BILL REQ. #:  H-0753.4 

Read first time 02/03/09.   Referred to Committee on Transportation.

     AN ACT Relating to the regulation and preservation of urban streets through a local option street utility; amending RCW 82.80.070; adding a new chapter to Title 35 RCW; creating a new section; repealing RCW 82.80.040, 82.80.050, and 82.80.060; and providing an effective date.

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

NEW SECTION.  Sec. 1   FINDINGS--PURPOSE. The legislature finds that:
     (1) The construction, maintenance, and preservation of the streets and the provision of street utility service in urban areas is essential for the protection and convenience of users receiving the service. Inadequate and poorly maintained streets and poor street utility service adversely affect the health, safety, and welfare of the lives and property of residents and the success of businesses located in these areas. Harmful impacts include slowing traffic, decreased vehicle fuel efficiency, and a consequent severe adverse impact on air quality. Further adverse impacts are traffic congestion, vehicle damage, increased accident frequency and more serious accidents, and decreased access to needed services and businesses.
     (2) Residents and businesses in areas with poorly maintained streets and poor street utility service have slowed and decreased access to service and delivery vehicle support, including decreased access to public transportation and taxi service, the delivery of goods and services, and slower fire, police, and emergency medical vehicle services.
     (3) Poor street utility service in urban areas accelerates deterioration of private vehicles, increases traffic volumes, and exacerbates peak flow traffic problems.
     (4) The benefits for city residents and businesses in areas with well-constructed and maintained streets and good street utility service are the opposite of the burdens, and include improved air quality, fuel efficiency, travel speed, travel safety, reduction of damage and deterioration of vehicles, lower insurance rates, and better public transportation, fire, police, and emergency medical vehicle access.
     (5) Access to and use of the street system and street utility service is necessary for the use of all developed real property.
     (6) Construction, maintenance, repair, and preservation of the streets and other street utility service in urban areas has traditionally been funded by general taxes without regard to the burdens placed upon streets by different classes of users or the respective benefits derived by them.
     (7) Objective means are available to assess pavement conditions to identify distressed areas of the streets in cities.
     (8) Objective measures are available to assess the relative burdens placed upon streets and street utility service users in urban areas by different classes of users and the respective benefits derived by them.
     (9) Maintenance and preservation of streets and street utility service in urban areas should be funded by rates charged to users of the streets consistent with the burden placed on the streets by various classes of users and the respective benefits derived by them as utility supported users of the street system.
     (10) A street utility is a more equitable and efficient means to monitor, regulate, and maintain the streets and to provide street utility service than general tax funding.
     (11) Since 1980, vehicle registration has increased by sixty percent and vehicle miles traveled on municipal streets have increased far in excess of the rate of population growth.
     (12) Pavement surfaces in urban areas are subjected to much heavier use and have much higher maintenance needs than pavement in rural areas. When pavement is not properly maintained, the pavement deterioration process, amount of work to restore the pavement, and costs of restoration all accelerate exponentially. This creates a downward spiral of increasing pavement deterioration and higher costs to remediate the problem.
     (13) The institute of transportation engineers is an international educational and scientific professional association. It has developed reports, which fairly measure the relative benefits of streets to different classes of property use. The institute of transportation engineers reports provide a reasonable basis to apportion a part of the costs of street utility service.
     (14) A street utility created and governed by the legislative authority of a city consistent with the requirements of this chapter provides an appropriate and efficient means to monitor, regulate, and maintain public streets.
     (15) The preservation of streets through a utility service program will directly serve and benefit those who pay street utility rates by allocating street utility rates to those who place servicing burdens within the street utility service area.
     (16) The purpose of this chapter is to authorize the creation of a street utility by cities to serve the residents and businesses in utility areas through the preservation and maintenance of streets for areas with an identified street utility service. Street utility rates are determined in proportion to the levels of use of different classes of residents and businesses who depend upon access to and use of the street system and burdens placed upon the streets by different classes of residential and business users.

