Background: A fire protection district (district) is created to provide fire prevention, fire suppression, and emergency medical services within a district's boundaries. A district is governed by a board of commissioners consisting of either three or five members. The district finances their activities and facilities by imposing regular property taxes, excess voter-approved property tax levies, and benefit charges. Generally, a district serves residents outside of cities or towns, except when cities and towns have been annexed into a district or when the district continues to provide service to a newly incorporated area.

A city or town adjacent to a district may be annexed to such a district provided the population of the city or town does not exceed 100,000. Such annexation is initiated through the adoption of an ordinance by the legislative authority of the city, or town approving annexation into the district, and stating a finding that the public interest is served by such annexation. The annexation must then be authorized through the concurrence of the district's board of fire commissioners. Following such approval of the annexation, notification must be sent to the governing body of the county or counties in which both the district and city/town are located. The pertinent county legislative authorities must then call a special election in the city or town to be annexed, as well as the district, so as to allow the voters in each jurisdiction to determine the annexation issue. The annexation is complete if a majority of voters in each jurisdiction vote in favor of annexation.

A city or town located in two counties that have at least 80 percent of the population residing in one county may annex to a fire protection district if, at the time of the initiation of annexation, the proposed area lies adjacent to a fire protection district and the population of the proposed area is greater than 5,000 but less than 10,000. The governing bodies of the city and the district, as well as the qualified voters within the boundaries of the fire protection district, must approve of the annexation prior to its existence.

In accordance with specified limitations, both the district and the city are authorized to levy taxes related to district fire protection services.

Summary of Bill: If a city, partial city, or town that has existing debt for fire protection related capital improvements is annexing into a fire protection district that also has existing debt for fire protection related capital improvements, the annual tax levies, with respect to the fire protection district's existing debt, may be collected within the boundaries of the fire protection district as those boundaries existed prior to annexation and the city, partial city, or town's existing debt may be collected within the areas of the city that are later annexed to the fire protection district.

The commissioners of the fire protection district may determine whether or not any bond levies for the original fire district will be imposed on the property owners within the city being annexed, and must make that determination prior to transmitting the issue of annexation to the legislative authority or authorities of counties in which the city, partial city, or town and the district are situated. The legislative authority of a city or town may initiate annexation by the adoption of an ordinance stating an intent to join the fire protection district that specifies how the preexisting indebtedness of both the district and the proposed annexation area will be allocated in the tax levy process.

Staff Summary of Public Testimony: PRO: This bill is urgent. The City of Lacey and Fire District No. 3 plan to annex at the April election. Lacey contracts with Fire District No. 3 for fire protection services within the city. In 2002, Lacey and the Fire District both passed bond measures. The City has an interest in the equipment used by the Fire District. This bill is designed to address the issue of the debt that the city has for capital improvements for fire protection services and the debt that the fire district has for capital improvements for fire protection services. In annexations under current law, the debt of the district is uniformly spread over the entire district, including the annexed area. This problem could negatively impact the election. This bill corrects the problem and allows fire districts to determine whether to spread the debt to the annexed area or to have the city debt remain with the city residents and the fire district debt remain with the district residents.