessary to enforce this section.

      (g) All locations where an automated traffic safety camera is used must be clearly marked by placing signs in locations that clearly indicate to a driver that he or she is entering a zone where traffic laws are enforced by an automated traffic safety camera.

      (h) If a county or city has established an authorized automated traffic safety camera program under this section, the compensation paid to the manufacturer or vendor of the equipment used must be based only upon the value of the equipment and services provided or rendered in support of the system, and may not be based upon a portion of the fine or civil penalty imposed or the revenue generated by the equipment.

      (2) Infractions detected through the use of automated traffic safety cameras are not part of the registered owner's driving record under RCW 46.52.101 and 46.52.120. Additionally, infractions generated by the use of automated traffic safety cameras under this section shall be processed in the same manner as parking infractions, including for the purposes of RCW 3.46.120, 3.50.100, 35.20.220, 46.16.216, and 46.20.270(3). However, the amount of the fine issued for an infraction generated through the use of an automated traffic safety camera shall not exceed the amount of a fine issued for other parking infractions within the jurisdiction.

      (3) If the registered owner of the vehicle is a rental car business, the law enforcement agency shall, before a notice of infraction being issued under this section, provide a written notice to the rental car business that a notice of infraction may be issued to the rental car business if the rental car business does not, within eighteen days of receiving the written notice, provide to the issuing agency by return mail:

      (a) A statement under oath stating the name and known mailing address of the individual driving or renting the vehicle when the infraction occurred; or

      (b) A statement under oath that the business is unable to determine who was driving or renting the vehicle at the time the infraction occurred because the vehicle was stolen at the time of the infraction. A statement provided under this subsection must be accompanied by a copy of a filed police report regarding the vehicle theft; or

      (c) In lieu of identifying the vehicle operator, the rental car business may pay the applicable penalty.

      Timely mailing of this statement to the issuing law enforcement agency relieves a rental car business of any liability under this chapter for the notice of infraction.

      (4) Nothing in this section prohibits a law enforcement officer from issuing a notice of traffic infraction to a person in control of a vehicle at the time a violation occurs under RCW 46.63.030(1) (a), (b), or (c).

      (5) For the purposes of this section, "automated traffic safety camera" means a device that uses a vehicle sensor installed to work in conjunction with an intersection traffic control system, a railroad grade crossing control system, or a speed measuring device, and a camera synchronized to automatically record one or more sequenced photographs, microphotographs, or electronic images of the rear of a motor vehicle at the time the vehicle fails to stop when facing a steady red traffic control signal or an activated railroad grade crossing control signal, or exceeds a speed limit in a school speed zone as detected by a speed measuring device."

      The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Transportation to House Bill No. 1371.

      The motion by Senator Murray carried and the committee striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 1 of the title, after "vehicles;" strike the remainder of the title and insert "and amending RCW 46.63.073, 46.63.160, and 46.63.170."

MOTION

      On motion of Senator Murray, the rules were suspended, House Bill No. 1371 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Murray spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of House Bill No. 1371 as amended by the Senate

ROLL CALL

      The Secretary called the roll on the final passage of House Bill No. 1371 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 48; Nays, 1; Absent, 0; Excused, 0.

      Voting yea: Senators Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 48

      Voting nay: Senator Benton - 1

      HOUSE BILL NO. 1371 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1255, by House Committee on Local Government (originally sponsored by Representatives Simpson, Curtis, Sells, Walsh, Buri, B. Sullivan, Ericks, Ormsby and Moeller)

      Prohibiting municipal officers from being beneficially interested in any personal services contract that is made by, through, or under the supervision of that officer.

      The measure was read the second time.

MOTION

      Senator Fairley moved that the following committee striking amendment by the Committee on Government Operations & Elections be adopted.

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 42.23.030 and 2006 c 121 s 1 are each amended to read as follows:

      No municipal officer shall be beneficially interested, directly or indirectly, in any contract which may be made by, through or under the supervision of such officer, in whole or in part, or which may be made for the benefit of his or her office, or accept, directly or indirectly, any compensation, gratuity or reward in connection with such contract from any other person beneficially interested therein. This section shall not apply in the following cases:

      (1) The furnishing of electrical, water or other utility services by a municipality engaged in the business of furnishing such services, at the same rates and on the same terms as are available to the public generally;

      (2) The designation of public depositaries for municipal funds;

      (3) The publication of legal notices required by law to be published by any municipality, upon competitive bidding or at rates not higher than prescribed by law for members of the general public;

      (4) The designation of a school director as clerk or as both clerk and purchasing agent of a school district;

      (5) The employment of any person by a municipality for unskilled day labor at wages not exceeding two hundred dollars in any calendar month. The exception provided in this subsection does not apply to a county with a population of one hundred twenty-five thousand or more, a city with a population of more than one thousand five hundred, an irrigation district encompassing more than fifty thousand acres, or a first class school district;

      (6)(a) The letting of any other contract in which the total amount received under the contract or contracts by the municipal officer or the municipal officer's business does not exceed one thousand five hundred dollars in any calendar month.

      (b) However, in the case of a particular officer of a second class city or town, or a noncharter optional code city, or a member of any county fair board in a county which has not established a county purchasing department pursuant to RCW 36.32.240, the total amount of such contract or contracts authorized in this subsection (6) may exceed one thousand five hundred dollars in any calendar month but shall not exceed eighteen thousand dollars in any calendar year.

      (c)(i) In the case of a particular officer of a rural public hospital district, as defined in RCW 70.44.460, the total amount of such contract or contracts authorized in this subsection (6) may exceed one thousand five hundred dollars in any calendar month, but shall not exceed twenty-four thousand dollars in any calendar year.

      (ii) At the beginning of each calendar year, beginning with the 2006 calendar year, the legislative authority of the rural public hospital district shall increase the calendar year limitation described in this subsection (6)(c) by an amount equal to the dollar amount for the previous calendar year multiplied by the change in the consumer price index as of the close of the twelve-month period ending December 31st of that previous calendar year. If the new dollar amount established under this subsection is not a multiple of ten dollars, the increase shall be rounded to the next lowest multiple of ten dollars. As used in this subsection, "consumer price index" means the consumer price index compiled by the bureau of labor statistics, United States department of labor for the state of Washington. If the bureau of labor statistics develops more than one consumer price index for areas within the state, the index covering the greatest number of people, covering areas exclusively within the boundaries of the state, and including all items shall be used.

      (d) The exceptions provided in this subsection (6) do not apply to:

      (i) A sale or lease by the municipality as the seller or lessor((. The exceptions provided in this subsection (6) also do not apply to));

      (ii) The letting of any contract by a county with a population of one hundred twenty-five thousand or more, a city with a population of ten thousand or more, or an irrigation district encompassing more than fifty thousand acres; or

       (iii) Contracts for legal services, except for reimbursement of expenditures.

      (e) The municipality shall maintain a list of all contracts that are awarded under this subsection (6). The list must be made available for public inspection and copying;

      (7) The leasing by a port district as lessor of port district property to a municipal officer or to a contracting party in which a municipal officer may be beneficially interested, if in addition to all other legal requirements, a board of three disinterested appraisers and the superior court in the county where the property is situated finds that all terms and conditions of such lease are fair to the port district and are in the public interest. The appraisers must be appointed from members of the American Institute of Real Estate Appraisers by the presiding judge of the superior court;

      (8) The letting of any employment contract for the driving of a school bus in a second class school district if the terms of such contract are commensurate with the pay plan or collective bargaining agreement operating in the district;

      (9) The letting of an employment contract as a substitute teacher or substitute educational aide to an officer of a second class school district that has two hundred or fewer full-time equivalent students, if the terms of the contract are commensurate with the pay plan or collective bargaining agreement operating in the district and the board of directors has found, consistent with the written policy under RCW 28A.330.240, that there is a shortage of substitute teachers in the school district;

      (10) The letting of any employment contract to the spouse of an officer of a school district, when such contract is solely for employment as a substitute teacher for the school district. This exception applies only if the terms of the contract are commensurate with the pay plan or collective bargaining agreement applicable to all district employees and the board of directors has found, consistent with the written policy under RCW 28A.330.240, that there is a shortage of substitute teachers in the school district;

      (11) The letting of any employment contract to the spouse of an officer of a school district if the spouse was under contract as a certificated or classified employee with the school district before the date in which the officer assumes office and the terms of the contract are commensurate with the pay plan or collective bargaining agreement operating in the district. However, in a second class school district that has less than two hundred full-time equivalent students enrolled at the start of the school year as defined in RCW 28A.150.040, the spouse is not required to be under contract as a certificated or classified employee before the date on which the officer assumes office;

      (12) The authorization, approval, or ratification of any employment contract with the spouse of a public hospital district commissioner if: (a) The spouse was employed by the public hospital district before the date the commissioner was initially elected; (b) the terms of the contract are commensurate with the pay plan or collective bargaining agreement operating in the district for similar employees; (c) the interest of the commissioner is disclosed to the board of commissioners and noted in the official minutes or similar records of the public hospital district prior to the letting or continuation of the contract; and (d) and the commissioner does not vote on the authorization, approval, or ratification of the contract or any conditions in the contract.

      A municipal officer may not vote in the authorization, approval, or ratification of a contract in which he or she is beneficially interested even though one of the exemptions allowing the awarding of such a contract applies. The interest of the municipal officer must be disclosed to the governing body of the municipality and noted in the official minutes or similar records of the municipality before the formation of the contract."

      The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Government Operations & Elections to Substitute House Bill No. 1255.

      The motion by Senator Fairley carried and the committee striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 2 of the title, after "contracts;" strike the remainder of the title and insert "and amending RCW 42.23.030."

MOTION

      On motion of Senator Fairley, the rules were suspended, Substitute House Bill No. 1255 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Fairley spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1255 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1255 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 1; Excused, 0.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 48

      Absent: Senator Hargrove - 1

      SUBSTITUTE HOUSE BILL NO. 1255 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      HOUSE BILL NO. 1038, by Representatives Morris, Hudgins, Anderson, Moeller and B. Sullivan

      Developing regional compacts for siting electric transmission lines.

      The measure was read the second time.

MOTION

      Senator Poulsen moved that the following committee striking amendment by the Committee on Water, Energy & Telecommunications be adopted.

      Strike everything after the enacting clause and insert the following:

      "NEW SECTION. Sec. 1. It is the intent of the legislature to create a regional process for the siting of new electric transmission lines related to the national energy policy act of 2005. This regional process will facilitate the siting of new cross borders electric transmission lines by providing a "one stop" licensing process. This act calls for the creation of a legislative task force to establish an interstate compact to assert jurisdiction over national interest electric transmission corridors.

      NEW SECTION. Sec. 2. A new section is added to chapter 80.50 RCW to read as follows:

      (1)(a) A legislative task force on national interest electric transmission corridors is established, with members as provided in this subsection.

      (i) The chair and the ranking minority member from the senate water, energy and telecommunications committee or their designees;

      (ii) The chair and the ranking minority member from the house of representatives technology, energy and communications committee or their designees;

      (iii) The governor shall appoint five members representing the energy facility site evaluation council, local governments, resource agencies, or other persons with appropriate expertise.

      (b) The task force shall choose its cochairs representing the senate and house of representatives from among its legislative membership.

      (2)(a) The task force shall negotiate the terms of an interstate compact that establishes a regional process for siting national interest electric transmission corridors satisfactory to the national energy policy act of 2005.

      (b) In negotiating the terms of the compact, the task force shall ensure that the compact reflects as close as possible the Washington state energy facility site evaluation council model under this chapter and its procedures to ensure appropriate adjudicative proceedings and mitigation of environmental impacts.

      (c) The task force shall negotiate the terms of the compact through processes established and supported by the Pacific Northwest economic region for which the state of Washington is a party as referenced in RCW 43.147.010.

      (3) Staff support for the task force members shall be provided from respective committees and appropriate agencies appointed by the governor.

      (4) Legislative members of the task force shall be reimbursed for travel expenses in accordance with RCW 44.04.120. Nonlegislative members, except those representing an employer or organization, are entitled to be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

      (5) The task force shall report its preliminary recommendations on the compact to the appropriate committees of the legislature by January 1, 2008.

      (6) The task force shall report its final recommendations on the compact to the appropriate committees of the legislature by September 1, 2008.

      (7) This section expires July 1, 2009."

      The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Water, Energy & Telecommunications to House Bill No. 1038.

      The motion by Senator Poulsen carried and the committee striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 2 of the title, after "lines;" strike the remainder of the title and insert "adding a new section to chapter 80.50 RCW; creating a new section; and providing an expiration date."

MOTION

      On motion of Senator Poulsen, the rules were suspended, House Bill No. 1038 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Poulsen and Honeyford spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of House Bill No. 1038 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of House Bill No. 1038 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 48; Nays, 1; Absent, 0; Excused, 0.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 48

      Voting nay: Senator Pridemore - 1

      HOUSE BILL NO. 1038 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1264, by House Committee on Appropriations (originally sponsored by Representatives Fromhold, Conway, B. Sullivan, Kenney, Ericks, Haigh, Ormsby, Simpson and Moeller)

      Addressing the portability of public retirement benefits.

      The measure was read the second time.

MOTION

      On motion of Senator Prentice, the rules were suspended, Substitute House Bill No. 1264 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Prentice spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1264.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1264 and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 49

      SUBSTITUTE HOUSE BILL NO. 1264, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      HOUSE BILL NO. 1644, by Representatives Kenney, Sells, Anderson, Appleton, Morrell, Linville, Roberts, Ormsby, McDermott, Conway, Schual-Berke and Haigh

      Modifying health care eligibility provisions for part-time academic employees of community and technical colleges.

      The measure was read the second time.

MOTION

      Senator Shin moved that the following committee striking amendment by the Committee on Higher Education be adopted.

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. 2006 c 308 s 1 (uncodified) is amended to read as follows:

      Part-time academic employees at community and technical colleges are currently eligible for full health care benefits beginning the second consecutive quarter of employment, at half-time or more of an academic workload, as defined in RCW 28B.50.489. They are also eligible for health benefits through the summer even if they receive no work at all that quarter, if they have worked half-time or more of an academic workload in each of the three ((of the four)) preceding quarters. However, workload fluctuations below these thresholds may result in the loss of employer contributions for health care benefits. It is the intent of the legislature to provide for continuous health care eligibility for part-time academic employees based on averaging workload gained during the two preceding academic years.