NEW SECTION.  Sec. 2   DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "City" means an incorporated city or town.
     (2) "Sound engineering principles" means principles or learning reasonably accepted within the civil engineering or traffic engineering profession, including the department of transportation extended method in paving distress ratings, the department of transportation pavement distress manual, the department of transportation local agency pavement management guide, materials developed by the institute of transportation engineers, including manuals or materials differentiating types of property uses and correlating property use and the expected number of annual automobile and pedestrian trips generated by these uses, and other studies, manuals, or materials that are reliable and based on sound engineering practice as may be developed by professional engineering staff or consultants.
     (3) "Street" means a city's public right-of-way within the outer boundaries of areas used for pedestrian, bicycle, or motor vehicle traffic. "Street" includes bridges, gutters, curbs, and sidewalks, including those that have barrier-free design features and are wheelchair and stroller accessible.
     (4) "Street utility" means a municipal utility providing street utility services in accordance with this chapter.
     (5) "Street utility rates" means street utility user charges authorized under this chapter for street utility services.
     (6) "Street utility service" means actions by a city established street utility to design, condemn, construct, own, manage, maintain, operate, and preserve all or any described portion of its roads, streets, sidewalks, and other transportation improvements as a separate enterprise and facility. These improvements may include traffic control devices, sidewalks, curbs, gutters, parking facilities, and drainage facilities. Street utility activities may further be identified by ordinance consistent with these purposes. Street utility services may also include (a) repayment of revenue or general obligation bonds repayable from charges listed in section 5 of this act issued in accordance with chapter 35.41, 35.92, or 39.46 RCW, or (b) other evidences of indebtedness issued to pay costs for which street utility service revenues may be used.
     (7) "Street utility service area" means an area in which street utility services are provided and street utility rates are charged, as established under this chapter.

NEW SECTION.  Sec. 3   LEGISLATIVE AUTHORITY ACTION. Subject to section 4 of this act, the legislative authority of a city may establish a street utility to provide street utility service, with the authority to own and operate the street utility. The legislative authority of the city is the governing body of the street utility. The legislative authority of the city may not assess a street utility user rate outside its jurisdictional limits.

NEW SECTION.  Sec. 4   FORMATION PROCESS. (1) The legislative authority of a city shall conduct a public hearing prior to the formation of a street utility. Notice of the hearing must include an explanation of the proposal and the proposed street utility service areas. The notice may include a description of the condition of the pavement areas for the proposed street utility service area, summaries of pertinent studies, field investigations, and pavement condition scores, including areas classified, or at risk to be classified, for no further maintenance without street utility support. The notice must include a general proposed plan for street utility service to be carried out with street utility rates, a summary of the proposed street utility rates, a description of the proposed area or areas for utility service, and any other pertinent information. The notice must be published once a week for two consecutive weeks in a newspaper of general circulation within the proposed street utility service area. Alternatively, there may be one publication, combined with the presentation of the notice information on a government cable television channel at least ten times in the two-week period and prominently posting the required information on a municipal web site.
     (2) At the hearing, the city's legislative authority shall review the proposal and consider comments from any interested party and may modify the proposal in response to those comments, as well as any information, opinion polls, or other material relevant to the question presented. The hearing may be continued from time to time.
     (3) Upon the conclusion of the hearing, the city's legislative authority may adopt an ordinance creating a street utility service area or areas, together with the street utility rates to support the utility, which must be supported by an evidentiary record with findings in accordance with this section and consistent with the findings and purposes of this chapter.
     (4)(a) The street utility ordinance must include:
     (i) A finding that the creation of a street utility is in the interest of the public health and safety as supported by findings from the hearing and any other basis;
     (ii) A finding that the street utility will allocate the burdens placed on the streets by various classes of users and benefit the various classes of users;
     (iii) A description of the street utility service area and user rate schedule consistent with section 5 of this act setting forth the amounts to be charged to residential and business street users located in the street utility service area; and
     (iv) A provision that a street utility advisory committee may be established to advise the city from time to time regarding the street utility. If established, the street utility advisory committee must be appointed by the mayor or mayor's designee and confirmed by the city's legislative authority. Committee membership may not exceed seven members, a majority of which must be city residents. Committee membership may include paving contractors, civil engineers, professional traffic engineering staff, and other persons with special training or expertise relevant to the issues presented. Members must serve without compensation, but approved committee expenses and staff support must be provided by the city.
     (b) The street utility ordinance may include a description or summary of the condition of the pavement in the street utility service area, based on field investigations, pavement condition scores, or other information. The description or summary may include a proposed timetable for street utility services, summary of the services, budget, including projected revenues from street utility rates or other sources, and any other factors deemed relevant.

