H-3793

AN ACT Relating to local improvement districts; adding a new section to chapter 35.21 RCW; adding a new section to chapter 35.58 RCW; adding a new section to chapter 36.69 RCW; adding a new section to chapter 36.73 RCW; adding a new section to chapter 36.83 RCW; adding a new section to chapter 36.88 RCW; adding a new section to chapter 36.94 RCW; adding a new section to chapter 39.46 RCW; adding a new section to chapter 52.20 RCW; adding a new section to chapter 53.08 RCW; adding a new section to chapter 54.16 RCW; adding a new section to chapter 56.20 RCW; adding a new section to chapter 57.16 RCW; adding a new section to chapter 87.03 RCW; adding a new chapter to Title 39 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. PURPOSE. The purpose of this chapter and section 50 of this act is to provide an optional method clarifying, simplifying, and making uniform the procedures by which local governments create local improvement districts, utility local improvement districts, local utility districts, and road improvement districts, impose and collect special assessments, and issue and sell local improvement district bonds and revenue bonds backed by the special assessments. The authority included in this chapter and section 50 of this act is supplementary and in addition to any authority otherwise existing. Except as otherwise provided, a local government may not use any of the authority included in this chapter and section 50 of this act without complying with this entire chapter and section 50 of this act and any limitations and restrictions included in this chapter and section 50 of this act.

NEW SECTION. Sec. 2. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter and section 50 of this act.

(1) "City" means a city or town.

(2) "Costs of public improvements" means all costs of constructing or providing public improvements financed in whole or in part by a local improvement district and all related costs associated with construction or provision of the public improvement, including, but not limited to, costs for the following services and activities: Engineering, designing, surveying, appraising, advertising, marketing, publishing, accounting, clerical, legal, financing, interim financing, increasing or establishing a guaranty fund or a separate reserve fund or other security for the payment of principal and interest on bonds, and acquiring land, rights of way, easements, or other facilities or rights.

(3) "Governing body" means the council, commission, or other legislative authority of a local government.

(4) "Local government" means a county, city, port district, public utility district, sewer district, water district, irrigation district, or other municipal corporation or quasi-municipal corporation otherwise authorized by statute to create local improvement districts.

(5) "Local improvement district" means a district created by a local government where a geographic area or areas are designated as specially benefited by public improvements, and the costs of the public improvements are to be defrayed wholly or in part by the imposition of special assessments on the benefited real property located within the district. Local improvement districts include utility local improvement districts created by local governments, local utility districts created by public utility districts, and road improvement districts created by counties.

(6) "Local improvement district bonds" means bonds, notes, or other evidences of indebtedness issued by a local government to pay all or part of the costs of public improvements financed through a local improvement district, which bonds, notes, or other evidences of indebtedness are not general indebtedness of the local government but are special indebtedness of a fund or funds of the local government, and which bonds, notes, or other evidences of indebtedness are payable exclusively from special assessments imposed within the local improvement district, from reserve funds that may be created, from a guaranty fund that may be created, and from other moneys legally available for such purposes.

(7) "Public improvements" means facilities, utilities, equipment, plant capacity, and related utility services that the local government is authorized to finance through the creation of a local improvement district and that: (a) Are of a public nature; and (b) confer a special benefit on real property within the local improvement district beyond the benefits conferred generally to the community.

(8) "Resolution" means an enactment by which a governing body formally adopts legislative provisions and matters of some permanency and includes ordinances and resolutions as applicable to the local government.

(9) "Special assessment" means a charge imposed upon real property within a local improvement district that is specially benefited, or will be specially benefited, from the public improvements financed in whole or in part through the local improvement district, and which shall not exceed the increased true and fair value resulting to the real property from the public improvements that are financed in whole or in part through the local improvement district.