      Sec. 2. RCW 41.05.053 and 2006 c 308 s 2 are each amended to read as follows:

      (1) Part-time academic employees, as defined in RCW 28B.50.489, who have established eligibility as determined from the payroll records of the employing community or technical college districts, for employer contributions for benefits under this chapter and who have worked an average of half-time or more in each of the two preceding academic years, through employment at one or more community or technical college districts, are eligible for continuation of employer contributions for the subsequent summer quarter period including the break between summer and fall quarters.

      (2) Once a part-time academic employee meets the criteria in subsection (1) of this section, the employee shall continue to receive uninterrupted employer contributions for benefits if the employee works at least ((three of the four)) two quarters of the academic year with an average academic workload of half-time or more for three quarters of the academic year. Benefits provided under this section cease ((at the end of the academic year)) if this criteria is not met. Continuous benefits shall be reinstated once the employee reestablishes eligibility under subsection (1) of this section ((and will be maintained as long as the employee works at least three of the four quarters of the academic year with an average academic workload of half-time or more)).

      (3) As used in this section, "academic year" means summer, fall, winter, and spring quarters.

      (4) This section does not modify rules in existence on June 7, 2006, adopted under this chapter regarding the initial establishment of eligibility for benefits.

      (5) This section does not preclude individuals from being eligible for benefits under other laws or rules that may apply or for which they may be eligible.

      (6) The employer must notify part-time academic employees of their potential right to benefits under this section.

      (7) To be eligible for maintenance of benefits through averaging, part-time academic employees must notify their employers of their potential eligibility. The state board for community and technical colleges shall report back to the legislature by November 15, 2009, on the feasibility of eliminating the self-reporting requirement for employees."

      The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Higher Education to House Bill No. 1644.

The motion by Senator Shin carried and the committee striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 2 of the title, after "colleges;" strike the remainder of the title and insert "amending RCW 41.05.053; and amending 2006 c 308 s 1 (uncodified)."

MOTION

      On motion of Senator Shin, the rules were suspended, House Bill No. 1644 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Shin spoke in favor of passage of the bill.

MOTION

On motion of Senator Regala, Senator McAuliffe was excused.

MOTION

On motion of Senator Brandland, Senator Holmquist was excused.

      The President declared the question before the Senate to be the final passage of House Bill No. 1644 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of House Bill No. 1644 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 0; Excused, 2.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 47

      Excused: Senators Holmquist and McAuliffe - 2

      HOUSE BILL NO. 1644 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1312, by House Committee on Transportation (originally sponsored by Representatives Hudgins and Hankins)

      Modifying provisions concerning transportation providers.

      The measure was read the second time.

MOTION

      On motion of Senator Murray, the rules were suspended, Substitute House Bill No. 1312 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Murray spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1312.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1312 and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 0; Excused, 2.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 47

      Excused: Senators Holmquist and McAuliffe - 2

      SUBSTITUTE HOUSE BILL NO. 1312, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1141, by House Committee on Human Services (originally sponsored by Representatives Roberts, Haler, O'Brien, Green, Goodman, Kagi, Appleton, Walsh, Williams, Dickerson, Darneille, Flannigan, McCoy, Hinkle, Pettigrew and Hasegawa)

      Modifying diversion records provisions.

      The measure was read the second time.

MOTION

      Senator Regala moved that the following committee striking amendment by the Committee on Human Services & Corrections be adopted.

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 13.50.050 and 2004 c 42 s 1 are each amended to read as follows:

      (1) This section governs records relating to the commission of juvenile offenses, including records relating to diversions.

      (2) The official juvenile court file of any alleged or proven juvenile offender shall be open to public inspection, unless sealed pursuant to subsection (12) of this section.

      (3) All records other than the official juvenile court file are confidential and may be released only as provided in this section, RCW 13.50.010, 13.40.215, and 4.24.550.

      (4) Except as otherwise provided in this section and RCW 13.50.010, records retained or produced by any juvenile justice or care agency may be released to other participants in the juvenile justice or care system only when an investigation or case involving the juvenile in question is being pursued by the other participant or when that other participant is assigned the responsibility for supervising the juvenile.

      (5) Except as provided in RCW 4.24.550, information not in an official juvenile court file concerning a juvenile or a juvenile's family may be released to the public only when that information could not reasonably be expected to identify the juvenile or the juvenile's family.

      (6) Notwithstanding any other provision of this chapter, the release, to the juvenile or his or her attorney, of law enforcement and prosecuting attorneys' records pertaining to investigation, diversion, and prosecution of juvenile offenses shall be governed by the rules of discovery and other rules of law applicable in adult criminal investigations and prosecutions.

       (7) Upon the decision to arrest or the arrest, law enforcement and prosecuting attorneys may cooperate with schools in releasing information to a school pertaining to the investigation, diversion, and prosecution of a juvenile attending the school. Upon the decision to arrest or the arrest, incident reports may be released unless releasing the records would jeopardize the investigation or prosecution or endanger witnesses. If release of incident reports would jeopardize the investigation or prosecution or endanger witnesses, law enforcement and prosecuting attorneys may release information to the maximum extent possible to assist schools in protecting other students, staff, and school property.

      (8) The juvenile court and the prosecutor may set up and maintain a central record-keeping system which may receive information on all alleged juvenile offenders against whom a complaint has been filed pursuant to RCW 13.40.070 whether or not their cases are currently pending before the court. The central record-keeping system may be computerized. If a complaint has been referred to a diversion unit, the diversion unit shall promptly report to the juvenile court or the prosecuting attorney when the juvenile has agreed to diversion. An offense shall not be reported as criminal history in any central record-keeping system without notification by the diversion unit of the date on which the offender agreed to diversion.

      (9) Upon request of the victim of a crime or the victim's immediate family, the identity of an alleged or proven juvenile offender alleged or found to have committed a crime against the victim and the identity of the alleged or proven juvenile offender's parent, guardian, or custodian and the circumstance of the alleged or proven crime shall be released to the victim of the crime or the victim's immediate family.

      (10) Subject to the rules of discovery applicable in adult criminal prosecutions, the juvenile offense records of an adult criminal defendant or witness in an adult criminal proceeding shall be released upon request to prosecution and defense counsel after a charge has actually been filed. The juvenile offense records of any adult convicted of a crime and placed under the supervision of the adult corrections system shall be released upon request to the adult corrections system.

      (11) In any case in which an information has been filed pursuant to RCW 13.40.100 or a complaint has been filed with the prosecutor and referred for diversion pursuant to RCW 13.40.070, the person the subject of the information or complaint may file a motion with the court to have the court vacate its order and findings, if any, and, subject to subsection (23) of this section, order the sealing of the official juvenile court file, the social file, and records of the court and of any other agency in the case.

      (12) The court shall not grant any motion to seal records made pursuant to subsection (11) of this section that is filed on or after July 1, 1997, unless it finds that:

      (a) For class B offenses other than sex offenses, since the last date of release from confinement, including full-time residential treatment, if any, or entry of disposition, the person has spent five consecutive years in the community without committing any offense or crime that subsequently results in conviction. For class C offenses other than sex offenses, since the last date of release from confinement, including full-time residential treatment, if any, or entry of disposition, the person has spent two consecutive years in the community without committing any offense or crime that subsequently results in conviction. For gross misdemeanors and misdemeanors, since the last date of release from confinement, including full-time residential treatment, if any, or entry of disposition, the person has spent two consecutive years in the community without committing any offense or crime that subsequently results in conviction. For diversions, since completion of the diversion agreement, the person has spent two consecutive years in the community without committing any offense or crime that subsequently results in conviction or diversion;

      (b) No proceeding is pending against the moving party seeking the conviction of a juvenile offense or a criminal offense;

      (c) No proceeding is pending seeking the formation of a diversion agreement with that person;

      (d) The person has not been convicted of a class A or sex offense; and

      (e) Full restitution has been paid.

      (13) The person making a motion pursuant to subsection (11) of this section shall give reasonable notice of the motion to the prosecution and to any person or agency whose files are sought to be sealed.

      (14) If the court grants the motion to seal made pursuant to subsection (11) of this section, it shall, subject to subsection (23) of this section, order sealed the official juvenile court file, the social file, and other records relating to the case as are named in the order. Thereafter, the proceedings in the case shall be treated as if they never occurred, and the subject of the records may reply accordingly to any inquiry about the events, records of which are sealed. Any agency shall reply to any inquiry concerning confidential or sealed records that records are confidential, and no information can be given about the existence or nonexistence of records concerning an individual.

      (15) Inspection of the files and records included in the order to seal may thereafter be permitted only by order of the court upon motion made by the person who is the subject of the information or complaint, except as otherwise provided in RCW 13.50.010(8) and subsection (23) of this section.

      (16) Any adjudication of a juvenile offense or a crime subsequent to sealing has the effect of nullifying the sealing order. Any charging of an adult felony subsequent to the sealing has the effect of nullifying the sealing order for the purposes of chapter 9.94A RCW. The administrative office of the courts shall ensure that the superior court judicial information system provides prosecutors access to information on the existence of sealed juvenile records.

      (17)(a) ((A person eighteen years of age or older whose criminal history consists of only one referral for diversion may request that the court order the records in that case destroyed. The request shall be granted, subject to subsection (23) of this section, if the court finds that two years have elapsed since completion of the diversion agreement.)) (i) Subject to subsection (23) of this section, all records maintained by any court or law enforcement agency, including the juvenile court, local law enforcement, the Washington state patrol, and the prosecutor's office, shall be automatically destroyed within ninety days of becoming eligible for destruction. Juvenile records are eligible for destruction when:

      (A) The person who is the subject of the information or complaint is at least eighteen years of age;

      (B) His or her criminal history consists entirely of one diversion agreement or counsel and release entered on or after the effective date of this act;

       (C) Two years have elapsed since completion of the agreement or counsel and release;

      (D) No proceeding is pending against the person seeking the conviction of a criminal offense; and

      (E) There is no restitution owing in the case.

      (ii) No less than quarterly, the administrative office of the courts shall provide a report to the juvenile courts of those individuals whose records may be eligible for destruction. The juvenile court shall verify eligibility and notify the Washington state patrol and the appropriate local law enforcement agency and prosecutor's office of the records to be destroyed. The requirement to destroy records under this subsection is not dependent on a court hearing or the issuance of a court order to destroy records.

      (iii) The state and local governments and their officers and employees are not liable for civil damages for the failure to destroy records pursuant to this section.

      (b) A person eighteen years of age or older whose criminal history consists entirely of one diversion agreement or counsel and release entered prior to the effective date of this act, may request that the court order the records in his or her case destroyed. The request shall be granted, subject to subsection (23) of this section, if the court finds that two years have elapsed since completion of the agreement or counsel and release.

      (c) A person twenty-three years of age or older whose criminal history consists of only referrals for diversion may request that the court order the records in those cases destroyed. The request shall be granted, subject to subsection (23) of this section, if the court finds that all diversion agreements have been successfully completed and no proceeding is pending against the person seeking the conviction of a criminal offense.

      (18) If the court grants the motion to destroy records made pursuant to subsection (17)(b) or (c) of this section, it shall, subject to subsection (23) of this section, order the official juvenile court file, the social file, and any other records named in the order to be destroyed.

      (19) The person making the motion pursuant to subsection (17)(b) or (c) of this section shall give reasonable notice of the motion to the prosecuting attorney and to any agency whose records are sought to be destroyed.

      (20) Any juvenile to whom the provisions of this section may apply shall be given written notice of his or her rights under this section at the time of his or her disposition hearing or during the diversion process.

      (21) Nothing in this section may be construed to prevent a crime victim or a member of the victim's family from divulging the identity of the alleged or proven juvenile offender or his or her family when necessary in a civil proceeding.

      (22) Any juvenile justice or care agency may, subject to the limitations in subsection (23) of this section and (a) and (b) of this subsection, develop procedures for the routine destruction of records relating to juvenile offenses and diversions.

      (a) Records may be routinely destroyed only when the person the subject of the information or complaint has attained twenty-three years of age or older((, or is eighteen years of age or older and his or her criminal history consists entirely of one diversion agreement and two years have passed since completion of the agreement)) or pursuant to subsection (17)(a) of this section.

      (b) The court may not routinely destroy the official juvenile court file or recordings or transcripts of any proceedings.

      (23) No identifying information held by the Washington state patrol in accordance with chapter 43.43 RCW is subject to destruction or sealing under this section. For the purposes of this subsection, identifying information includes photographs, fingerprints, palmprints, soleprints, toeprints and any other data that identifies a person by physical characteristics, name, birthdate or address, but does not include information regarding criminal activity, arrest, charging, diversion, conviction or other information about a person's treatment by the criminal justice system or about the person's behavior.

      (24) Information identifying child victims under age eighteen who are victims of sexual assaults by juvenile offenders is confidential and not subject to release to the press or public without the permission of the child victim or the child's legal guardian. Identifying information includes the child victim's name, addresses, location, photographs, and in cases in which the child victim is a relative of the alleged perpetrator, identification of the relationship between the child and the alleged perpetrator. Information identifying a child victim of sexual assault may be released to law enforcement, prosecutors, judges, defense attorneys, or private or governmental agencies that provide services to the child victim of sexual assault."

MOTION

Senator Prentice moved that the following amendment by Senator Prentice to the committee striking amendment be adopted.

      On page 7, after line 4 of the committee amendment, insert

"NEW SECTION: Sec. 2. If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2007, in the omnibus appropriations act, this act is null and void.

      Senator Prentice spoke in favor of adoption of the amendment to the committee striking amendment.

The President declared the question before the Senate to be the adoption of the amendment by Senator Prentice on page 7, after line 4 to the committee striking amendment to Substitute House Bill No. 1141.

The motion by Senator Prentice carried and the amendment to the committee striking amendment was adopted by voice vote.

      The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Human Services & Corrections as amended to Substitute House Bill No. 1141.

      The motion by Senator Regala carried and the committee striking amendment as amended was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 1 of the title, after "records;" strike the remainder of the title and insert "and amending RCW 13.50.050."

MOTION

      On motion of Senator Regala, the rules were suspended, Substitute House Bill No. 1141 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Regala spoke in favor of passage of the bill.

      Senator Delvin spoke on final passage of the bill.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1141 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1141 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 0; Excused, 2.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 47

      Excused: Senators Holmquist and McAuliffe - 2

      SUBSTITUTE HOUSE BILL NO. 1141 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

RULING BY THE PRESIDENT

      President Owen: “In ruling upon the point of inquiry raised by Senator Honeyford that Engrossed Second Substitute House Bill 1359 takes a two-thirds vote on final passage under statutes enacted by Initiative 601 because it increases revenue, the President finds and rules as follows:

      The President finds that determining whether a revenue measure takes a simple majority or a 2/3 vote is one of the most difficult rulings to make. In part, this is because the initiative was poorly written, and it does not clearly set forth definitions as to various categories of revenue. Therefore, the President must look to several sources of authority when making rulings, starting with the plain language of the law itself, court rulings if pertinent, and previous parliamentary rulings of this body.