NEW SECTION.  Sec. 5   RATES. (1)(a) If a street utility is established, street utility rates may be established by ordinance not inconsistent with this section.
     (b) Street utility rates only apply to residents and businesses located in the street utility service area or areas. Rates may be expressed as a designated dollar amount per trip generated, type of household unit, or type of business. Rates may be collected no more frequently than monthly and no less frequently than annually. Rates set for users other than households may be expressed in equivalents of household units or as specified by ordinance.
     (2) In establishing street utility rates, the following factors may be considered:
     (a) A cost component for the street utility's ongoing base level operations and variations in capacity access demands; and the estimated number of vehicle trips generated by specific types of property occupancies or uses. The correlation between property uses and the estimated number of automobile trips from these uses may be considered. The ordinance must consider the institute of transportation engineers manual or other resources of comparable acceptance or reliability.
     (b) User location; differences in costs of service to different user classes; user proximity to arterial streets; differences in costs or character of the service to users; times of use; number, type, and weight of vehicles associated with household units or businesses; differences in the cost of maintenance, operation, repair, and replacement of various parts of the street system, by capital contributions made to the system including, but not limited to, assessments, achievement of traffic reduction, and air quality improvement goals; capital contributions made to the system including, but not limited to, assessments; special assessments, such as limited improvement districts, for streets and street-related improvements; and any other matters that present a reasonable difference as a basis for distinction. For undeveloped property, a trip rate or fee component may not be assessed and only that base rate portion reasonably attributed to the benefit received or burden created by the undeveloped property on the services provided by the street utility may be charged. Street utility rates must not include an exemption or credit for the payment of any tax.
     (c) Any other matters that present a reasonable difference as a grounds for distinction of relative costs and benefits among classes of users.
     (3)(a) A city may reduce or exempt rates on residential properties to the extent of their occupancy by low-income senior citizens and other low-income citizens as provided in RCW 74.38.070, or to the extent of their occupancy by the needy or infirm, as these terms are defined by the city in the street utility ordinance.
     (b) A city may reduce or exempt rates on other governmental entities to the extent such governmental entities are providing for streets, street-related improvements, and street utility services.
     (4) If feasible, the ordinance must provide for mitigation for incidental trips that are often combined with other trips, as compared to destination trips that are associated with creating separate trip burdens on the streets.
     (5) The ordinance may provide for user rate reduction:
     (a) Based on mitigation through impact fees or other mitigation fees paid for the same improvements as the street authority; or
     (b) If there is a showing of trip reduction, including reductions for residential users participating in regular carpool or vanpool arrangements or for commercial users offering carpool, vanpool, public transit passes, or a trip reduction program approved under provisions as established by ordinance.
     (6) Street utility rates must be uniform for the same class of persons receiving services provided or imposing burdens on a transportation system. Street utility rates collected by a street utility must not be established in excess of the amount authorized by the ordinance. Street utility rates may not be collected from vacant parcels not developed for occupancy or use.
     (7) Street utility rates may supplement but may not duplicate or replace transportation impact fees authorized under growth management laws designed to pay for increasing the capacity of the street system to accommodate the needs for new growth and development rather than street maintenance or remediation of existing deficiencies in the street system.
     (8) A city may provide or contract to provide billing and collection services of the street utility rates as a part of or separate from other utility services provided. The ordinance may use the connection or consumption of other utility services as a basis to establish occupancy or use.
     (9) Street utility rates may not be computed based on the ad valorem value of the underlying real property or its improvements.
     (10) The rates established under this section are not intended to be regarded as tolls, but to the extent that the rates may be determined to be tolls by a court of competent jurisdiction, legislative approval is granted consistent with the requirements of this chapter.
     (11) Street utility rates established under this section do not constitute taxes or fees as provided under RCW 82.02.050 through 82.02.090 or chapter 39.92 RCW. A street utility may be funded by rates or any other lawful revenue source.