(10) "Utility local improvement district" means a type of local improvement district used to construct utility public improvements where both special assessments and a portion of the utility rates, utility charges, or utility fees are pledged to the payment of revenue bonds or other revenue obligations, instead of local improvement district bonds, issued to finance all or part of the cost of the utility public improvements.

NEW SECTION. Sec. 3. PROPERTY OWNER SIGNATURES. Whenever real property is proposed to be included in a local improvement district, and the real property is being purchased on a contract, the contract purchaser of the real property shall be the person who is eligible to sign a petition under this chapter relating to that real property unless the owner had signed the petition prior to the sale.

NEW SECTION. Sec. 4. OPTIONAL AUTHORIZATION. (1) Any local government that is authorized by law other than this chapter to create local improvement districts may create local improvement districts, impose and collect special assessments related to the local improvement districts, and issue and sell local improvement district bonds, or revenue bonds if utility local improvement districts are created, as provided in this chapter and section 50 of this act. A local government may create a local improvement district to finance only those public improvements that the local government is authorized by law other than this chapter to provide and finance through the establishment of local improvement districts. Local improvement districts need not include all real property expected to be specially benefited and may include noncontiguous areas. When the governing body of a local government finds that all of the real property within a proposed local improvement district will be benefited by two or more separate public improvements as a whole, a local improvement district may include one or more separate areas even though the public improvements are not connected or continuous.

(2) A local government may use the procedures provided in this chapter to create a local improvement district outside of its boundaries, or to include areas located both inside and outside of its boundaries, if it is authorized to create such local improvement districts by other laws. The creation of a local improvement district outside of the boundaries of a local government may be subject to potential review by a boundary review board under chapter 36.93 RCW. A petition to initiate a local improvement district that is proposed to include areas located both inside and outside of the local government's boundaries must include signatures sufficient to initiate two separate local improvement districts, one including the area inside of the local government's boundaries and the other including the area outside of the local government's boundaries. The ability of real property owners to file objections to stop the creation of such a local improvement district that is initiated by resolution shall apply separately to the areas located inside of the local government's boundaries and outside of the local government's boundaries.

NEW SECTION. Sec. 5. INITIATION. A local improvement district may be initiated upon either: (1) The local government governing body adopting a resolution of intention to create the local improvement district; or (2) the filing of a petition requesting the local improvement district, which petition is signed by the owners of at least a majority of the area within the proposed local improvement district. The resolution of intention or petition shall describe the proposed boundaries of the local improvement district and the general nature and extent of the proposed public improvements proposed to be financed by the local improvement district in detail sufficient to apprise the reader of the type of public improvements proposed to be made, although other public improvements may be financed by the local improvement district that are not expressly described if these other public improvements are directly related to, and are of the same nature as, the described public improvements.

A resolution of intention shall also designate the number of the proposed local improvement district, shall state the initial estimated costs of the public improvements and the proposed estimated amount or proportion thereof that will be borne by special assessments imposed upon real property within the local improvement district, and shall fix a date, time, and place for a public hearing on the formation of the proposed local improvement district. Unless an emergency exists, the date for the initial public hearing shall be at least twenty days and no more than ninety days from the date when the resolution of intention is adopted. The initial public hearing may be continued by the governing body to such time or times and date or dates as it shall determine.

A petition shall be filed with the governing body of the local government that is requested to create the local improvement district, or the clerk, secretary, or other person designated by the governing body to accept such a petition. An engineer or other appropriate person designated by the governing body shall examine the petition for its adequacy and shall report to the governing body. The governing body shall formally determine the adequacy of the petition, including the sufficiency of the signatures, which shall be conclusive upon all persons. No person may withdraw his or her name from a petition after it has been filed. If the governing body determines the petition to be adequate, and that the proposed local improvement district appears to be in the public interest and the financing of the public improvement appears to be feasible, it shall adopt a resolution of intention to create the local improvement district, setting forth all of the details required to be included when a local improvement district is initiated by a resolution of intention.