      The President believes that, although the law does allow for revenue increases, it is meant to limit these increases, and he has therefore endeavored to rule very narrowly in determining when a new revenue source is a fee, needing only a simple majority vote, rather than a tax needing a 2/3 vote to pass. In previous rulings, the President has maintained that there needs to be a relationship, or nexus, between the source of the revenue and the purposes for which its proceeds may be used. The President acknowledges that this determination can be somewhat subjective and difficult to determine absolutely. The situation is complicated further by the need of the body to tie together complicated matters of policy with the complexities of budgeting, all while trying to work within the constraints of this initiative and the constantly evolving body of case law and parliamentary authority. With this in mind, the President suggests that there is a need for the Legislature to put into law certain definitions as to taxes and fees for the purpose of raising revenue.

      In the case before us, the President takes note of a similar ruling in 2001 where an increase in recording fees for real estate documents was used to fund a specific program on low-income housing. The President must note again, at this point, that just calling something a specific program but using the revenue for a very broad purpose would be improperly gaming the law, and the President, as he has in the past, would rule such an action as being, in fact, a tax which would need a 2/3 vote for passage.

      The bill before us raises revenue through an increase in the recording fees on real estate documents to fund a program to provide housing for the homeless. This is a classic example of walking the fine line between a fee and a tax, and a specific versus a broad purpose. The President is concerned that the entirety of the bill’s language could allow the revenue raised to be used for multiple purposes, such as providing many very worthy yet additional services that may not be directly related to housing. Because this is all new law, it is unclear precisely how, in practice, all of the proceeds will ultimately be used. Nonetheless, the President believes that he must rely on past precedent and defer to stated intent rather than speculation. The President therefore finds, in keeping with a past ruling on this same subject, that the revenue source is sufficiently limited so as to be considered a fee for a dedicated purpose.

      For these reasons, the measure will take only a simple majority for final passage, 25 votes."

      The Senate resumed consideration of Engrossed Second Substitute House Bill No. 1359 which had been deferred on the previous day.

      Senators Weinstein, Tom spoke in favor of passage of the bill.

      Senators Honeyford, Zarelli spoke against passage of the bill.

      The President declared the question before the Senate to be the final passage of Engrossed Second Substitute House Bill No. 1359 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed Second Substitute House Bill No. 1359 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 32; Nays, 16; Absent, 1; Excused, 0.

      Voting yea: Senators Benton, Berkey, Brown, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Hobbs, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, Murray, Oemig, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Rockefeller, Shin, Spanel, Tom and Weinstein - 32

      Voting nay: Senators Brandland, Carrell, Clements, Delvin, Hewitt, Holmquist, Honeyford, McCaslin, Morton, Parlette, Roach, Schoesler, Sheldon, Stevens, Swecker and Zarelli - 16

      Absent: Senator Haugen - 1

      ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1359 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SECOND SUBSTITUTE HOUSE BILL NO. 1488, by House Committee on Finance (originally sponsored by Representatives B. Sullivan, Upthegrove, Appleton, Dunshee, Hunt, Dickerson, VanDeWege, Campbell, Kessler, Eickmeyer, McCoy, Chase, Green, Sells, Kenney, Ericks, Roberts, Lantz, Goodman, Wood, Kagi, Moeller and Rolfes)

      Enhancing the state's oil spill response program.

      The measure was read the second time.

MOTION

      Senator Spanel moved that the following striking amendment by Senators Spanel, Poulsen and Swecker be adopted:

      Strike everything after the enacting clause and insert the following:

      "NEW SECTION. Sec. 1. (1) The legislature finds that the state's oil spill prevention and response programs perform essential services in protecting the environment and natural resource economy of Washington. Due to increased demand for services, the legislature finds that these programs have been expanded several times in the twenty years since the funding mechanisms for these programs were authorized, but the funding mechanisms for these programs have remained unchanged. Without additional funding, these programs face a structural funding deficit beginning in the 2007-2009 biennium. The legislature further finds that the current source of funding for these programs is derived from only one segment of activities that present oil spill risks in the state, and that there is a need for a comprehensive assessment of the sources of oil spill risks and potential funding mechanisms by which all sectors that are a source of oil spill risks may contribute to ensuring adequate funding for programs that prevent as well as prepare for and respond to oil spills.

      (2) The legislature finds that the Strait of Juan de Fuca is a significant international avenue of waterborne commerce. Over five thousand transits by vessels greater than three hundred gross tons occur in the Strait each year. Reliable, safe vessel transits are vitally important to Washington state, the United States, and Canada. The legislature finds that comprehensive measures to prevent oil spills must be implemented in the Strait. The legislature further finds that stationing a response tug at the west entrance to the Strait is a critical component of such comprehensive measures, evidenced by the fact that the seasonal tug stationed at Neah Bay has conducted more than thirty assists since 1999. Because of the national significance of this waterway and the national interest in preventing oil spills there, the federal government should undertake to ensure that a year-round response tug is stationed at the west entrance to the Strait, either by providing sufficient federal funding for this purpose or to require through federal regulation that the commercial shipping interests benefiting from this service provide for a stationed tug. The legislature therefore directs the department of ecology to request that federal agencies with jurisdiction seek to require or fund the stationing of a response tug at such location, and seek reimbursement for the funding provided by the state for this purpose commencing with the fiscal year 2008 costs to the state.

      NEW SECTION. Sec. 2. By September 1, 2008, the joint legislative audit and review committee shall examine the funding mechanism for the oil spill prevention and response programs. This study shall evaluate the state's oil spill prevention, preparedness, and response programs to compare the sources of oil spill risk with the funding mechanism. The study shall include:

      (1) A review of existing oil spill risk evaluations and qualitative models, including:

      (a) Evaluations or models for a risk evaluation framework, considering such factors as volume of oil, time at sea, proximity to water, organizational readiness, and damage done; and

      (b) Evaluations or models for risk allocation, assessing how much of the risk goes with the product and how much with where and how the product is handled and who is handling it;

      (2) A review of empirical data related to actual spill numbers, spill volumes, spill locations, and other circumstances related to individual spills;

      (3) Comparisons of the risk allocation to the actual funding contributed by sector; and

      (4) Options to allocate the state's costs to the major risk categories, by sector."

      Senator Spanel spoke in favor of adoption of the striking amendment.

      The President declared the question before the Senate to be the adoption of the striking amendment by Senators Spanel, Poulsen and Swecker to Second Substitute House Bill No. 1488.

      The motion by Senator Spanel carried and the striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 2 of the title, after "program;" strike the remainder of the title and insert "and creating new sections."

MOTION

      On motion of Senator Spanel, the rules were suspended, Second Substitute House Bill No. 1488 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Spanel and Honeyford spoke in favor of passage of the bill.

MOTION

On motion of Senator Regala, Senators Haugen and Prentice were excused.

      The President declared the question before the Senate to be the final passage of Second Substitute House Bill No. 1488 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Second Substitute House Bill No. 1488 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 49

      SECOND SUBSTITUTE HOUSE BILL NO. 1488 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1555, by House Committee on Judiciary (originally sponsored by Representatives Williams, Rodne, Lantz, Chase and Ericks)

      Addressing sexual assault protection orders.

      The measure was read the second time.

MOTION

      On motion of Senator Kline, the rules were suspended, Substitute House Bill No. 1555 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Kline spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1555.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1555 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 1; Excused, 0.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 48

      Absent: Senator Pridemore - 1

      SUBSTITUTE HOUSE BILL NO. 1555, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      HOUSE BILL NO. 1680, by Representatives Hunter, Haler, P. Sullivan, Priest, Hurst, Conway, Schual-Berke, Haigh and Simpson

      Addressing transfers of service credit for emergency medical technicians under the law enforcement officers' and firefighters' retirement system plan 2.

      The measure was read the second time.

MOTION

      On motion of Senator Prentice, the rules were suspended, House Bill No. 1680 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Prentice spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of House Bill No. 1680.

ROLL CALL

      The Secretary called the roll on the final passage of House Bill No. 1680 and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 49

      HOUSE BILL NO. 1680, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1679, by House Committee on Appropriations (originally sponsored by Representatives Ericks, Hinkle, Conway, Buri, McDonald, Hurst, Haigh and Simpson)

      Determining membership on the law enforcement officers' and firefighters' retirement system plan 2 board.

      The measure was read the second time.

MOTION

      Senator Prentice moved that the following committee striking amendment by the Committee on Ways & Means be adopted.

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 41.26.715 and 2003 c 2 s 4 are each amended to read as follows:

      (1) An eleven member board of trustees is hereby created.

      (a) Before January 1, 2007, three of the board members shall be active law enforcement officers who are participants in the plan. Beginning with the first vacancy on or after January 1, 2007, two board members shall be active law enforcement officers who are participants in the plan and one board member shall be either an active or a retired law enforcement officer who is a ((member)) participant of the plan. The law enforcement officer board members shall be appointed by the governor from a list provided by a recognized statewide council whose membership consists exclusively of guilds, associations, and unions representing state and local government police officers, deputies, and sheriffs and excludes federal law enforcement officers.

      (b) Before January 1, 2007, three of the board members shall be active firefighters who are participants in the plan. Beginning with the first vacancy on or after January 1, 2007, two board members shall be active firefighters who are participants in the plan and one board member shall be either an active or a retired firefighter who is a ((member)) participant of the plan. The firefighter board members shall be appointed by the governor from a list provided by a recognized statewide council, affiliated with an international association representing the interests of firefighters.

      (c) Three of the board members shall be representatives of employers and shall be appointed by the governor.

      (d) One board member shall be a member of the house of representatives who is appointed by the governor based on the recommendation of the speaker of the house of representatives.

       (e) One board member shall be a member of the senate who is appointed by the governor based on the recommendation of the majority leader of the senate.

(f) After January 1, 2008, at least one board member must be a retired participant of the law enforcement officers' and firefighters' retirement system plan 2. This member may be appointed under (a) through (e) of this subsection.

      (2) The initial law enforcement officer and firefighter board members shall serve terms of six, four, and two years, respectively. Thereafter, law enforcement officer and firefighter board members serve terms of six years. ((The remaining board members serve terms of four years.)) The initial employer representative board members shall serve terms of four, five, and six years, respectively. Thereafter, employer representative board members serve terms of four years. The initial legislative board members shall serve terms of five years and six months. Thereafter, legislative board members serve terms of two years, which begin on January 1st of odd-numbered years. Board members may be reappointed to succeeding terms without limitation. Board members shall serve until their successors are appointed and seated.

      (3) In the event of a vacancy on the board, the vacancy shall be filled in the same manner as prescribed for an initial appointment.

      NEW SECTION. Sec. 2. A new section is added to chapter 41.26 RCW to read as follows:

      The legislative board members appointed under RCW 41.26.715 must include one member from the two largest political parties. The speaker of the house of representatives shall request a recommendation from the minority leader of the house of representatives if a member from the opposite party must be recommended for appointment. The majority leader of the senate shall request a recommendation from the minority leader of the senate if a member from the opposite party must be recommended for appointment."

      The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Ways & Means to Substitute House Bill No. 1679.

      The motion by Senator Prentice carried and the committee striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 2 of the title, after "board;" strike the remainder of the title and insert "amending RCW 41.26.715; and adding a new section to chapter 41.26 RCW."

MOTION

      On motion of Senator Prentice, the rules were suspended, Substitute House Bill No. 1679 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Prentice spoke in favor of passage of the bill.

MOTION

On motion of Senator Regala, Senator Kline was excused.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1679 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1679 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 1; Excused, 1.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 47

      Absent: Senator Hewitt - 1

      Excused: Senator Kline - 1

      SUBSTITUTE HOUSE BILL NO. 1679 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1897, by House Committee on State Government & Tribal Affairs (originally sponsored by Representatives Williams and Hunt)

      Expressing the legislature's intent that public disclosure requirements do not allow attorney invoices to be exempt in their entirety.

      The measure was read the second time.

MOTION

      On motion of Senator Fraser, the rules were suspended, Substitute House Bill No. 1897 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Fraser spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1897.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1897 and the bill passed the Senate by the following vote: Yeas, 44; Nays, 4; Absent, 0; Excused, 1.

      Voting yea: Senators Berkey, Brandland, Brown, Clements, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kohl-Welles, Marr, McAuliffe, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 44

      Voting nay: Senators Benton, Carrell, Delvin and McCaslin - 4

      Excused: Senator Kline - 1

      SUBSTITUTE HOUSE BILL NO. 1897, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1037, by House Committee on Technology, Energy & Communications (originally sponsored by Representatives Morris, Hudgins, Moeller and B. Sullivan)

      Regarding electrical transmission.

      The measure was read the second time.

MOTION

      Senator Poulsen moved that the following committee striking amendment by the Committee on Water, Energy & Telecommunications be not adopted.

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 80.50.020 and 2006 c 205 s 1 and 2006 c 196 s 1 are each reenacted and amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Applicant" means any person who makes application for a site certification pursuant to the provisions of this chapter.

      (2) "Application" means any request for approval of a particular site or sites filed in accordance with the procedures established pursuant to this chapter, unless the context otherwise requires.

      (3) "Person" means an individual, partnership, joint venture, private or public corporation, association, firm, public service company, political subdivision, municipal corporation, government agency, public utility district, or any other entity, public or private, however organized.

      (4) "Site" means any proposed or approved location of an energy facility, alternative energy resource, or electrical transmission facility.

      (5) "Certification" means a binding agreement between an applicant and the state which shall embody compliance to the siting guidelines, in effect as of the date of certification, which have been adopted pursuant to RCW 80.50.040 as now or hereafter amended as conditions to be met prior to or concurrent with the construction or operation of any energy facility.

      (6) "Associated facilities" means storage, transmission, handling, or other related and supporting facilities connecting an energy plant with the existing energy supply, processing, or distribution system, including, but not limited to, communications, controls, mobilizing or maintenance equipment, instrumentation, and other types of ancillary transmission equipment, off-line storage or venting required for efficient operation or safety of the transmission system and overhead, and surface or subsurface lines of physical access for the inspection, maintenance, and safe operations of the transmission facility and new transmission lines constructed to operate at nominal voltages ((in excess)) of at least 115,000 volts to connect a thermal power plant or alternative energy facilities to the northwest power grid. However, common carrier railroads or motor vehicles shall not be included.