NEW SECTION.  Sec. 6   CITIZEN'S APPEAL BOARD. (1) The street utility ordinance under section 5 of this act must include provision for a user to appeal a rate or rate classification upon a showing that the user does not generate equivalent trips, on the average, to other parcels in the same rate class or another good cause. The appeal may also request a review of whether the base rate is adequate to cover ongoing base level operations and variations in capacity access demands or other base rate items allocated to the base rate for a given class of customers. Refunds on collected rates are not required for any period before the time a written appeal is received under procedures established by ordinance. A reasonable charge, not to exceed actual cost of the appeal, may be required to be paid by an appealing ratepayer.
     (2) Ratepayer appeals must be considered by a three-member citizen's appeal board appointed by the chief executive of the city with the approval of the legislative authority. Members serve staggered three-year terms. For the first terms, one member serves one year, one member serves two years, and one member serves three years, and thereafter, the terms are three years. Board members are not subject to removal except for misfeasance or malfeasance in office. Board members serve without compensation, except reasonable staff support is provided for their administrative needs.
     (3) The jurisdiction of the citizen's appeal board extends to appeals about rate classifications or rates charged to an individual user. Questions within the board's jurisdiction include whether a rate or rate computation is consistent with state law and the authorizing street utility ordinance. The board may also consider whether any given class or classes of ratepayers are unfairly burdened with street utility rates compared to another class or classes of ratepayers. A class or classes of ratepayers shall not subsidize or support any other class or classes of ratepayers and each class shall bear its own fair pro rata share of street utility expenses.
     (4) The board's jurisdiction does not extend to any other aspects of street utility operation, enforcement of the street utility ordinance, or any management or control of the city's streets. Appeals from decisions of the board acting within its jurisdictional duties must be directly made to the superior court. Additional provisions that govern appeals under this section must be provided by ordinance.

NEW SECTION.  Sec. 7   RATE COLLECTION. (1) A street utility ordinance may include provision of a penalty for rates sixty days past due, but not to exceed one percent per month thereafter on the unpaid balance. All unpaid street utility rates may be collected against the owner, tenant, or occupant in any manner as provided by law, but for a tenant or occupant, rates collected may not be outside the period of tenancy or occupancy.
     (2) As a supplemental remedy, a street utility ordinance may: (a) Provide that any unpaid rates and applicable penalties are a lien against the real property for which the street utility services were provided, which amounts may be foreclosed in the manner of a lien for labor and materials furnished on the subject premises. A lien may not exceed twelve months of unpaid rates, plus any applicable penalties; or (b) provide that unpaid street utility rates are a lien against the property to which the rates are provided, which may be enforced in the same manner as rates and charges for the use of systems of sewerage under chapter 35.67 RCW.

NEW SECTION.  Sec. 8   USE OF REVENUES. (1) All street utility rate revenues must be deposited in a special fund or account dedicated to permissible street utility service and must be used for those purposes only.
     (2) Permitted purposes include any identified street utility service.

NEW SECTION.  Sec. 9   DISSOLUTION. The legislative authority of a city may dissolve a street utility by ordinance upon a finding that the dissolution is in the public interest, but any unexpended funds must be held in trust to be expended for only those permissible purposes as provided in section 8 of this act.

NEW SECTION.  Sec. 10   OTHER RESOURCES. A city electing to establish a street utility under this chapter may use any other resources for street utility service otherwise permitted by law, consistent with any limitations on the service.

NEW SECTION.  Sec. 11   SCOPE. (1) This chapter or any action taken under its authority does not diminish any other general or specific municipal regulatory or funding powers otherwise permitted by law.
     (2) This chapter is not intended to create or enhance any duty upon any city with respect to the maintenance and preservation of its streets beyond that which now exists under the general law.

NEW SECTION.  Sec. 12   SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 13   REPEALER. The following acts or parts of acts are each repealed:
     (1) RCW 82.80.040 (Street utility -- Establishment) and 1991 c 141 s 1;
     (2) RCW 82.80.050 (Street utility -- Charges, credits) and 2006 c 301 s 5, 2000 c 103 s 21, & 1991 c 141 s 2; and
     (3) RCW 82.80.060 (Use of other proceeds by utility) and 1991 c 141 s 3.