NEW SECTION. Sec. 6. NOTICE OF PUBLIC HEARING ON CREATION. (1) Notice of the public hearing shall be published in at least two issues of a newspaper of general circulation in the proposed local improvement district, the date of the first publication to be at least fifteen days prior to the date fixed for the public hearing by the resolution of intention and the date of the second publication to be at least three days prior to the date fixed for the public hearing. If the official newspaper of the local government is not a newspaper of general circulation in the proposed local improvement district, the notice need not be published in the official newspaper.

Notice of the public hearing also shall be given to the owner or reputed owner of any lot, tract, or parcel of real property within the proposed local improvement district by mailing the notice at least fifteen days before the date fixed for the public hearing to the owner or reputed owner of the real property as shown on the tax rolls of the county assessor at the address shown thereon. However, if it appears that the name of the owner on the tax rolls of the county assessor is not the owner of the real property or that the address on the tax rolls is not the current address of the owner whose name is included in the tax rolls of the county assessor, the local government shall make reasonable efforts to mail additional notice to the owner of the real property or to the current address of the owner of the real property. This includes, but is not limited to, instances where the name and address of the owner or reputed owner who signs a petition to initiate the local improvement district differs from that contained on the tax rolls or where a pattern exists on the tax rolls where the name of a financial institution that makes property tax payments on real property appears instead of natural persons. Further, if the local government has actual notice that the real property is being purchased by a real estate contract, the local government shall mail additional notice to the contract purchaser. Whenever such notices are mailed, the local government shall maintain a list of these real property owners or reputed real property owners and their addresses and if applicable the contract purchasers and their addresses, which list shall be made available for public examination.

Notice of the public hearing also shall be posted in at least three conspicuous places in or around the proposed local improvement district.

If the state owns real property in the proposed local improvement district, notice shall be mailed to the state as provided in chapter 79.44 RCW.

(2) Published and mailed notices of the public hearing shall:

(a) Indicate whether the proposed local improvement district was initiated by petition or resolution;

(b) Designate the proposed local improvement district by number;

(c) Set forth the general nature of the proposed public improvements, which shall be in the same detail as required in section 5 of this act for the resolution of intention;

(d) Indicate the initial estimated costs of the public improvements and the estimated amount or proportion of the initial estimated costs proposed to be borne by special assessments imposed upon real property within the proposed local improvement district;

(e) Include a statement that actual special assessments may vary from special assessment estimates so long as they do not exceed an amount equal to the increased true and fair value of the real property in the local improvement district resulting from the public improvements;

(f) Indicate the date, time, and place of the public hearing designated in the resolution of intention;

(g) Indicate that the purpose of this public hearing is to solicit comments from affected persons on the desirability of proceeding with the proposed public improvements and the formation of the proposed local improvement district, the boundaries of the proposed local improvement district, the estimated cost of the public improvements, the proportion of the estimated cost to be borne by special assessments imposed upon real property within the proposed local improvement district, and the alternative or additional method of assessment provided in RCW 35.51.030, where applicable, but that amount of special assessments on separate lots, tracts, or parcels of real property will not be considered at this public hearing and will be considered at a separate, subsequent hearing; and

(h) Provide the times and location where the names of real property owners are kept on file for public perusal.

Posted notices also shall include a vicinity sketch or map representation of the boundaries of the proposed local improvement district.

(3) Notices sent to each owner or reputed owner by mail shall describe the general process by which a local improvement district is created and special assessments are measured, imposed, and collected and set forth the initial estimated amount of the cost of the public improvements to be borne by special assessment on the lot, tract, or parcel of real property owned by the owner or reputed owner.

(4) If the local government has designated a committee of the governing body or an officer to hear complaints and make recommendations to the full governing body, as provided in section 11 of this act, the notice also shall describe this additional step before the full governing body may adopt a resolution creating the local improvement district.

