AN ACT Relating to local government tort liability; adding new sections to chapter 4.96 RCW; and repealing RCW 4.96.010.

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

NEW SECTION. Sec. 1. The governing body of any unit of local government may create an accident or tort liability fund, as provided in section 2 of this act, upon which warrants may be drawn for the full amount of any judgment, including interest and costs, against the local government or its officers and employees on account of personal injuries, property damage, or death suffered by any person as a result of any tortious acts of the local government or its officers or employees acting within the scope of their authority.

As used in this section, the term "local government" means any county, city, town, special district, municipal corporation, or quasi-municipal corporation.

NEW SECTION. Sec. 2. The accident or tort liability fund shall be a cumulative reserve fund, subject to RCW 35.21.070. This fund shall supplement liability insurance where insurance does not cover or is insufficient to cover judgments, and, except for insurance coverage, shall be the exclusive fund from which payments are made on judgments resulting from the tortious acts of the local government, or its officers or employees acting within the scope of their authority.

The initial appropriation of moneys into the tort liability fund, for a local government that has not previously created and placed money into such a fund, shall be at least equal to twice the premium amount for any tort liability insurance policy carried by the local government for the period next preceding the creation of the fund, or two dollars for each person residing within the local government's boundaries, whichever is greater. Once an accident or tort liability fund has been created, the subsequent annual appropriations for the fund shall be sufficient to maintain the fund at a minimum of the previous year's level, except as provided in section 3 of this act.

NEW SECTION. Sec. 3. In the event a final judgment is duly presented to the local government for payment which exceeds moneys available in the accident or tort liability fund, the finance officer or treasurer of the local government shall file a report on the financial status of the accident or tort liability fund. This report shall list all warrants issued from the fund in the current calendar year and the projected balance to the end of the next succeeding calendar year, including interest due on any settled claims or judgments. All further execution, collection, mandamus, or other proceedings on the judgment against the municipality, or personally against its officers and employees, shall be stayed upon the filing of the treasurer's report. Within thirty days from filing of this financial report, the governing body of the local government shall adopt a payment plan to satisfy the judgment. The payment plan shall include a financial background report of the local government, including a description of its assets, liabilities, and projected revenues, and a payment schedule for paying the judgment and interest on the delayed judgment payments.

Following the adoption of the payment plan for any judgment, any affected party may move for a judicial order approving this payment plan which shall require that the local government include amounts required to be paid under the payment schedule in future appropriations to the accident or tort liability fund. The order shall be entered if the court finds that the plan provides adequate compensation for the needs of the party in whose favor the judgment was made, taking into consideration other available resources to this party, while providing for the current and future financial integrity of the local government and its ability to maintain public service levels and facilities during the payment period. Entry of the order shall bar further proceedings for collection of the judgment against either the local government or its officers and employees. However, either party may move to modify the order upon a showing of changed conditions.

NEW SECTION. Sec. 4. The payment plan provided for in section 3 of this act may allow payments on judgments, including interest for delayed judgment payments, over a period of years as follows: (1) Not more than three years where the judgment amount is three hundred thousand dollars or less; (2) not more than six years, where the judgment amount is more than three hundred thousand dollars but less than six hundred thousand dollars; (3) not more than ten years, where the judgment amount is six hundred thousand dollars or more, but less than one million dollars; and (4) not more then twenty years, where the judgment amount is one million dollars or more. The interest rate payable on the declining principal payment balance shall be equal to ten percent per annum.

NEW SECTION. Sec. 5. Subject to express statutory and inherent spheres of immunity, and as limited by the use of an accident or tort liability fund as provided in sections 2, 3, and 4 of this act, all local governments of the state, whether acting in a governmental or proprietary capacity, shall be liable for damages arising out of their tortious conduct, or the tortious conduct of their officers, agents, or employees to the same extent as if they were a private person or corporation: PROVIDED, That the filing within the time allowed by law of any claim required shall be a condition precedent to the maintaining of any action. The laws specifying the content for such claims shall be liberally construed so that substantial compliance therewith will be deemed satisfactory.

NEW SECTION. Sec. 6. Sections 1 through 5 of this act are each added to chapter 4.96 RCW.

NEW SECTION. Sec. 7. Section 1, chapter 164, Laws of 1967 and RCW 4.96.010 are each repealed.

NEW SECTION. Sec. 8. 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.