Sec. 14   RCW 82.80.070 and 2005 c 319 s 139 are each amended to read as follows:
     (1) The proceeds collected pursuant to the exercise of the local option authority of RCW 82.80.010((,)) and 82.80.030((, and 82.80.050)) (hereafter called "local option transportation revenues") shall be used for transportation purposes only, including but not limited to the following: The operation and preservation of roads, streets, and other transportation improvements; new construction, reconstruction, and expansion of city streets, county roads, and state highways and other transportation improvements; development and implementation of public transportation and high capacity transit improvements and programs; and planning, design, and acquisition of right-of-way and sites for such transportation purposes. The proceeds collected from excise taxes on the sale, distribution, or use of motor vehicle fuel and special fuel under RCW 82.80.010 shall be used exclusively for "highway purposes" as that term is construed in Article II, section 40 of the state Constitution.
     (2) The local option transportation revenues shall be expended for transportation uses consistent with the adopted transportation and land use plans of the jurisdiction expending the funds and consistent with any applicable and adopted regional transportation plan for metropolitan planning areas.
     (3) Each local government with a population greater than eight thousand that levies or expends local option transportation funds, is also required to develop and adopt a specific transportation program that contains the following elements:
     (a) The program shall identify the geographic boundaries of the entire area or areas within which local option transportation revenues will be levied and expended.
     (b) The program shall be based on an adopted transportation plan for the geographic areas covered and shall identify the proposed operation and construction of transportation improvements and services in the designated plan area intended to be funded in whole or in part by local option transportation revenues and shall identify the annual costs applicable to the program.
     (c) The program shall indicate how the local transportation plan is coordinated with applicable transportation plans for the region and for adjacent jurisdictions.
     (d) The program shall include at least a six-year funding plan, updated annually, identifying the specific public and private sources and amounts of revenue necessary to fund the program. The program shall include a proposed schedule for construction of projects and expenditure of revenues. The funding plan shall consider the additional local tax revenue estimated to be generated by new development within the plan area if all or a portion of the additional revenue is proposed to be earmarked as future appropriations for transportation improvements in the program.
     (4) Local governments with a population greater than eight thousand exercising the authority for local option transportation funds shall periodically review and update their transportation program to ensure that it is consistent with applicable local and regional transportation and land use plans and within the means of estimated public and private revenue available.
     (5) In the case of expenditure for new or expanded transportation facilities, improvements, and services, priorities in the use of local option transportation revenues shall be identified in the transportation program and expenditures shall be made based upon the following criteria, which are stated in descending order of weight to be attributed:
     (a) First, the project serves a multijurisdictional function;
     (b) Second, it is necessitated by existing or reasonably foreseeable congestion;
     (c) Third, it has the greatest person-carrying capacity;
     (d) Fourth, it is partially funded by other government funds, such as from the state transportation improvement board, or by private sector contributions, such as those from the local transportation act, chapter 39.92 RCW; and
     (e) Fifth, it meets such other criteria as the local government determines is appropriate.
     (6) It is the intent of the legislature that as a condition of levying, receiving, and expending local option transportation revenues, no local government agency use the revenues to replace, divert, or loan any revenues currently being used for transportation purposes to nontransportation purposes.
     (7) Local governments are encouraged to enter into interlocal agreements to jointly develop and adopt with other local governments the transportation programs required by this section for the purpose of accomplishing regional transportation planning and development.
     (8) Local governments may use all or a part of the local option transportation revenues for the amortization of local government general obligation and revenue bonds issued for transportation purposes consistent with the requirements of this section.
     (9) Subsections (1) through (8) of this section do not apply to a regional transportation investment district imposing a tax or fee under the local option authority of this chapter. Proceeds collected under the exercise of local option authority under this chapter by a district must be used in accordance with chapter 36.120 RCW.

NEW SECTION.  Sec. 15   Captions used in this act are not any part of the law.

NEW SECTION.  Sec. 16   Sections 1 through 12 of this act constitute a new chapter in Title 35 RCW.

NEW SECTION.  Sec. 17   This act takes effect August 1, 2009.