      (7) "Transmission facility" means any of the following together with their associated facilities:

      (a) Crude or refined petroleum or liquid petroleum product transmission pipeline of the following dimensions: A pipeline larger than six inches minimum inside diameter between valves for the transmission of these products with a total length of at least fifteen miles;

      (b) Natural gas, synthetic fuel gas, or liquefied petroleum gas transmission pipeline of the following dimensions: A pipeline larger than fourteen inches minimum inside diameter between valves, for the transmission of these products, with a total length of at least fifteen miles for the purpose of delivering gas to a distribution facility, except an interstate natural gas pipeline regulated by the United States federal power commission((;)).

      (((c))) (8) "Electrical transmission facilities" ((in excess of)) means electrical power lines and related equipment, including substations, operating at a nominal voltage of at least 115,000 volts ((in national interest electric transmission corridors as designated by the United States secretary of the department of energy or the federal energy regulatory commission pursuant to section 1221 of the national energy policy act, and such rules and regulations as the secretary or the federal energy regulatory commission adopts to implement the act)).

      (((8))) (9) "Independent consultants" means those persons who have no financial interest in the applicant's proposals and who are retained by the council to evaluate the applicant's proposals, supporting studies, or to conduct additional studies.

      (((9))) (10) "Thermal power plant" means, for the purpose of certification, any electrical generating facility using any fuel, including nuclear materials, for distribution of electricity by electric utilities.

       (((10))) (11) "Energy facility" means an energy plant or transmission facilities: PROVIDED, That the following are excluded from the provisions of this chapter:

      (a) Facilities for the extraction, conversion, transmission or storage of water, other than water specifically consumed or discharged by energy production or conversion for energy purposes; and

      (b) Facilities operated by and for the armed services for military purposes or by other federal authority for the national defense.

      (((11))) (12) "Council" means the energy facility site evaluation council created by RCW 80.50.030.

      (((12))) (13) "Counsel for the environment" means an assistant attorney general or a special assistant attorney general who shall represent the public in accordance with RCW 80.50.080.

      (((13))) (14) "Construction" means on-site improvements, excluding exploratory work, which cost in excess of two hundred fifty thousand dollars.

      (((14))) (15) "Energy plant" means the following facilities together with their associated facilities:

      (a) Any stationary thermal power plant with generating capacity of three hundred fifty thousand kilowatts or more, measured using maximum continuous electric generating capacity, less minimum auxiliary load, at average ambient temperature and pressure, and floating thermal power plants of one hundred thousand kilowatts or more, including associated facilities. For the purposes of this subsection, "floating thermal power plants" means a thermal power plant that is suspended on the surface of water by means of a barge, vessel, or other floating platform;

      (b) Facilities which will have the capacity to receive liquefied natural gas in the equivalent of more than one hundred million standard cubic feet of natural gas per day, which has been transported over marine waters;

      (c) Facilities which will have the capacity to receive more than an average of fifty thousand barrels per day of crude or refined petroleum or liquefied petroleum gas which has been or will be transported over marine waters, except that the provisions of this chapter shall not apply to storage facilities unless occasioned by such new facility construction;

       (d) Any underground reservoir for receipt and storage of natural gas as defined in RCW 80.40.010 capable of delivering an average of more than one hundred million standard cubic feet of natural gas per day; and

      (e) Facilities capable of processing more than twenty-five thousand barrels per day of petroleum into refined products.

      (((15))) (16) "Land use plan" means a comprehensive plan or land use element thereof adopted by a unit of local government pursuant to chapter 35.63, 35A.63, 36.70, or 36.70A RCW, or as otherwise designated by this act.

      (((16))) (17) "Zoning ordinance" means an ordinance of a unit of local government regulating the use of land and adopted pursuant to chapter 35.63, 35A.63, 36.70, or 36.70A RCW or Article XI of the state Constitution, or as otherwise designated by this act.

      (((17))) (18) "Alternative energy resource" means: (a) Wind; (b) solar energy; (c) geothermal energy; (d) landfill gas; (e) wave or tidal action; or (f) biomass energy based on solid organic fuels from wood, forest, or field residues, or dedicated energy crops that do not include wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chrome-arsenic.

      (((18))) (19) "Secretary" means the secretary of the United States department of energy.

(20) "Preapplication process" means the process which is initiated by written correspondence from the applicant to the council, and includes the process adopted by the council for consulting with the applicant and with cities, towns, and counties prior to accepting applications for all transmission facilities.

      (21) "Preapplicant" means the applicant intending to apply for a site certificate agreement for an electrical transmission facility specified in subsection (8) of this section.

      Sec. 2. RCW 80.50.060 and 2006 c 196 s 4 are each amended to read as follows:

      (1) The provisions of this chapter ((shall)) apply to the construction of energy facilities which includes the new construction of energy facilities and the reconstruction or enlargement of existing energy facilities where the net increase in physical capacity or dimensions resulting from such reconstruction or enlargement meets or exceeds those capacities or dimensions set forth in RCW 80.50.020 (7) and (((14))) (15). No construction of such energy facilities may be undertaken, except as otherwise provided in this chapter, after July 15, 1977, without first obtaining certification in the manner provided in this chapter.

      (2) The provisions of this chapter apply to the construction, reconstruction, or enlargement of a new or existing energy facility that exclusively uses alternative energy resources and chooses to receive certification under this chapter, regardless of the generating capacity of the project.

      (3)(a) The provisions of this chapter apply to the construction ((of new)), reconstruction, or modification of electrical transmission facilities ((or the modification of existing electrical transmission facilities in a national interest electric transmission corridor designated by the secretary)):

      (i) In a national interest electric transmission corridor as specified in RCW 80.50.045;

      (ii) In transmission corridors as designated by a city, town, or county as part of its land use plans and zoning maps based on policies adopted in the plans and as designated by the council pursuant to section 3 of this act, if an applicant proposing to construct, reconstruct, or modify the electrical transmission facilities chooses to receive certification under this chapter; and

      (iii) In transmission corridors identified in the process described in section 3 of this act.

      (b) The provisions of this chapter shall not apply in instances where an applicant proposes to construct, reconstruct, or modify electrical transmission facilities in a transmission corridor wholly within a city or town's boundary provided, however, that a city or town within one hundred twenty days from the date of application will accept or decline jurisdiction and if jurisdiction is declined refer the applicant to the council for certification under this chapter.

      (c) For the purposes of this subsection, "modify" means a significant change to an electrical transmission facility and does not include the following: (i) Minor improvements such as the replacement of existing transmission line facilities or supporting structures with equivalent facilities or structures; (ii) the relocation of existing electrical transmission line facilities; (iii) the conversion of existing overhead lines to underground; or (iv) the placing of new or additional conductors, supporting structures, insulators, or their accessories on or replacement of supporting structures already built.

      (4) The provisions of this chapter shall not apply to normal maintenance and repairs which do not increase the capacity or dimensions beyond those set forth in RCW 80.50.020 (7) and (((14))) (15).

      (5) Applications for certification of energy facilities made prior to July 15, 1977 shall continue to be governed by the applicable provisions of law in effect on the day immediately preceding July 15, 1977 with the exceptions of RCW 80.50.190 and 80.50.071 which shall apply to such prior applications and to site certifications prospectively from July 15, 1977.

      (6) Applications for certification shall be upon forms prescribed by the council and shall be supported by such information and technical studies as the council may require.

      NEW SECTION. Sec. 3. A new section is added to chapter 80.50 RCW to read as follows:

      (1) For applications to site electrical transmission facilities, the council shall conduct a preapplication process pursuant to rules adopted by the council to govern such process, receive applications as prescribed in RCW 80.50.071, and conduct a public meeting pursuant to RCW 80.50.090(1).

      (2) The council shall consider and may recommend certification of electrical transmission facilities in corridors designated for this purpose by affected cities, towns, or counties:

      (a) Where the jurisdictions have identified electrical transmission facility corridors as part of their land use plans and zoning maps based on policies adopted in their plans;

      (b) Where the proposed electrical transmission facility is consistent with any adopted development regulations that govern the siting of electrical transmission facilities in such corridors; and

      (c) Where contiguous jurisdictions and jurisdictions in which related regional electrical transmission facilities are located have either prior to or during the preapplication process undertaken good faith efforts to coordinate the locations of their corridors consistent with RCW 36.70A.100.

       (3) In the absence of a corridor designation in the manner prescribed in subsection (2) of this section, the council shall as part of the preapplication process require the preapplicant to negotiate, as provided by rule adopted by the council, for a reasonable time with affected cities, towns, and counties to attempt to reach agreement about a site corridor plan. The application for certification shall identify the corridor agreed to by the applicant and cities, towns, and counties within the proposed corridor pursuant to the preapplication process.

      (4) If no corridor plan is agreed to by the applicant and cities, towns, and counties pursuant to subsection (3) of this section, the applicant shall propose a recommended corridor and electrical transmission facilities to be included within the proposed corridor.

      (5) The council shall consider the applicant's proposed corridor and electrical transmission facilities as provided in RCW 80.50.090 (2) and (4), and shall make a recommendation consistent with the relevant land use plans, zoning ordinances, or development regulations adopted by the cities, towns, and counties.

      NEW SECTION. Sec. 4. A new section is added to chapter 80.50 RCW to read as follows:

      (1) A preapplicant shall pay to the council a fee of ten thousand dollars to be applied to the cost of the preapplication process as a condition precedent to any action by the council, provided that costs in excess of this amount shall be paid only upon prior approval by the preapplicant, and provided further that any unexpended portions thereof shall be returned to the preapplicant.

      (2) The council shall consult with the preapplicant and prepare a plan for the preapplication process which shall commence with an informational public hearing within sixty days after the receipt of the preapplication fee as provided in RCW 80.50.090.

      (3) The preapplication plan shall include but need not be limited to:

      (a) An initial consultation to explain the proposal and request input from council staff, federal and state agencies, cities, towns, counties, port districts, tribal governments, property owners, and interested individuals;

       (b) Where applicable, a process to guide negotiations between the preapplicant and cities, towns, and counties within the corridor proposed pursuant to section 3 of this act."

      On page 1, line 2 of the title, after "council;" strike the remainder of the title and insert "amending RCW 80.50.060; reenacting and amending RCW 80.50.020; and adding new sections to chapter 80.50 RCW."

      The President declared the question before the Senate to be the motion by Senator Poulsen to not adopt the committee striking amendment by the Committee on Water, Energy & Telecommunications to Substitute House Bill No. 1037.

      The motion by Senator Poulsen carried and the committee striking amendment was not adopted by voice vote.

MOTION

      Senator Poulsen moved that the following striking amendment by Senators Poulsen and Delvin be adopted:

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 80.50.020 and 2006 c 205 s 1 and 2006 c 196 s 1 are each reenacted and amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Applicant" means any person who makes application for a site certification pursuant to the provisions of this chapter.

      (2) "Application" means any request for approval of a particular site or sites filed in accordance with the procedures established pursuant to this chapter, unless the context otherwise requires.

      (3) "Person" means an individual, partnership, joint venture, private or public corporation, association, firm, public service company, political subdivision, municipal corporation, government agency, public utility district, or any other entity, public or private, however organized.

      (4) "Site" means any proposed or approved location of an energy facility, alternative energy resource, or electrical transmission facility.

      (5) "Certification" means a binding agreement between an applicant and the state which shall embody compliance to the siting guidelines, in effect as of the date of certification, which have been adopted pursuant to RCW 80.50.040 as now or hereafter amended as conditions to be met prior to or concurrent with the construction or operation of any energy facility.

      (6) "Associated facilities" means storage, transmission, handling, or other related and supporting facilities connecting an energy plant with the existing energy supply, processing, or distribution system, including, but not limited to, communications, controls, mobilizing or maintenance equipment, instrumentation, and other types of ancillary transmission equipment, off-line storage or venting required for efficient operation or safety of the transmission system and overhead, and surface or subsurface lines of physical access for the inspection, maintenance, and safe operations of the transmission facility and new transmission lines constructed to operate at nominal voltages ((in excess)) of at least 115,000 volts to connect a thermal power plant or alternative energy facilities to the northwest power grid. However, common carrier railroads or motor vehicles shall not be included.

      (7) "Transmission facility" means any of the following together with their associated facilities:

      (a) Crude or refined petroleum or liquid petroleum product transmission pipeline of the following dimensions: A pipeline larger than six inches minimum inside diameter between valves for the transmission of these products with a total length of at least fifteen miles;

      (b) Natural gas, synthetic fuel gas, or liquefied petroleum gas transmission pipeline of the following dimensions: A pipeline larger than fourteen inches minimum inside diameter between valves, for the transmission of these products, with a total length of at least fifteen miles for the purpose of delivering gas to a distribution facility, except an interstate natural gas pipeline regulated by the United States federal power commission((;)).

      (((c))) (8) "Electrical transmission facilities" ((in excess of 115,000 volts in national interest electric transmission corridors as designated by the United States secretary of the department of energy or the federal energy regulatory commission pursuant to section 1221 of the national energy policy act, and such rules and regulations as the secretary or the federal energy regulatory commission adopts to implement the act)) means electrical power lines and related equipment.

      (((8))) (9) "Independent consultants" means those persons who have no financial interest in the applicant's proposals and who are retained by the council to evaluate the applicant's proposals, supporting studies, or to conduct additional studies.

      (((9))) (10) "Thermal power plant" means, for the purpose of certification, any electrical generating facility using any fuel, including nuclear materials, for distribution of electricity by electric utilities.

       (((10))) (11) "Energy facility" means an energy plant or transmission facilities: PROVIDED, That the following are excluded from the provisions of this chapter:

      (a) Facilities for the extraction, conversion, transmission or storage of water, other than water specifically consumed or discharged by energy production or conversion for energy purposes; and

      (b) Facilities operated by and for the armed services for military purposes or by other federal authority for the national defense.

      (((11))) (12) "Council" means the energy facility site evaluation council created by RCW 80.50.030.

      (((12))) (13) "Counsel for the environment" means an assistant attorney general or a special assistant attorney general who shall represent the public in accordance with RCW 80.50.080.

      (((13))) (14) "Construction" means on-site improvements, excluding exploratory work, which cost in excess of two hundred fifty thousand dollars.