NEW SECTION. Sec. 7. PUBLIC HEARING, CREATION OF LOCAL IMPROVEMENT DISTRICT. The governing body of the local government shall hold a public hearing on the proposed local improvement district at the date, time, and place designated in the resolution of intention. The purpose of this public hearing is to solicit comments on the proposed public improvements and forming the proposed local improvement district, the boundaries of the proposed local improvement district, the estimated cost of the proposed public improvements, the proportion of the cost to be borne by special assessments imposed upon real property within the proposed local improvement district, and the alternative or additional method of assessment provided in RCW 35.51.030, where applicable, but the amount of initial estimated special assessments on separate lots, tracts, or parcels of real property shall not be considered at this public hearing.

At this public hearing the governing body shall hear objections from any person affected by the formation of the proposed local improvement district. The public hearing may be extended to other times and dates declared at the public hearing. At or after that public hearing, the governing body may make such changes in the boundaries of the proposed local improvement district or such modification in plans for the proposed public improvements as it deems necessary, whether or not the local improvement district was initiated by petition or resolution of intention.

An amended resolution of intention must be passed, new notice to real property owners given in the manner and form and within the time provided for the original notice, and a new public hearing must be held if the governing body: (1) Alters the general nature of the proposed public improvements; (2) increases the amount of the initial estimated cost of the proposed public improvements to be borne by special assessment to an amount greater than one hundred twenty-five percent of the initial estimated cost that was proposed to be borne by special assessment; or (3) alters the boundaries of the proposed boundaries to add real property that was not previously included. However, a new public hearing is not necessary if the owners of all the additional real property that is sought to be included to the proposed local improvement district consent in writing to the inclusion and the inclusion will not increase the special assessments imposed on other real property in the local improvement district. Further, a new public hearing is not necessary if the general nature of the proposed public improvement is altered, or if the initial estimated cost of the proposed public improvements to be borne by special assessment increases by more than one hundred twenty-five percent of the initial estimated cost, if the owners of all the real property in the proposed local improvement district consent in writing.

NEW SECTION. Sec. 8. RESOLUTION CREATING LOCAL IMPROVEMENT DISTRICT. At any time after the public hearing, the governing body of the local government may adopt a resolution ordering the public improvements and creating the local improvement district if the governing body finds that it is in the public interest to proceed with the creation of the local improvement district and the financing of the public improvements appears to be feasible. The creation of the local improvement district shall not be effective until at least forty-five days after the adoption of this resolution. The resolution shall describe the boundaries of the local improvement district and the general nature of the public improvements in the same detail as is required in section 5 of this act, and shall state both the estimated costs of the public improvements and the estimated amount or proportion of the costs of the public improvements to be borne by special assessments imposed upon real property within the proposed local improvement district. Within fifteen days after the adoption of the resolution ordering the public improvements and creating the local improvement district, the local government shall cause the following to be filed with the officer authorized to collect the special assessments: (1) A description of the public improvements; (2) the number of the local improvement district; (3) a copy of the diagram or print showing the boundaries of the local improvement district; and (4) the preliminary assessment roll or abstract of the local improvement district showing: (a) Each lot, tract, or parcel of real property within the proposed local improvement district that will be specially benefited by the public improvements; (b) the names and mailing addresses of the owner or reputed owners of each lot, tract, or parcel of real property, as shown on the tax rolls of the county assessor; and (c) the estimated special assessment proposed to be borne by each lot, tract, or parcel of real property within the local improvement district.

The governing body shall publish a notice that it has adopted a resolution ordering the public improvements and creating a local improvement district within fifteen days after the date that the resolution was adopted. The notice shall be published in a newspaper of general circulation in the local improvement district. If the official newspaper of the local government is not of general circulation in the local improvement district, the notice need not be published in the official newspaper. If the local improvement district was initiated by a resolution, the notice shall include a description of the process provided in section 9 of this act for the owners of real property within the proposed local improvement district to file written objections to the proposed local improvement district and cause the local government to lose the authority to proceed with the local improvement district, including, where applicable, the extraordinary process by which an emergency can be declared and the local government can proceed with creating the local improvement district notwithstanding the timely filing of sufficient objections.

