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                                          ENGROSSED SENATE BILL NO. 4564

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State of Washington                              49th Legislature                              1986 Regular Session

 

By Senators Vognild, Newhouse, Bottiger, McManus, Conner, DeJarnatt, Granlund, Moore, Bauer, Goltz, Rasmussen, Wojahn and Zimmerman

 

 

Read first time 1/15/86 and referred to Committee on Governmental Operations.

 

 


AN ACT Relating to the establishment of accident and tort liability funds by municipal corporations and political subdivisions; and adding new sections to chapter 4.96 RCW.

 

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

 

          NEW SECTION.  Sec. 1.     In addition to, in combination with, or in lieu of liability insurance, every county, city, school district, special purpose district, or other municipal corporation or political subdivision of the state of Washington may create an accident or tort liability fund upon which the treasurer shall draw warrants for the full amount of any settled claim or judgment, including interest and costs, against the municipality 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 municipality.  The fund shall supplement liability insurance where insurance does not cover or is insufficient to cover settled claims and judgments.  The fund shall be the exclusive fund for the payment of settled claims or judgments resulting from tortious acts of said municipality, its officers and employees, or both, when acting within the scope of their authority.  Municipalities shall establish annual appropriations for these funds as provided in section 2 of this act.  For purposes of this section and sections 2 and 3 of this act, "municipality" includes but is not limited to counties, cities, school districts, and special purpose districts.

 

          NEW SECTION.  Sec. 2.     For any municipality that has not created an accident or tort liability fund before the effective date of this act, such a fund may be created as a cumulative reserve fund under RCW 35.21.070, by an initial appropriation of an amount no less than two times the premium amount for any tort liability insurance policy carried by the municipality for the period next preceding the creation of the fund, or an assessment of two dollars per capita.  For any municipality that has created an accident or tort liability fund, annual budget appropriations for the fund shall be sufficient to increase the fund balance to at least three times the original balance at the end of five years, unless a judgment should exceed funds available in the fund.  If a judgment should exceed funds available in the fund, the municipality shall have five years from the date of the entry of the judgment and interest payment plan, as provided in section 3 of this act, to increase the fund balance to at least three times the original balance of the fund, or three times the greatest level of the fund prior to entry of the judgment and interest payment plan, whichever is greater.  Each annual budget appropriation for the fund shall be sufficient, in any case, 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 presented for payment that exceeds funds available in the accident or tort liability fund, the municipal treasurer shall file a treasurer's report of tort fund in the action in which the judgment has been rendered.  The treasurer's report shall recite all warrants issued from the fund in the current fiscal year and the projected balance to June of the next preceding fiscal year, including interest on the subject judgment.  The filing of the treasurer's report shall stay all further execution, collection, mandamus, or other proceedings on the judgment against the municipality or its officers and employees.  Within thirty days from the filing of the treasurer's report, the governing body of the municipality shall approve a judgment and interest payment plan to satisfy the judgment.  The plan shall be filed on or before the thirty-first day after the treasurer's report is filed.  The plan shall include:

          (1) Financial background, such as:

          (a) Tort liability funding for the current fiscal year and the next fiscal year as required in (b) of this subsection including judgment and interest thereon;

          (b) Budget appropriations and revenue levels for the current year and any anticipated changes in the next succeeding year;

          (c) Any general fund reserves;

          (d) Any general fund real and personal property that may be surplus to current needs;

          (e) Any unlevied revenue sources, such as utility taxes, business and occupation taxes, sales taxes, and real property taxes;

          (f) General obligation indebtedness;

          (g) Other bonded indebtedness; and

          (h) Other information related to the financial condition of the municipality; and

          (2) A judgment and interest payment schedule in accordance with the following:

!tm1,1,1 !tcJudgment!tj1!tcPayment!sc ,1schedule

!tp1,1,1          (a) $100,000 to $300,000!tj1!tlNot!sc ,1more!sc ,1than!sc ,1three!sc ,1years

          (b) $300,001 to $600,000!tj1!tlNot!sc ,1more!sc ,1than!sc ,1six!sc ,1years

          (c) $600,001 to $1,000,000!tj1!tlNot!sc ,1more!sc ,1than!sc ,1ten!sc ,1years

          (d) $1,000,001 to $2,000,000!tj1!tlNot!sc ,1more!sc ,1than!sc ,1twenty!sc ,1years

          (e) No judgment and interest payment schedule may exceed twenty-five years; and

          (3) Such other information as will assist the court in issuing an order approving a judgment and interest payment plan as provided in this section.

          Following filing of the judgment and interest payment plan, any party may move for an order approving the judgment and interest payment plan which order shall require that the municipality include the payment schedule approved in the plan in future appropriations to the accident or tort liability fund.  The order shall be entered upon a finding that the plan provides adequate compensation for the needs of the party in whose favor the judgment has been entered, taking into consideration other available resources to the party, while providing for the current and future financial integrity of the municipality and its ability to maintain public service levels during the payment period.  Entry of the order shall bar further proceedings for collection on the judgment against either the municipality or its officers and employees; provided that either party may move to modify said order upon a showing of change of conditions.

 

          NEW SECTION.  Sec. 4.     Sections 1 through 3 of this act are each added to chapter 4.96 RCW.