      (((14))) (15) "Energy plant" means the following facilities together with their associated facilities:

      (a) Any stationary thermal power plant with generating capacity of three hundred fifty thousand kilowatts or more, measured using maximum continuous electric generating capacity, less minimum auxiliary load, at average ambient temperature and pressure, and floating thermal power plants of one hundred thousand kilowatts or more, including associated facilities. For the purposes of this subsection, "floating thermal power plants" means a thermal power plant that is suspended on the surface of water by means of a barge, vessel, or other floating platform;

      (b) Facilities which will have the capacity to receive liquefied natural gas in the equivalent of more than one hundred million standard cubic feet of natural gas per day, which has been transported over marine waters;

      (c) Facilities which will have the capacity to receive more than an average of fifty thousand barrels per day of crude or refined petroleum or liquefied petroleum gas which has been or will be transported over marine waters, except that the provisions of this chapter shall not apply to storage facilities unless occasioned by such new facility construction;

       (d) Any underground reservoir for receipt and storage of natural gas as defined in RCW 80.40.010 capable of delivering an average of more than one hundred million standard cubic feet of natural gas per day; and

      (e) Facilities capable of processing more than twenty-five thousand barrels per day of petroleum into refined products.

      (((15))) (16) "Land use plan" means a comprehensive plan or land use element thereof adopted by a unit of local government pursuant to chapter 35.63, 35A.63, 36.70, or 36.70A RCW, or as otherwise designated by this act.

      (((16))) (17) "Zoning ordinance" means an ordinance of a unit of local government regulating the use of land and adopted pursuant to chapter 35.63, 35A.63, 36.70, or 36.70A RCW or Article XI of the state Constitution, or as otherwise designated by this act.

      (((17))) (18) "Alternative energy resource" means: (a) Wind; (b) solar energy; (c) geothermal energy; (d) landfill gas; (e) wave or tidal action; or (f) biomass energy based on solid organic fuels from wood, forest, or field residues, or dedicated energy crops that do not include wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chrome-arsenic.

      (((18))) (19) "Secretary" means the secretary of the United States department of energy.

(20) "Preapplication process" means the process which is initiated by written correspondence from the preapplicant to the council, and includes the process adopted by the council for consulting with the preapplicant and with cities, towns, and counties prior to accepting applications for all transmission facilities.

      (21) "Preapplicant" means a person considering applying for a site certificate agreement for any transmission facility.

      Sec. 2. RCW 80.50.060 and 2006 c 196 s 4 are each amended to read as follows:

      (1) The provisions of this chapter ((shall)) apply to the construction of energy facilities which includes the new construction of energy facilities and the reconstruction or enlargement of existing energy facilities where the net increase in physical capacity or dimensions resulting from such reconstruction or enlargement meets or exceeds those capacities or dimensions set forth in RCW 80.50.020 (7) and (((14))) (15). No construction of such energy facilities may be undertaken, except as otherwise provided in this chapter, after July 15, 1977, without first obtaining certification in the manner provided in this chapter.

      (2) The provisions of this chapter apply to the construction, reconstruction, or enlargement of a new or existing energy facility that exclusively uses alternative energy resources and chooses to receive certification under this chapter, regardless of the generating capacity of the project.

      (3)(a) The provisions of this chapter apply to the construction ((of new)), reconstruction, or modification of electrical transmission facilities ((or the modification of existing electrical transmission facilities in a national interest electric transmission corridor designated by the secretary)) when:

      (i) The facilities are located in a national interest electric transmission corridor as specified in RCW 80.50.045;

      (ii) An applicant chooses to receive certification under this chapter, and the facilities are: (A) Of a nominal voltage of at least one hundred fifteen thousand volts and are located in a completely new corridor, except for the terminus of the new facility or interconnection of the new facility with the existing grid, and the corridor is not otherwise used for electrical transmission facilities; and (B) located in more than one jurisdiction that has promulgated land use plans or zoning ordinances; or

      (iii) An applicant chooses to receive certification under this chapter, and the facilities are: (A) Of a nominal voltage in excess of one hundred fifteen thousand volts; and (B) located outside an electrical transmission corridor identified in (a)(i) and (ii) of this subsection (3).

      (b) For the purposes of this subsection, "modify" means a significant change to an electrical transmission facility and does not include the following: (i) Minor improvements such as the replacement of existing transmission line facilities or supporting structures with equivalent facilities or structures; (ii) the relocation of existing electrical transmission line facilities; (iii) the conversion of existing overhead lines to underground; or (iv) the placing of new or additional conductors, supporting structures, insulators, or their accessories on or replacement of supporting structures already built.

       (4) The provisions of this chapter shall not apply to normal maintenance and repairs which do not increase the capacity or dimensions beyond those set forth in RCW 80.50.020 (7) and (((14))) (15).

      (5) Applications for certification of energy facilities made prior to July 15, 1977 shall continue to be governed by the applicable provisions of law in effect on the day immediately preceding July 15, 1977 with the exceptions of RCW 80.50.190 and 80.50.071 which shall apply to such prior applications and to site certifications prospectively from July 15, 1977.

      (6) Applications for certification shall be upon forms prescribed by the council and shall be supported by such information and technical studies as the council may require.

      NEW SECTION. Sec. 3. A new section is added to chapter 80.50 RCW to read as follows:

      (1) For applications to site electrical transmission facilities, the council shall conduct a preapplication process pursuant to rules adopted by the council to govern such process, receive applications as prescribed in RCW 80.50.071, and conduct public meetings pursuant to RCW 80.50.090.

      (2) The council shall consider and may recommend certification of electrical transmission facilities in corridors designated for this purpose by affected cities, towns, or counties:

      (a) Where the jurisdictions have identified electrical transmission facility corridors as part of their land use plans and zoning maps based on policies adopted in their plans;

      (b) Where the proposed electrical transmission facility is consistent with any adopted development regulations that govern the siting of electrical transmission facilities in such corridors; and

      (c) Where contiguous jurisdictions and jurisdictions in which related regional electrical transmission facilities are located have either prior to or during the preapplication process undertaken good faith efforts to coordinate the locations of their corridors consistent with RCW 36.70A.100.

      (3)(a) In the absence of a corridor designation in the manner prescribed in subsection (2) of this section, the council shall as part of the preapplication process require the preapplicant to negotiate, as provided by rule adopted by the council, for a reasonable time with affected cities, towns, and counties to attempt to reach agreement about a corridor plan. The application for certification shall identify only the corridor agreed to by the applicant and cities, towns, and counties within the proposed corridor pursuant to the preapplication process.

      (b) If no corridor plan is agreed to by the applicant and cities, towns, and counties pursuant to (a) of this subsection, the applicant shall propose a recommended corridor and electrical transmission facilities to be included within the proposed corridor.

      (c) The council shall consider the applicant's proposed corridor and electrical transmission facilities as provided in RCW 80.50.090 (2) and (4), and shall make a recommendation consistent with RCW 80.50.090 and 80.50.100.

      NEW SECTION. Sec. 4. A new section is added to chapter 80.50 RCW to read as follows:

      (1) A preapplicant shall pay to the council a fee of ten thousand dollars to be applied to the cost of the preapplication process as a condition precedent to any action by the council, provided that costs in excess of this amount shall be paid only upon prior approval by the preapplicant, and provided further that any unexpended portions thereof shall be returned to the preapplicant.

      (2) The council shall consult with the preapplicant and prepare a plan for the preapplication process which shall commence with an informational public hearing within sixty days after the receipt of the preapplication fee as provided in RCW 80.50.090.

      (3) The preapplication plan shall include but need not be limited to:

      (a) An initial consultation to explain the proposal and request input from council staff, federal and state agencies, cities, towns, counties, port districts, tribal governments, property owners, and interested individuals;

      (b) Where applicable, a process to guide negotiations between the preapplicant and cities, towns, and counties within the corridor proposed pursuant to section 3 of this act.

      NEW SECTION. Sec. 5. 2006 c 196 s 2 (uncodified) is repealed."

      Senators Poulsen and Delvin spoke in favor of adoption of the striking amendment.

      The President declared the question before the Senate to be the adoption of the striking amendment by Senators Poulsen and Delvin to Substitute House Bill No. 1037.

      The motion by Senator Poulsen carried and the striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 2 of the title, after "council;" strike the remainder of the title and insert "amending RCW 80.50.060; reenacting and amending RCW 80.50.020; adding new sections to chapter 80.50 RCW; and repealing 2006 c 196 s 2 (uncodified)."

MOTION

      On motion of Senator Poulsen, the rules were suspended, Substitute House Bill No. 1037 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Poulsen spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1037 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1037 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Benton, Berkey, Brandland, Brown, Carrell, Clements, Delvin, Eide, Fairley, Franklin, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Holmquist, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler, Sheldon, Shin, Spanel, Stevens, Swecker, Tom, Weinstein and Zarelli - 48

      Excused: Senator Kline - 1

      SUBSTITUTE HOUSE BILL NO. 1037 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

MOTION

At 3:30 p.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

The Senate was called to order at 4:33 p.m. by President Owen.

SECOND READING

      SECOND SUBSTITUTE HOUSE BILL NO. 2220, by House Committee on Appropriations (originally sponsored by Representative Lantz)

      Regarding shellfish. Revised for 2nd Substitute: Regarding shellfish aquaculture.

      The measure was read the second time.

MOTION

      Senator Jacobsen moved that the following committee striking amendment by the Committee on Natural Resources, Ocean & Recreation be adopted.

      Strike everything after the enacting clause and insert the following:

      "NEW SECTION. Sec. 1. A new section is added to chapter 28B.20 RCW to read as follows:

      (1) The sea grant program at the University of Washington shall, consistent with this section, commission a series of scientific research studies that examines the possible effects, including the cumulative effects, of the current prevalent geoduck aquaculture techniques and practices on the natural environment in and around Puget Sound, including the Strait of Juan de Fuca. The sea grant program shall use funding provided from the geoduck aquaculture research account created in section 2 of this act to review existing literature, directly perform research identified as needed, or to enter into and manage contracts with scientific organizations or institutions to accomplish these results.

      (2) Prior to entering into a contract with a scientific organization or institution, the sea grant program must:

      (a) Analyze, through peer review, the credibility of the proposed party to the contract, including whether the party has credible experience and knowledge and has access to the facilities necessary to fully execute the research required by the contract; and

      (b) Require that all proposed parties to a contract fully disclose any past, present, or planned future personal or professional connections with the shellfish industry or public interest groups.

      (3) All research commissioned under this section must be subjected to a rigorous peer review process prior to being accepted and reported by the sea grant program.

      (4) In prioritizing and directing research under this section, the sea grant program shall meet with the department of ecology at least annually and rely on guidance submitted by the department of ecology. The department of ecology shall convene the shellfish aquaculture regulatory committee created in section 4 of this act as necessary to serve as an oversight committee to formulate the guidance provided to the sea grant program. The objective of the oversight committee, and the resulting guidance provided to the sea grant program, is to ensure that the research required under this section satisfies the planning, permitting, and data management needs of the state, to assist in the prioritization of research given limited funding, and to help identify any research that is beneficial to complete other than what is listed in subsection (5) of this section.

      (5) To satisfy the minimum requirements of subsection (1) of this section, the sea grant program shall review all scientific research that is existing or in progress that examines the possible effect of currently prevalent geoduck practices, on the natural environment, and prioritize and conduct new studies as needed, to measure and assess the following:

      (a) The environmental effects of structures commonly used in the aquaculture industry to protect juvenile geoducks from predation;

      (b) The environmental effects of commercial harvesting of geoducks from intertidal geoduck beds, focusing on current prevalent harvesting techniques, including a review of the recovery rates for benthic communities after harvest;

      (c) The extent to which geoducks in standard aquaculture tracts alter the ecological characteristics of overlying waters while the tracts are submerged, including impacts on species diversity, and the abundance of other benthic organisms;

      (d) Baseline information regarding naturally existing parasites and diseases in wild and cultured geoducks, including whether and to what extent commercial intertidal geoduck aquaculture practices impact the baseline;

      (e) Genetic interactions between cultured and wild geoduck, including measurements of differences between cultured geoducks and wild geoducks in terms of genetics and reproductive status; and

      (f) The impact of the use of sterile triploid geoducks and whether triploid animals diminish the genetic interactions between wild and cultured geoducks.

      (6) If adequate funding is not made available for the completion of all research required under this section, the sea grant program shall consult with the shellfish aquaculture regulatory committee, via the department of ecology, to prioritize which of the enumerated research projects have the greatest cost/benefit ratio in terms of providing information important for regulatory decisions. The prioritization process may include the addition of any new studies that may be appropriate in addition to, or in place of, studies listed in this section.

      (7) When appropriate, all research commissioned under this section must address localized and cumulative effects of geoduck aquaculture.

      (8) The sea grant program and the University of Washington are prohibited from retaining greater than fifteen percent of any funding provided to implement this section for administrative overhead or other deductions not directly associated with conducting the research required by this section.

      (9) Individual commissioned contracts under this section may address single or multiple components listed for study under this section.

      (10) All research commissioned under this section must be completed and the results reported to the appropriate committees of the legislature by December 1, 2013. In addition, the sea grant program shall provide the appropriate committees of the legislature with annual reports updating the status and progress of the ongoing studies that are completed in advance of the 2013 deadline.

2.                       NEW SECTION. Sec. 3. A new section is added to chapter 28B.20 RCW to read as follows:

      The geoduck aquaculture research account is created in the custody of the state treasurer. All receipts from any legislative appropriations, the industry, or any other private or public source directed to the account must be deposited in the account. Expenditures from the account may only be used by the sea grant program for the geoduck research projects identified by section 1 of this act. Only the president of the University of Washington or the president's designee may authorize expenditures from the account. The account is subject to the allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

      Sec. 4. RCW 79.135.100 and 1984 c 221 s 10 are each amended to read as follows:

(1) If state-owned aquatic lands are used for aquaculture production or harvesting, rents and fees shall be established through competitive bidding or negotiation.

(2) The department is prohibited from offering leases that would permit the intertidal commercial aquaculture of geoducks on more than a total of twenty-three acres of state-owned aquatic lands until: (a) The department of ecology and the shellfish aquaculture regulatory committee have submitted a final report containing recommendations as required under section 4 of this act; and (b) the legislature has had at least one full legislative session to consider and act upon the recommendations. If the legislature does not take action limiting the department's authority to lease state-owned aquatic lands for geoduck aquaculture under (b) of this subsection, then the department may resume leasing property consistent with any applicable federal, state, and local guidelines or regulations.

      (3) All rents and fees collected from leases of state-owned aquatic lands for purposes of geoduck aquaculture must be deposited into the geoduck aquaculture research account created under section 2 of this act.