After the local improvement district is created, the governing body shall acquire all necessary real property and easements for the public improvements, proceed with the public improvements, and pay all costs of the public improvements.

NEW SECTION. Sec. 9. OBJECTIONS TO LOCAL IMPROVEMENT DISTRICT INITIATED UNDER RESOLUTION METHOD. A proposed local improvement district initiated by resolution shall not be created if written objections to its formation are filed with the governing body of the local government within thirty days after the adoption of the resolution creating the local improvement district, which objections are signed by the owners of real property within the proposed local improvement district subject to at least a majority of the total proposed special assessments, as shown in the preliminary assessment roll.

However, the objections may be overruled and the local improvement district may be created by the local government if both:

(1) The public improvements are: (a) Sanitary sewers where the local health officer, or the department of ecology, files with the governing body a report declaring the public health necessity for the sanitary sewers; (b) water mains where the local health officer, or the department of social and health services, files with the governing body a report declaring the public health necessity for the water main; or (c) fire hydrants where the chief of the city fire department or fire district within which the fire hydrants will be located files with the governing body a report declaring the public safety necessity for the fire hydrants; and

(2) A resolution is adopted declaring an emergency and finding the public improvements to be necessary for the protection of the public health or public safety as follows: (a) If the proposed local improvement district is located within a city, the city council adopts the resolution; (b) if the proposed local improvement district is located in the unincorporated area of a county, the county legislative authority adopts the resolution; and (c) if the proposed local improvement district is located both within an incorporated city and the unincorporated area of a county, both the county legislative authority and city council adopt such resolutions for the area located within their respective jurisdictions. Such a resolution must be adopted by unanimous vote of all the members of the governing body who are present, which must be at least a quorum of the entire governing body. This requirement for action by a city council or county legislative authority applies even if the local government creating the local improvement district is a local government other than a city or county.

NEW SECTION. Sec. 10. WAIVING OBJECTIONS. A real property owner may enter into an agreement with a local government waiving the property owner's right under section 9 of this act to protest formation of a local improvement district. The agreement must specify the public improvements to be financed by the local improvement district and set forth the effective term of the agreement, which shall not exceed ten years. The agreement must be recorded with the auditor of the county in which the real property is located.

A real property owner may not enter into an agreement, as a condition imposed in connection with proposed property development, or otherwise, waiving the property owner's rights to object to special assessments, including the determination of special benefits allocable to the real property, or waiving the property owner's right of appeal to the superior court over the decision of the governing body affirming the final assessment roll.

NEW SECTION. Sec. 11. COMMITTEE OR OFFICER TO HEAR OBJECTIONS TO CREATION OF LOCAL IMPROVEMENT DISTRICTS. A governing body of a county or city may adopt an ordinance or resolution, and the governing body of any other local government may adopt a resolution, providing for a committee of the governing body, or an officer, to hold public hearings on the proposed formation of a local improvement district and hear objections to the proposed formation as provided in section 7 of this act. The committee or officer shall make a recommendation to the full governing body, which need not hold a public hearing on the proposed creation of the local improvement district. The full governing body may approve or disapprove the recommendation and, by resolution, order the public improvements and create the local improvement district. This resolution shall be subject to the conditions provided in sections 8 and 10 of this act.

NEW SECTION. Sec. 12. LAWSUITS CHALLENGING LOCAL IMPROVEMENT DISTRICTS. Except as provided in section 9 of this act, the action and decision of the governing body to create a local improvement district shall be final and conclusive. A lawsuit may not be maintained challenging the jurisdiction or authority of the governing body to proceed with the public improvements and create the local improvement district, or in any way challenging the validity of the actions or decisions or any proceedings relating to the actions or decisions, unless the lawsuit is served and filed no later than thirty days after publication of a notice that the resolution has been adopted ordering the improvements and creating the local improvement district.

