HOUSE BILL REPORT

HB 86

BYRepresentatives Brough, Haugen, May, Bristow and Bumgarner

Requiring notice about sewer or water improvements to be sent to certain additional property owners.

House Committe on Local Government

Majority Report:     Do pass.  (12)

     Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Beck, Bumgarner, Ferguson, Hine, Madsen, Nealey, Nelson, Nutley, Rayburn, and L. Smith.

Minority Report:     Do not pass.  (1)

     Signed by Representative Zellinsky.

House Staff:Steve Lundin (786-7127)

AS PASSED HOUSE MARCH 10, 1987

BACKGROUND:

Local improvement districts (LID's) are mechanisms used by local governments to finance all or part of the costs of public improvements such as roads, streets, sewer lines, and water lines.  Special assessments are imposed upon property within a LID in relation to its benefit from being located near to the improvement.

A condition of purchasing a house using a Federal Housing Administration (FHA) loan is that the house be serviced by a sewer system or public water system if a sewer system or potable water system is available to the house.

SUMMARY:

Whenever a city, town, county, public utility district, sewer district, water district, or irrigation district creates a local improvement district (LID) to finance sanitary sewers or potable water facilities, the government must notify the owners of property located outside of the LID about the proposed creation of the LID if after the construction of the improvement the property would be required to be served by the facilities if the property were to be sold using a Federal Housing Administration (FHA) loan.

Cities and towns would be required to hold a public hearing on a proposed LID if the LID were initiated by petition of property owners.

EFFECT OF SENATE AMENDMENT(S):  The requirement is clarified when notice of a proposed local improvement district (LID) must be sent to the owners of certain property located outside of the proposed LID.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Representative Brough, Prime Sponsor; M.A. Weissman, Concerned Citizens of Federal Way; and Joe Daniels, Southwest Suburban Sewer District.

House Committee - Testified Against: Doug Baker, Association of Washington Cities.

House Committee - Testimony For:     Public hearings should be held by cities on all LID's, most do so now.  Two LID's were recently created in Federal Way that financed sewer lines in front of some people's houses who were not within the LID's.  When these people sell their houses they will have to hook up to the sewer line, and pay an equivalent connection charge to the full assessment that would otherwise have been on their property, if FHA financing were used.  FHA financing requires connection to sewer lines or water lines if they are available to the property.

House Committee - Testimony Against: This may complicate notice requirements when LID's are created.  The affected people can use a contract to sell their property and avoid connecting with the sewers.  How can we keep track of FHA financing requirements?

VOTE ON FINAL PASSAGE:

     Yeas 97; Nays 0; Absent 0; Excused 1

Excused:   Representative Doty