      (4) Any intertidal leases entered into by the department for geoduck aquaculture must be conditioned in such a way that: (a) The department can engage in monitoring of the environmental impacts of the lease's execution, without unreasonably diminishing the economic viability of the lease, and that the lease tracts are eligible to be made part of the studies conducted under section 1 of this act; and (b) any aquaculture equipment and materials used in the cultivation, protection, or harvest of geoducks be marked with the registration number of the aquatic farmer as required under RCW 77.115.040. The department must notify all abutting landowners of the intent of the department to lease the tidal and subtidal lands for the purposes of geoduck aquaculture. An intertidal lease entered into by the department for the purpose of geoduck aquaculture may not contain an automatic right of renewal.

      NEW SECTION. Sec. 5. (1) The shellfish aquaculture regulatory committee is established to, consistent with this section, serve as an advisory body to the department of ecology on regulatory processes and approvals for all current and new shellfish aquaculture activities, and the activities conducted pursuant to RCW 90.58.060, as the activities relate to shellfish. The shellfish aquaculture regulatory committee is advisory in nature, and no vote or action of the committee may overrule existing statutes, regulations, or local ordinances.

      (2) The shellfish aquaculture regulatory committee shall develop recommendations as to:

      (a) A regulatory system or permit process for all current and new shellfish aquaculture projects and activities that integrates all applicable existing local, state, and federal regulations and is efficient both for the regulators and the regulated; and

      (b) Appropriate guidelines for geoduck aquaculture operations to be included in shoreline master programs under section 5 of this act.

      (3)(a) The members of the shellfish aquaculture regulatory committee shall be appointed by the director of the department of ecology as follows:

      (i) Two representatives of county government, one from a county located on the Puget Sound, and one from a county located on the Pacific Ocean;

      (ii) Two individuals who are professionally engaged in the commercial aquaculture of shellfish, one who owns or operates an aquatic farm in Puget Sound, and one who owns or operates an aquatic farm in state waters other than the Puget Sound;

      (iii) Two representatives of organizations representing the environmental community;

      (iv) Two individuals who own shoreline property, one of which does not have a commercial geoduck operation on his or her property and one of which who does have a commercial geoduck operation on his or her property; and

      (v) One representative each from the following state agencies: The department of ecology, the department of fish and wildlife, the department of agriculture, and the department of natural resources.

      (b) In addition to the other participants listed in this subsection, the governor shall invite the full participation of two tribal governments, at least one of which is located within the drainage of the Puget Sound.

       (4) The department of ecology shall provide administrative and clerical assistance to the shellfish aquaculture regulatory committee and all agencies listed in subsection (3) of this section shall provide technical assistance.

      (5) Nonagency members of the shellfish aquaculture regulatory committee will not be compensated, but are entitled to be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

      (6) Any participation by a Native American tribe on the shellfish aquaculture regulatory committee shall not, under any circumstances, be viewed as an admission by the tribe that any of its activities, or those of its members, are subject to any of the statutes, regulations, ordinances, standards, or permit systems reviewed, considered, or proposed by the committee.

      (7) The shellfish aquaculture regulatory committee is authorized to form technical advisory panels as needed and appoint to them members not on the shellfish aquaculture regulatory committee.

      (8) The department of ecology shall report the recommendations and findings of the shellfish aquaculture regulatory committee to the appropriate committees of the legislature by December 1, 2007, with a further report, if necessary, by December 1, 2008.

      NEW SECTION. Sec. 6. (1) The department of ecology shall develop, by rule, guidelines for the appropriate siting and operation of geoduck aquaculture operations to be included in any master program under this section. The guidelines adopted under this section must be prepared with the advice of the shellfish aquaculture regulatory committee created in section 4 of this act, which shall serve as the advisory committee for the development of the guidelines. The guidelines must include abutting landowner notification of proposed tidal and subtidal aquaculture activities.

      (2) The guidelines required under this section must be filed for public review and comment no later than six months after the delivery of the final report by the shellfish aquaculture regulatory committee created in section 4 of this act.

      (3) The department of ecology shall update the guidelines required under this section, as necessary, after the completion of the geoduck research by the sea grant program at the University of Washington required under section 1 of this act.

      Sec. 7. RCW 77.115.040 and 1993 sp.s. c 2 s 58 are each amended to read as follows:

(1) All aquatic farmers as defined in RCW 15.85.020 shall register with the department. The director shall develop and maintain a registration list of all aquaculture farms and assign each farm a registration number. The department shall periodically update the list to ensure accuracy. The department shall coordinate with the department of health using shellfish growing area certification data when updating the registration list.

(2) Registered aquaculture farms shall provide the department ((production statistical data)) with the following information: (a) The name of the aquatic farmer; (b) the address of the aquatic farmer; (c) contact information such as telephone, fax, web site, and email address, if available; (d) the number of acres under cultivation; (e) the name of the landowner of the property being cultivated or otherwise used in the aquatic farming operation; (f) the private sector cultured aquatic product being propagated, farmed, or cultivated; and (g) production statistical data. As a condition of registration, all aquatic farmers shall provide the department with proof of abutting landowner notification of geoduck farming activities.

      (3) The department shall require a registered aquatic farmer who commercially farms and manages the cultivation of geoduck to mark any aquaculture equipment and materials used in the cultivation, protection, or harvest of geoducks with the registration number.

      (4) The department must publish the contact information of a staff person responsible for managing the registration list who is available to answer questions from the public regarding aquatic farms that cultivate geoducks.

(5) The state veterinarian shall be provided with registration and statistical data by the department.

      NEW SECTION. Sec. 8. If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2007, in the omnibus appropriations act, this act is null and void."

      The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Natural Resources, Ocean & Recreation to Second Substitute House Bill No. 2220.

      The motion by Senator Jacobsen carried and the committee striking amendment was adopted by voice vote.

MOTION

      There being no objection, the following title amendment was adopted:

      On page 1, line 1 of the title, after "shellfish;" strike the remainder of the title and insert "amending RCW 79.135.100 and 77.115.040; adding new sections to chapter 28B.20 RCW; and creating new sections."

MOTION

      On motion of Senator Jacobsen, the rules were suspended, Second Substitute House Bill No. 2220 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Jacobsen spoke in favor of passage of the bill.

      Senator Swecker spoke against passage of the bill.

MOTION

On motion of Senator Regala, Senators Brown, Hargrove and Prentice were excused.

      Senators Sheldon spoke against passage of the bill.

      Senators Spanel, Fraser, Morton and Rockefeller spoke in favor of passage of the bill.

      The President declared the question before the Senate to be the final passage of Second Substitute House Bill No. 2220 as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Second Substitute House Bill No. 2220 as amended by the Senate and the bill passed the Senate by the following vote: Yeas, 37; Nays, 11; Absent, 0; Excused, 1.

      Voting yea: Senators Benton, Berkey, Brown, Carrell, Delvin, Eide, Fairley, Franklin, Fraser, Haugen, Jacobsen, Kastama, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McCaslin, Morton, Murray, Oemig, Parlette, Pflug, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Shin, Spanel, Stevens, Tom, Weinstein and Zarelli - 37

      Voting nay: Senators Brandland, Clements, Hatfield, Hewitt, Hobbs, Holmquist, Honeyford, Kauffman, Schoesler, Sheldon and Swecker - 11

      Excused: Senator Hargrove - 1

      SECOND SUBSTITUTE HOUSE BILL NO. 2220 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

SIGNED BY THE PRESIDENT

The President signed:

      SENATE BILL NO. 5123,

      ENGROSSED SUBSTITUTE SENATE BILL NO. 5297,

      SUBSTITUTE SENATE BILL NO. 5336,

      SUBSTITUTE SENATE BILL NO. 5445,

      SUBSTITUTE SENATE BILL NO. 5568,

      SUBSTITUTE SENATE BILL NO. 5676,

      SENATE BILL NO. 5773,

      SUBSTITUTE SENATE BILL NO. 5972,

      SUBSTITUTE SENATE BILL NO. 5984,

      SENATE BILL NO. 6014,

      SENATE JOINT RESOLUTION NO. 8212,

SECOND READING

      ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1569, by House Committee on Appropriations (originally sponsored by Representatives Cody, Campbell, Morrell, Linville, Moeller, Green, Seaquist, Conway, Dickerson, Appleton, McIntire, McCoy, Kagi, Pedersen, Kenney, Lantz, Santos, Wood and Ormsby)

      Reforming the health care system in Washington state.

      The measure was read the second time.

MOTION

      Senator Keiser moved that the following committee striking amendment by the Committee on Ways & Means be not adopted.

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 70.47A.010 and 2006 c 255 s 1 are each amended to read as follows:

      (1) The legislature finds that many small employers struggle with the cost of providing employer-sponsored health insurance coverage to their employees, while others are unable to offer employer-sponsored health insurance due to its high cost. Low-wage workers also struggle with the burden of paying their share of the costs of employer-sponsored health insurance, while others turn down their employer's offer of coverage due to its costs.

      (2) The legislature intends, through establishment of a ((small employer)) health insurance partnership program, to remove economic barriers to health insurance coverage for low-wage employees of small employers by building on the private sector health benefit plan system and encouraging employer and employee participation in employer-sponsored health benefit plan coverage.

      Sec. 2. RCW 70.47A.020 and 2006 c 255 s 2 are each amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Administrator" means the administrator of the Washington state health care authority, established under chapter 41.05 RCW.

      (2) "Board" means the health insurance partnership board established in section 4 of this act.

      (3) "Eligible ((employee)) partnership participant" means an individual who:

      (a) Is a resident of the state of Washington;

       (b) Has family income ((less than)) that does not exceed two hundred percent of the federal poverty level, as determined annually by the federal department of health and human services; and

      (c) Is employed by a participating small employer or is a former employee of a participating small employer who chooses to continue receiving coverage through the partnership following separation from employment.

      (((3))) (4) "Health benefit plan" has the same meaning as defined in RCW 48.43.005 ((or any plan provided by a self-funded multiple employer welfare arrangement as defined in RCW 48.125.010 or by another benefit arrangement defined in the federal employee retirement income security act of 1974, as amended)).

      (((4) "Program")) (5) "Participating small employer" means a small employer that employs at least one eligible partnership participant and has entered into an agreement with the partnership for the partnership to offer and administer the small employer's group health benefit plan, as defined in federal law, Sec. 706 of ERISA (29 U.S.C. Sec. 1167), for enrollees in the plan.

      (6) "Partnership" means the ((small employer)) health insurance partnership ((program)) established in RCW 70.47A.030.

      (((5))) (7) "Partnership participant" means an employee of a participating small employer, or a former employee of a participating small employer who chooses to continue receiving coverage through the partnership following separation from employment.

      (8) "Small employer" has the same meaning as defined in RCW 48.43.005.

      (((6))) (9) "Subsidy" or "premium subsidy" means payment or reimbursement to an eligible ((employee)) partnership participant toward the purchase of a health benefit plan, and may include a net billing arrangement with insurance carriers or a prospective or retrospective payment for health benefit plan premiums.

      Sec. 3. RCW 70.47A.030 and 2006 c 255 s 3 are each amended to read as follows:

(1) To the extent funding is appropriated in the operating budget for this purpose, the ((small employer)) health insurance partnership ((program)) is established. The administrator shall be responsible for the implementation and operation of the ((small employer)) health insurance partnership ((program)), directly or by contract. The administrator shall offer premium subsidies to eligible ((employees)) partnership participants under RCW 70.47A.040.

(2) Consistent with policies adopted by the board under section 4 of this act, the administrator shall, directly or by contract:

      (a) Establish and administer procedures for enrolling small employers in the partnership, including publicizing the existence of the partnership and disseminating information on enrollment, and establishing rules related to minimum participation of employees in small groups purchasing health insurance through the partnership. Opportunities to publicize the program for outreach and education of small employers on the value of insurance shall explore the use of online employer guides. As a condition of participating in the partnership, a small employer must agree to establish a cafeteria plan under section 125 of the federal internal revenue code that will enable employees to use pretax dollars to pay their share of their health benefit plan premium. The partnership shall provide technical assistance to small employers for this purpose;

      (b) Establish and administer procedures for health benefit plan enrollment by employees of small employers during open enrollment periods and outside of open enrollment periods upon the occurrence of any qualifying event specified in the federal health insurance portability and accountability act of 1996 or applicable state law. Neither the employer nor the partnership shall limit an employee's choice of coverage from among all the health benefit plans offered;

      (c) Establish and manage a system for the partnership to be designated as the sponsor or administrator of a participating small employer health benefit plan and to undertake the obligations required of a plan administrator under federal law;

      (d) Establish and manage a system of collecting and transmitting to the applicable carriers all premium payments or contributions made by or on behalf of partnership participants, including employer contributions, automatic payroll deductions for partnership participants, premium subsidy payments, and contributions from philanthropies;

      (e) Establish and manage a system for determining eligibility for and making premium subsidy payments under this act;

       (f) Establish a mechanism to apply a surcharge to all health benefit plans, which shall be used only to pay for administrative and operational expenses of the partnership. The surcharge must be applied uniformly to all health benefit plans offered through the partnership and must be included in the premium for each health benefit plan. Surcharges may not be used to pay any premium assistance payments under this chapter;

      (g) Design a schedule of premium subsidies that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members based on a benchmark health benefit plan designated by the board. The amount of an eligible partnership participant's premium subsidy shall be determined by applying a sliding scale subsidy schedule with the percentage of premium similar to that developed for subsidized basic health plan enrollees under RCW 70.47.060. The subsidy shall be applied to the employee's premium obligation for his or her health benefit plan, so that employees benefit financially from any employer contribution to the cost of their coverage through the partnership.

      (3) The administrator may enter into interdepartmental agreements with the office of the insurance commissioner, the department of social and health services, and any other state agencies necessary to implement this chapter.

      NEW SECTION. Sec. 4. A new section is added to chapter 70.47A RCW to read as follows:

      (1) The health insurance partnership board is hereby established. The governor shall appoint a nine-member board composed as follows:

      (a) Two representatives of small employers;

      (b) Two representatives of employees of small employers, one of whom shall represent low-wage employees;

      (c) Four employee health plan benefits specialists; and

      (d) The administrator.

      (2) The governor shall appoint the initial members of the board to staggered terms not to exceed four years. Initial appointments shall be made on or before June 1, 2007. Members appointed thereafter shall serve two-year terms. Members of the board shall be compensated in accordance with RCW 43.03.250 and shall be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060. The board shall prescribe rules for the conduct of its business. The administrator shall be the chair of the board. Meetings of the board shall be at the call of the chair.