NEW SECTION. Sec. 13. LOCAL IMPROVEMENT STUDY DISTRICTS. A local government may create a local improvement study district to finance a study of the feasibility of creating a local improvement district, including the following: (1) Preparation of preliminary plans and designs for the public improvements proposed to be financed by the proposed local improvement district; (2) designation of the proposed boundaries of the proposed local improvement district; (3) estimation of the total costs of the proposed public improvements; (4) estimation of the proportion of the total costs of the proposed public improvements to be borne by special assessments imposed upon real property within the proposed local improvement district; and (5) estimation of the amount of the costs of the proposed public improvements to be allocated to each lot, tract, or parcel of real property in the proposed local improvement district.

A local improvement study district may be initiated by petition or resolution in the same manner as a local improvement district is initiated. Except as provided in this section, the procedure to create a local improvement study district, and to impose special assessments to finance the study, is the same as for a local improvement district.

The governing body shall consider the proposed local improvement study district and the final assessment roll at the same public hearing, which may be continued. At this public hearing the governing body shall address the proposed boundaries of the local improvement study district, the purposes of the local improvement study district, the total amount proposed to be obtained from special assessments to finance the study, and the proposed individual special assessments on each included lot, tract, or parcel of real property to finance the study. Published and posted notices shall describe these subjects, but need not include a list of the proposed individual special assessments to finance the study. Notices mailed to each real property owner shall describe these subjects, including the proposed special assessment for the lot, tract, or parcel of real property owned by the real property owner.

After the public hearing, the governing body may adopt a resolution creating the local improvement study district and confirming the final assessment roll. However, a proposed local improvement study district that was initiated by resolution shall not be created if a petition protesting the proposed local improvement study district is timely filed under section 9 of this act. Any legal challenge to the local improvement study district or the special assessments must be filed within forty days of the adoption of the resolution creating the local improvement study district and confirming the assessment roll.

The special assessments shall be imposed in the same manner as special assessments in local improvement districts are imposed, except installment payments shall not be allowed and the governing body may provide for a period to pay the special assessments that exceeds thirty days.

Nothing in this section shall prevent the imposition of special assessments in a local improvement district for the cost of a feasibility study as described in this section.

The process of using a committee or officer to make recommendations on the creation of a local improvement district and assessment roll that is provided in section 11 of this act may be used to create a local improvement study district and confirm the assessment roll.

NEW SECTION. Sec. 14. UTILITY LOCAL IMPROVEMENT DISTRICTS, CREATION. Local governments that are authorized to construct utility public improvements that will generate periodic utility rates, utility charges, or utility fees may create a utility local improvement district to finance all or part of the utility public improvements. The initiation and formation of a utility local improvement district and the levying, collecting, and enforcement of special assessments and installments on special assessments shall be in the same manner and subject to the same procedures and limitations as the initiation and formation of local improvement districts and the levying, collecting, and enforcement of special assessments and installments in a local improvement district.

A resolution of intention or petition initiating the formation of a utility local improvement district, and any other resolutions relating to the utility local improvement district, must specify that a utility local improvement district is being formed or is being proposed to be formed and that the special assessments or installments shall be for the sole purpose of payment into such revenue bond fund or funds as may be specified by the governing body for the payment of revenue bonds used to defray the cost of all or part of such public utility improvements or into a special fund or funds to defray the costs of all or part of the utility local improvements. The governing body also shall pledge a portion of the utility rates, utility charges, or utility fees derived from the utility public improvements proposed to be financed in whole or in part by a utility local improvement district, or from the entire utility system of which the utility public improvements are part, to be placed into the revenue bond fund for the payment of revenue bonds used to defray the cost of all or part of such public utility improvements.

Revenue bonds shall be issued and sold in accordance with chapter 39.46 RCW.

NEW SECTION. Sec. 15. UTILITY LOCAL IMPROVEMENT DISTRICTS, CONVERSION TO. The governing body of a local government may by resolution convert any then existing local improvement district into a utility local improvement district at any time prior to the adoption of the resolution approving and confirming the final assessment roll of the local improvement district. The resolution converting the local improvement district must conform with all the requirements provided in section 14 of this act for the original creation of a utility local improvement district.

NEW SECTION. Sec. 16. ASSESSMENT ROLL, PREPARATION AND PUBLIC HEARING. (1) The local government shall prepare a proposed final assessment roll which shall include special assessments equalling the amount or proportion of the costs of the public improvements to be borne by the real property within the local improvement district. The proposed final assessment roll shall list: (a) Each separate lot, tract, or parcel of real property in the local improvement district; (b) the name and address of the owner or reputed owner of each lot, tract, or parcel of real property as shown on the tax rolls of the county assessor; and (c) the special assessment proposed to be imposed on each lot, tract, or parcel of real property.

The local government shall include the additional name and address of the owner or reputed owner of the real property differing from that included on the tax rolls of the county assessor where the local government has actual notice that the name and address of the owner or reputed owner that appears on the tax rolls is not accurate, or an additional address for the owner or reputed owner of the real property where the local government has reason to believe that the address for the owner or reputed owner on the tax rolls is not accurate. This includes, but is not limited to, instances where the name and address of the owner or reputed owner who signs a petition to initiate the local improvement district differs from that contained on the tax rolls or where a pattern exists on the tax rolls where the name of a financial institution that makes property taxes payments on real property appears instead of natural persons. Further, if the local government has actual notice that the real property is being purchased by a real estate contract, the local government shall include the name and address of the contract purchaser.

(2) The governing body shall hold a hearing on the proposed final assessment roll at the time, date, and place indicated in the notice of the public hearing provided under section 17 of this act. The governing body shall act as a board of equalization and hear objections to the final assessment roll, and may extend the public hearing to other times and dates declared at the public hearing, at which the governing body may modify the final proposed assessment roll or any part thereof, or set the proposed final assessment roll aside and order a new proposed final assessment roll to be prepared. The issues to be considered at the hearing shall include only: (a) Whether the special benefits to real property arising from the public improvements are greater than the special assessments included on the proposed final assessment roll for the real property; and (b) the fair proportionality of the special assessments among the specially benefited lots, tracts, or parcels of real property within the local improvement district. A final assessment roll shall be confirmed and approved by resolution of the governing body.

A new or continued hearing shall be held by the governing body if a proposed final assessment roll is amended to raise any special assessment appearing on the proposed roll or to include omitted real property, unless the owners of the real property subject to the increased special assessments or omitted real property consent in writing to the increase or inclusion. The new or continued hearing shall be limited to considering the increased special assessments or omitted real property. Notices shall be provided to the owners or reputed owners of the real property subject to the increased special assessment or omitted from the final proposed assessment roll in the same manner and form and within the time provided for the original notice.

(3) Objections to a proposed final assessment roll must be made in writing, shall clearly state the grounds for objections, and shall be filed with the governing body no later than the close of business on the business day immediately prior to the hearing. Other objections shall not be heard. Objections to a special assessment that are not made as provided in this section shall be deemed waived and shall not be considered by the governing body or a court on appeal, except to the extent that a lawsuit is initiated by a real property owner or contract purchaser of real property who has timely made objections and the governing body has altered the special assessments but not to the satisfaction of the property owner.