      (3) The board may establish technical advisory committees or seek the advice of technical experts when necessary to execute the powers and duties included in this section.

      (4) The board and employees of the board shall not be civilly or criminally liable and shall not have any penalty or cause of action of any nature arise against them for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under this chapter. Nothing in this section prohibits legal actions against the board to enforce the board's statutory or contractual duties or obligations.

      NEW SECTION. Sec. 5. A new section is added to chapter 70.47A RCW to read as follows:

      (1) The health insurance partnership board shall:

      (a) Develop policies for enrollment of small employers in the partnership, including minimum participation rules for small employer groups. The small employer shall determine the criteria for eligibility and enrollment in his or her plan and the terms and amounts of the employer's contributions to that plan, consistent with any minimum employer premium contribution level established by the board under (d) of this subsection;

      (b) Designate health benefit plans that are currently offered in the small group market that will qualify for premium subsidy payments. At least four health benefit plans shall be chosen, with multiple deductible and point-of-service cost-sharing options. The health benefit plans shall range from catastrophic to comprehensive coverage, and one health benefit plan shall be a high deductible health plan. Every effort shall be made to include health benefit plans that include components to maximize the quality of care provided and result in improved health outcomes, such as preventive care, wellness incentives, chronic care management services, and provider network development and payment policies related to quality of care;

      (c) Approve a mid-range benefit plan from those selected to be used as a benchmark plan for calculating premium subsidies;

       (d) Determine whether there should be a minimum employer premium contribution on behalf of employees, and if so, how much;

      (e) Determine appropriate health benefit plan rating methodologies. The methodologies shall be based on the small group adjusted community rate as defined in Title 48 RCW. The board shall evaluate the impact of applying the small group community rating with the partnership principle of allowing each employee to choose their health benefit plan, and consider options to reduce uncertainty for carriers and provide for efficient risk management of high-cost enrollees through risk adjustment, reinsurance, or other mechanisms;

      (f) Conduct analyses and provide recommendations as requested by the legislature and the governor, with the assistance of staff from the health care authority and the office of the insurance commissioner.

      (2) The board may authorize one or more limited health care service plans for dental care services to be offered by limited health care service contractors under RCW 48.44.035. However, such plan shall not qualify for subsidy payments.

      (3) In fulfilling the requirements of this section, the board shall consult with small employers, the office of the insurance commissioner, members in good standing of the American academy of actuaries, health carriers, agents and brokers, and employees of small business.

      Sec. 6. RCW 70.47A.040 and 2006 c 255 s 4 are each amended to read as follows:

      (((1))) Beginning ((July 1, 2007)) September 1, 2008, the administrator shall accept applications from eligible ((employees)) partnership participants, on behalf of themselves, their spouses, and their dependent children, to receive premium subsidies through the ((small employer)) health insurance partnership ((program)).

      (((2) Premium subsidy payments may be provided to eligible employees if:

      (a) The eligible employee is employed by a small employer;

      (b) The actuarial value of the health benefit plan offered by the small employer is at least equivalent to that of the basic health plan benefit offered under chapter 70.47 RCW. The office of the insurance commissioner under Title 48 RCW shall certify those small employer health benefit plans that are at least actuarially equivalent to the basic health plan benefit; and

       (c) The small employer will pay at least forty percent of the monthly premium cost for health benefit plan coverage of the eligible employee.

      (3) The amount of an eligible employee's premium subsidy shall be determined by applying the sliding scale subsidy schedule developed for subsidized basic health plan enrollees under RCW 70.47.060 to the employee's premium obligation for his or her employer's health benefit plan.

      (4) After an eligible individual has enrolled in the program, the program shall issue subsidies in an amount determined pursuant to subsection (3) of this section to either the eligible employee or to the carrier designated by the eligible employee.

      (5) An eligible employee must agree to provide verification of continued enrollment in his or her small employer's health benefit plan on a semiannual basis or to notify the administrator whenever his or her enrollment status changes, whichever is earlier. Verification or notification may be made directly by the employee, or through his or her employer or the carrier providing the small employer health benefit plan. When necessary, the administrator has the authority to perform retrospective audits on premium subsidy accounts. The administrator may suspend or terminate an employee's participation in the program and seek repayment of any subsidy amounts paid due to the omission or misrepresentation of an applicant or enrolled employee. 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.))

      Sec. 7. RCW 48.21.045 and 2004 c 244 s 1 are each amended to read as follows:

      (1)(a) An insurer offering any health benefit plan to a small employer, either directly or through an association or member-governed group formed specifically for the purpose of purchasing health care, may offer and actively market to the small employer a health benefit plan featuring a limited schedule of covered health care services. Nothing in this subsection shall preclude an insurer from offering, or a small employer from purchasing, other health benefit plans that may have more comprehensive benefits than those included in the product offered under this subsection. An insurer offering a health benefit plan under this subsection shall clearly disclose all covered benefits to the small employer in a brochure filed with the commissioner.

      (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.21.130, 48.21.140, 48.21.141, 48.21.142, 48.21.144, 48.21.146, 48.21.160 through 48.21.197, 48.21.200, 48.21.220, 48.21.225, 48.21.230, 48.21.235, 48.21.240, 48.21.244, 48.21.250, 48.21.300, 48.21.310, or 48.21.320.

      (2) Nothing in this section shall prohibit an insurer from offering, or a purchaser from seeking, health benefit plans with benefits in excess of the health benefit plan offered under subsection (1) of this section. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

      (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

      (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

      (i) Geographic area;

      (ii) Family size;

      (iii) Age; and

      (iv) Wellness activities.

      (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

      (c) The insurer shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (3).

      (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

       (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.

      (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

      (i) Changes to the enrollment of the small employer;

      (ii) Changes to the family composition of the employee;

      (iii) Changes to the health benefit plan requested by the small employer; or

      (iv) Changes in government requirements affecting the health benefit plan.

      (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

      (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. A carrier may develop its rates based on claims costs due to network provider reimbursement schedules or type of network. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

      (i) Adjusted community rates established under this section shall pool the medical experience of all small groups purchasing coverage, including the small group participants in the health insurance partnership established in RCW 70.47A.030. However, annual rate adjustments for each small group health benefit plan may vary by up to plus or minus four percentage points from the overall adjustment of a carrier's entire small group pool, such overall adjustment to be approved by the commissioner, upon a showing by the carrier, certified by a member of the American academy of actuaries that: (i) The variation is a result of deductible leverage, benefit design, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than four percentage points are subject to review by the commissioner, and must be approved or denied within sixty days of submittal. A variation that is not denied within sixty days shall be deemed approved. The commissioner must provide to the carrier a detailed actuarial justification for any denial within thirty days of the denial.

      (4) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

      (5)(a) Except as provided in this subsection, requirements used by an insurer in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

      (b) An insurer shall not require a minimum participation level greater than:

      (i) One hundred percent of eligible employees working for groups with three or less employees; and

      (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

      (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

      (d) An insurer may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

      (6) An insurer must offer coverage to all eligible employees of a small employer and their dependents. An insurer may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. An insurer may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

      (7) As used in this section, "health benefit plan," "small employer," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.

      Sec. 8. RCW 48.44.023 and 2004 c 244 s 7 are each amended to read as follows:

      (1)(a) A health care services contractor offering any health benefit plan to a small employer, either directly or through an association or member-governed group formed specifically for the purpose of purchasing health care, may offer and actively market to the small employer a health benefit plan featuring a limited schedule of covered health care services. Nothing in this subsection shall preclude a contractor from offering, or a small employer from purchasing, other health benefit plans that may have more comprehensive benefits than those included in the product offered under this subsection. A contractor offering a health benefit plan under this subsection shall clearly disclose all covered benefits to the small employer in a brochure filed with the commissioner.

      (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460.

      (2) Nothing in this section shall prohibit a health care service contractor from offering, or a purchaser from seeking, health benefit plans with benefits in excess of the health benefit plan offered under subsection (1) of this section. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

      (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

      (a) The contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

      (i) Geographic area;

      (ii) Family size;

      (iii) Age; and

      (iv) Wellness activities.

      (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

      (c) The contractor shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (3).

      (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

      (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.

      (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

      (i) Changes to the enrollment of the small employer;

      (ii) Changes to the family composition of the employee;

      (iii) Changes to the health benefit plan requested by the small employer; or

      (iv) Changes in government requirements affecting the health benefit plan.

      (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

      (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. A carrier may develop its rates based on claims costs due to network provider reimbursement schedules or type of network. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

      (i) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage, including the small group participants in the health insurance partnership established in RCW 70.47A.030. However, annual rate adjustments for each small group health benefit plan may vary by up to plus or minus four percentage points from the overall adjustment of a carrier's entire small group pool, such overall adjustment to be approved by the commissioner, upon a showing by the carrier, certified by a member of the American academy of actuaries that: (i) The variation is a result of deductible leverage, benefit design, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than four percentage points are subject to review by the commissioner, and must be approved or denied within sixty days of submittal. A variation that is not denied within sixty days shall be deemed approved. The commissioner must provide to the carrier a detailed actuarial justification for any denial within thirty days of the denial.

      (4) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

      (5)(a) Except as provided in this subsection, requirements used by a contractor in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

      (b) A contractor shall not require a minimum participation level greater than:

      (i) One hundred percent of eligible employees working for groups with three or less employees; and

      (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

      (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

      (d) A contractor may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

       (6) A contractor must offer coverage to all eligible employees of a small employer and their dependents. A contractor may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. A contractor may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

      Sec. 9. RCW 48.46.066 and 2004 c 244 s 9 are each amended to read as follows:

      (1)(a) A health maintenance organization offering any health benefit plan to a small employer, either directly or through an association or member-governed group formed specifically for the purpose of purchasing health care, may offer and actively market to the small employer a health benefit plan featuring a limited schedule of covered health care services. Nothing in this subsection shall preclude a health maintenance organization from offering, or a small employer from purchasing, other health benefit plans that may have more comprehensive benefits than those included in the product offered under this subsection. A health maintenance organization offering a health benefit plan under this subsection shall clearly disclose all the covered benefits to the small employer in a brochure filed with the commissioner.

      (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530.

      (2) Nothing in this section shall prohibit a health maintenance organization from offering, or a purchaser from seeking, health benefit plans with benefits in excess of the health benefit plan offered under subsection (1) of this section. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

       (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

      (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

      (i) Geographic area;

      (ii) Family size;

      (iii) Age; and

      (iv) Wellness activities.

      (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

      (c) The health maintenance organization shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (3).

      (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

      (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.

      (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

      (i) Changes to the enrollment of the small employer;

      (ii) Changes to the family composition of the employee;

      (iii) Changes to the health benefit plan requested by the small employer; or

      (iv) Changes in government requirements affecting the health benefit plan.

      (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

       (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. A carrier may develop its rates based on claims costs due to network provider reimbursement schedules or type of network. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

      (i) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage, including the small group participants in the health insurance partnership established in RCW 70.47A.030. However, annual rate adjustments for each small group health benefit plan may vary by up to plus or minus four percentage points from the overall adjustment of a carrier's entire small group pool, such overall adjustment to be approved by the commissioner, upon a showing by the carrier, certified by a member of the American academy of actuaries that: (i) The variation is a result of deductible leverage, benefit design, or provider network characteristics; and (ii) for a rate renewal period, the projected weighted average of all small group benefit plans will have a revenue neutral effect on the carrier's small group pool. Variations of greater than four percentage points are subject to review by the commissioner, and must be approved or denied within sixty days of submittal. A variation that is not denied within sixty days shall be deemed approved. The commissioner must provide to the carrier a detailed actuarial justification for any denial within thirty days of the denial.

      (4) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

      (5)(a) Except as provided in this subsection, requirements used by a health maintenance organization in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

      (b) A health maintenance organization shall not require a minimum participation level greater than:

       (i) One hundred percent of eligible employees working for groups with three or less employees; and

      (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

      (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

      (d) A health maintenance organization may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

      (6) A health maintenance organization must offer coverage to all eligible employees of a small employer and their dependents. A health maintenance organization may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. A health maintenance organization may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

      NEW SECTION. Sec. 10. On or before December 1, 2008, the health insurance partnership board shall submit a report to the governor and the legislature that includes an implementation plan to incorporate the individual and small group health insurance markets into the partnership program. In preparing the report, the board shall examine at least the following issues:

      (1) The impact of these markets being incorporated into the partnership, with respect to the utilization of services and cost of health plans offered through the partnership;

      (2) The impact of applying small group health benefit plan regulations on access to health services and the cost of coverage for these markets; and

      (3) How the composition of the board should be modified to reflect the incorporation of the individual and small group markets in the partnership.

      NEW SECTION. Sec. 11. On or before December 1, 2009, the health insurance partnership board shall submit a report and recommendations to the governor and the legislature regarding:

      (1) The risks and benefits of additional markets participating in the partnership:

      (a) The report shall examine the following markets:

      (i) Washington state health insurance pool under chapter 48.41 RCW;

      (ii) Basic health plan under chapter 70.47 RCW;

      (iii) Public employees' benefits board enrollees under chapter 41.05 RCW; and

      (iv) Public school employees; and

      (b) The report shall examine at least the following issues:

      (i) The impact of these markets participating in the partnership, with respect to the utilization of services and cost of health plans offered through the partnership;

      (ii) Whether any distinction should be made in participation between active and retired employees enrolled in public employees' benefits board plans, giving consideration to the implicit subsidy that nonmedicare-eligible retirees currently benefit from by being pooled with active employees, and how medicare-eligible retirees would be affected;

      (iii) The impact of applying small group health benefit plan regulations on access to health services and the cost of coverage for these markets; and

      (iv) If the board recommends the inclusion of additional markets, how the composition of the board should be modified to reflect the participation of these markets; and

      (2) The risks and benefits of establishing a requirement that residents of the state of Washington age eighteen and over obtain and maintain affordable creditable coverage, as defined in the federal health insurance portability and accountability act of 1996 (42 U.S.C. Sec. 300gg(c)). The report shall address the question of how a requirement that residents maintain coverage could be enforced in the state of Washington.

      Sec. 12. RCW 70.47A.050 and 2006 c 255 s 5 are each amended to read as follows:

      Enrollment in the ((small employer)) health insurance partnership ((program)) is not an entitlement and shall not result in expenditures that exceed the amount that has been appropriated for the program in the operating budget. If it appears that continued enrollment will result in expenditures exceeding the appropriated level for a particular fiscal year, the administrator may freeze new enrollment in the program and establish a waiting list of eligible employees who shall receive subsidies only when sufficient funds are available.

      Sec. 13. RCW 70.47A.060 and 2006 c 255 s 6 are each amended to read as follows:

      The administrator shall adopt all rules necessary for the implementation and operation of the ((small employer)) health insurance partnership ((program)). As part of the rule development process, the administrator shall consult with small employers, carriers, employee organizations, and the office of the insurance commissioner under Title 48 RCW to determine an effective and efficient method for the payment of subsidies under this chapter. All rules shall be adopted in accordance with chapter 34.05 RCW.

      Sec. 14. RCW 70.47A.080 and 2006 c 255 s 8 are each amended to read as follows:

      The ((small employer)) health insurance partnership ((program)) account is hereby established in the custody of the state treasurer. Any nongeneral fund--state funds collected for the ((small employer)) health insurance partnership ((program)) shall be deposited in the ((small employer)) health insurance partnership ((program)) account. Moneys in the account shall be used exclusively for the purposes of administering the ((small employer)) health insurance partnership ((program)), including payments to ((participating managed health care systems)) insurance carriers on behalf of ((small employer)) health insurance partnership enrollees. Only the administrator of the health care authority or his or her designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

      NEW SECTION. Sec. 15. (1) The office of the insurance commissioner shall contract for an independent study of health benefit mandates, rating requirements, and insurance statutes and rules to determine the impact on premiums and individuals' health if those statutes or rules were amended or repealed.

      (2) The office of the insurance commissioner shall submit an interim report to the governor and appropriate committees of the legislature by December 1, 2007, and a final report by December 1, 2008.

      NEW SECTION. Sec. 16. 2006 c 255 s 10 (uncodified) is repealed.

      NEW SECTION. Sec. 17. Sections 1 through 6 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect July 1, 2007.

      NEW SECTION. Sec. 18. If specific funding for the purposes of the following sections of this act, referencing the section of this act by bill or chapter number and section number, is not provided by June 30, 2007, in the omnibus appropriations act, the section is null and void:

      (1) Section 5 (health insurance partnership board);

      (2) Section 15 (office of insurance commissioner independent study)."

      On page 1, line 1 of the title, after "Relating to" strike the remainder of the title and insert "improving health insurance coverage by establishing a health insurance partnership for the purchase of small employer health insurance coverage, evaluating the inclusion of additional health insurance markets in the health insurance partnership, and studying the impact of health insurance mandates; amending RCW 70.47A.010, 70.47A.020, 70.47A.030, 70.47A.040, 48.21.045, 48.44.023, 48.46.066, 70.47A.050, 70.47A.060, and 70.47A.080; adding new sections to chapter 70.47A RCW; creating new sections; repealing 2006 c 255 s 10 (uncodified); providing an effective date; and declaring an emergency."

      The President declared the question before the Senate to be the motion by Senator Keiser to not adopt the committee striking amendment by the Committee on Ways & Means to Engrossed Second Substitute House Bill No. 1569.

      The motion by Senator Keiser carried and the committee striking amendment was not adopted by voice vote.

MOTION

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

      Strike everything after the enacting clause and insert the following:

      "Sec. 1. RCW 70.47A.010 and 2006 c 255 s 1 are each amended to read as follows:

      (1) The legislature finds that many small employers struggle with the cost of providing employer-sponsored health insurance coverage to their employees, while others are unable to offer employer-sponsored health insurance due to its high cost. Low-wage workers also struggle with the burden of paying their share of the costs of employer-sponsored health insurance, while others turn down their employer's offer of coverage due to its costs.

      (2) The legislature intends, through establishment of a ((small employer)) health insurance partnership program, to remove economic barriers to health insurance coverage for low-wage employees of small employers by building on the private sector health benefit plan system and encouraging employer and employee participation in employer-sponsored health benefit plan coverage.

      Sec. 2. RCW 70.47A.020 and 2006 c 255 s 2 are each amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Administrator" means the administrator of the Washington state health care authority, established under chapter 41.05 RCW.

      (2) "Board" means the health insurance partnership board established in section 4 of this act.

      (3) "Eligible ((employee)) partnership participant" means an individual who:

      (a) Is a resident of the state of Washington;

       (b) Has family income ((less than)) that does not exceed two hundred percent of the federal poverty level, as determined annually by the federal department of health and human services; and

      (c) Is employed by a participating small employer or is a former employee of a participating small employer who chooses to continue receiving coverage through the partnership following separation from employment.

      (((3))) (4) "Health benefit plan" has the same meaning as defined in RCW 48.43.005 ((or any plan provided by a self-funded multiple employer welfare arrangement as defined in RCW 48.125.010 or by another benefit arrangement defined in the federal employee retirement income security act of 1974, as amended)).

      (((4) "Program")) (5) "Participating small employer" means a small employer that employs at least one eligible partnership participant and has entered into an agreement with the partnership for the partnership to offer and administer the small employer's group health benefit plan, as defined in federal law, Sec. 706 of ERISA (29 U.S.C. Sec. 1167), for enrollees in the plan.

      (6) "Partnership" means the ((small employer)) health insurance partnership ((program)) established in RCW 70.47A.030.

      (((5))) (7) "Partnership participant" means an employee of a participating small employer, or a former employee of a participating small employer who chooses to continue receiving coverage through the partnership following separation from employment.

      (8) "Small employer" has the same meaning as defined in RCW 48.43.005.

      (((6))) (9) "Subsidy" or "premium subsidy" means payment or reimbursement to an eligible ((employee)) partnership participant toward the purchase of a health benefit plan, and may include a net billing arrangement with insurance carriers or a prospective or retrospective payment for health benefit plan premiums.

      Sec. 3. RCW 70.47A.030 and 2006 c 255 s 3 are each amended to read as follows:

(1) To the extent funding is appropriated in the operating budget for this purpose, the ((small employer)) health insurance partnership ((program)) is established. The administrator shall be responsible for the implementation and operation of the ((small employer)) health insurance partnership ((program)), directly or by contract. The administrator shall offer premium subsidies to eligible ((employees)) partnership participants under RCW 70.47A.040.

(2) Consistent with policies adopted by the board under section 4 of this act, the administrator shall, directly or by contract:

      (a) Establish and administer procedures for enrolling small employers in the partnership, including publicizing the existence of the partnership and disseminating information on enrollment, and establishing rules related to minimum participation of employees in small groups purchasing health insurance through the partnership. Opportunities to publicize the program for outreach and education of small employers on the value of insurance shall explore the use of online employer guides. As a condition of participating in the partnership, a small employer must agree to establish a cafeteria plan under section 125 of the federal internal revenue code that will enable employees to use pretax dollars to pay their share of their health benefit plan premium. The partnership shall provide technical assistance to small employers for this purpose;

      (b) Establish and administer procedures for health benefit plan enrollment by employees of small employers during open enrollment periods and outside of open enrollment periods upon the occurrence of any qualifying event specified in the federal health insurance portability and accountability act of 1996 or applicable state law. Neither the employer nor the partnership shall limit an employee's choice of coverage from among all the health benefit plans offered;

      (c) Establish and manage a system for the partnership to be designated as the sponsor or administrator of a participating small employer health benefit plan and to undertake the obligations required of a plan administrator under federal law;

      (d) Establish and manage a system of collecting and transmitting to the applicable carriers all premium payments or contributions made by or on behalf of partnership participants, including employer contributions, automatic payroll deductions for partnership participants, premium subsidy payments, and contributions from philanthropies;

      (e) Establish and manage a system for determining eligibility for and making premium subsidy payments under this act;

       (f) Establish a mechanism to apply a surcharge to all health benefit plans, which shall be used only to pay for administrative and operational expenses of the partnership. The surcharge must be applied uniformly to all health benefit plans offered through the partnership and must be included in the premium for each health benefit plan. Surcharges may not be used to pay any premium assistance payments under this chapter;

      (g) Design a schedule of premium subsidies that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members based on a benchmark health benefit plan designated by the board. The amount of an eligible partnership participant's premium subsidy shall be determined by applying a sliding scale subsidy schedule with the percentage of premium similar to that developed for subsidized basic health plan enrollees under RCW 70.47.060. The subsidy shall be applied to the employee's premium obligation for his or her health benefit plan, so that employees benefit financially from any employer contribution to the cost of their coverage through the partnership.

      (3) The administrator may enter into interdepartmental agreements with the office of the insurance commissioner, the department of social and health services, and any other state agencies necessary to implement this chapter.

      NEW SECTION. Sec. 4. A new section is added to chapter 70.47A RCW to read as follows:

      (1) The health insurance partnership board is hereby established. The governor shall appoint a nine-member board composed as follows:

      (a) Two representatives of small employers;

      (b) Two representatives of employees of small employers, one of whom shall represent low-wage employees;

      (c) Four employee health plan benefits specialists; and

      (d) The administrator.

      (2) The governor shall appoint the initial members of the board to staggered terms not to exceed four years. Initial appointments shall be made on or before June 1, 2007. Members appointed thereafter shall serve two-year terms. Members of the board shall be compensated in accordance with RCW 43.03.250 and shall be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060. The board shall prescribe rules for the conduct of its business. The administrator shall be the chair of the board. Meetings of the board shall be at the call of the chair.

      (3) The board may establish technical advisory committees or seek the advice of technical experts when necessary to execute the powers and duties included in this section.

      (4) The board and employees of the board shall not be civilly or criminally liable and shall not have any penalty or cause of action of any nature arise against them for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under this chapter. Nothing in this section prohibits legal actions against the board to enforce the board's statutory or contractual duties or obligations.

      NEW SECTION. Sec. 5. A new section is added to chapter 70.47A RCW to read as follows:

      (1) The health insurance partnership board shall:

      (a) Develop policies for enrollment of small employers in the partnership, including minimum participation rules for small employer groups. The small employer shall determine the criteria for eligibility and enrollment in his or her plan and the terms and amounts of the employer's contributions to that plan, consistent with any minimum employer premium contribution level established by the board under (d) of this subsection;

      (b) Designate health benefit plans that are currently offered in the small group market that will qualify for premium subsidy payments. At least four health benefit plans shall be chosen, with multiple deductible and point-of-service cost-sharing options. The health benefit plans shall range from catastrophic to comprehensive coverage, and one health benefit plan shall be a high deductible health plan. Every effort shall be made to include health benefit plans that include components to maximize the quality of care provided and result in improved health outcomes, such as preventive care, wellness incentives, chronic care management services, and provider network development and payment policies related to quality of care;

      (c) Approve a mid-range benefit plan from those selected to be used as a benchmark plan for calculating premium subsidies;

       (d) Determine whether there should be a minimum employer premium contribution on behalf of employees, and if so, how much;

      (e) Determine appropriate health benefit plan rating methodologies. The methodologies shall be based on the small group adjusted community rate as defined in Title 48 RCW. The board shall evaluate the impact of applying the small group community rating with the partnership principle of allowing each employee to choose their health benefit plan, and consider options to reduce uncertainty for carriers and provide for efficient risk management of high-cost enrollees through risk adjustment, reinsurance, or other mechanisms;

      (f) Conduct analyses and provide recommendations as requested by the legislature and the governor, with the assistance of staff from the health care authority and the office of the insurance commissioner.

      (2) The board may authorize one or more limited health care service plans for dental care services to be offered by limited health care service contractors under RCW 48.44.035. However, such plan shall not qualify for subsidy payments.

      (3) In fulfilling the requirements of this section, the board shall consult with small employers, the office of the insurance commissioner, members in good standing of the American academy of actuaries, health carriers, agents and brokers, and employees of small business.

      Sec. 6. RCW 70.47A.040 and 2006 c 255 s 4 are each amended to read as follows:

      (((1))) Beginning ((July 1, 2007)) September 1, 2008, the administrator shall accept applications from eligible ((employees)) partnership participants, on behalf of themselves, their spouses, and their dependent children, to receive premium subsidies through the ((small employer)) health insurance partnership ((program)).

      (((2) Premium subsidy payments may be provided to eligible employees if:

      (a) The eligible employee is employed by a small employer;

      (b) The actuarial value of the health benefit plan offered by the small employer is at least equivalent to that of the basic health plan benefit offered under chapter 70.47 RCW. The office of the insurance commissioner under Title 48 RCW shall certify those small employer health benefit plans that are at least actuarially equivalent to the basic health plan benefit; and

       (c) The small employer will pay at least forty percent of the monthly premium cost for health benefit plan coverage of the eligible employee.

      (3) The amount of an eligible employee's premium subsidy shall be determined by applying the sliding scale subsidy schedule developed for subsidized basic health plan enrollees under RCW 70.47.060 to the employee's premium obligation for his or her employer's health benefit plan.

      (4) After an eligible individual has enrolled in the program, the program shall issue subsidies in an amount determined pursuant to subsection (3) of this section to either the eligible employee or to the carrier designated by the eligible employee.

      (5) An eligible employee must agree to provide verification of continued enrollment in his or her small employer's health benefit plan on a semiannual basis or to notify the administrator whenever his or her enrollment status changes, whichever is earlier. Verification or notification may be made directly by the employee, or through his or her employer or the carrier providing the small employer health benefit plan. When necessary, the administrator has the authority to perform retrospective audits on premium subsidy accounts. The administrator may suspend or terminate an employee's participation in the program and seek repayment of any subsidy amounts paid due to the omission or misrepresentation of an applicant or enrolled employee. 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.))

      Sec. 7. RCW 48.21.045 and 2004 c 244 s 1 are each amended to read as follows:

      (1)(a) An insurer offering any health benefit plan to a small employer, either directly or through an association or member-governed group formed specifically for the purpose of purchasing health care, may offer and actively market to the small employer a health benefit plan featuring a limited schedule of covered health care services. Nothing in this subsection shall preclude an insurer from offering, or a small employer from purchasing, other health benefit plans that may have more comprehensive benefits than those included in the product offered under this subsection. An insurer offering a health benefit plan under this subsection shall clearly disclose all covered benefits to the small employer in a brochure filed with the commissioner.

      (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.21.130, 48.21.140, 48.21.141, 48.21.142, 48.21.144, 48.21.146, 48.21.160 through 48.21.197, 48.21.200, 48.21.220, 48.21.225, 48.21.230, 48.21.235, 48.21.240, 48.21.244, 48.21.250, 48.21.300, 48.21.310, or 48.21.320.

      (2) Nothing in this section shall prohibit an insurer from offering, or a purchaser from seeking, health benefit plans with benefits in excess of the health benefit plan offered under subsection (1) of this section. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

      (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

      (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

      (i) Geographic area;

      (ii) Family size;

      (iii) Age; and

      (iv) Wellness activities.

      (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.