NEW SECTION. Sec. 17. HEARING ON ASSESSMENT ROLL, NOTICE. Notice of the original hearing on the proposed final assessment roll, and any hearing held as a result of raising assessments or including omitted real property, shall be published, posted, and mailed to the owner or reputed owner of the real property as provided in section 6 of this act for the public hearing on the formation of the local improvement district. However, the notice need only state that: (1) A hearing on the proposed final assessment roll will be held, giving the time, date, and place of the public hearing; (2) the proposed final assessment roll is available for public examination, giving the times and location where the proposed final assessment roll is available for public examination; (3) the issues that will be considered at the hearing are limited to: (a) Whether the special benefits to the real property within the local improvement district arising from the public improvements are greater than the special assessments included on the proposed final assessment roll for the real property; and (b) the fair proportionality of the special assessments among the specially benefited real property within the local improvement district; (4) objections to the proposed final special assessment must be in writing, include clear grounds for objections, and must be filed by the close of business on the business day immediately prior to the hearing; and (5) failure to so object shall be deemed to waive an objection.

Notices mailed to the owners or reputed owners additionally shall indicate the amount of special assessment proposed to be imposed on the real property owned by the person so notified.

NEW SECTION. Sec. 18. ASSESSMENT ROLL, COMMITTEE OR OFFICER. (1) The governing body of any county or city may adopt an ordinance, and the governing body of any other local government may adopt a resolution, providing for a committee of the governing body, or an officer, to hear objections to the proposed final assessment roll, act as a board of equalization, and make recommendations to the full governing body for its approval, without further public hearing.

The ordinance or resolution shall provide that: (a) An appeal must be made in writing to the full governing body by a person protesting his or her special assessment as recommended by the committee or officer; (b) within ten days after the hearing at which the committee or officer recommends the final assessment roll, the local government must publish a notice stating: (i) The recommendations of the committee or officer; (ii) the date, time, and place at which the governing body will consider the recommendations of the committee or officer; and (iii) that a person protesting his or her recommended special assessment must file in writing an appeal with the governing body clearly stating grounds for objections to the recommendations by the close of business on the business day immediately prior to the day of the deliberations by the governing body; and (c) notice of the governing body considering the recommended special assessments must be mailed to each owner or reputed owner of real property in the local improvement district, as provided in section 6 of this act for the public hearing on the formation of the local improvement district, at least ten days prior to the date of this consideration that includes the same matters included in the published notice along with the recommended special assessment for the real property owned by the property owner. The notice shall be published in a newspaper of general circulation in the local improvement district. If the official newspaper of the local government is not a newspaper in general circulation in the local improvement district, the notice need not be published in the official newspaper.

(2) The full governing body by resolution shall: (a) Approve the recommended final assessment roll; (b) modify the recommended final assessment roll, as a result of hearing objections, and approve the modified recommended final assessment roll; or (c) reject the recommended final assessment roll, or any portion thereof, and return it to the committee or officer for further public hearings and recommendations. No objection to the decision of the full governing body approving the final assessment roll may be considered by a court unless an objection to the decision has been filed timely with the governing body as provided in this section.

NEW SECTION. Sec. 19. SPECIAL ASSESSMENTS, MEASUREMENT. (1) All real property included within a local improvement district shall be considered to be the real property specially benefited by the public improvements and shall be the real property upon which special assessments are imposed to pay the costs of the public improvements, unless the local government provides otherwise, or such part of the costs as may be chargeable against the real property specially benefited. The special assessments shall be imposed on real property in accordance with the special benefits conferred on the real property up to but not in excess of the costs of the public improvements, as provided in the final assessment roll.

Special assessments may be measured by front footage, acreage, or any other method or combination of methods that are deemed to fairly reflect special benefits, including the alternative or additional method provided in RCW 35.51.030. Zones around the public improvements may be used that reflect different levels of benefit in each zone that are measured by a front footage, acreage, or other method.

Public real property, including real property owned by the state of Washington, shall be subject to special assessments to the same extent that private real property is subject to the special assessments.

(2) Whenever it is proposed that a local improvement district finance two or more separate public improvements that are not connected or continuous, the special assessment rates shall be ascertained on the basis of the special benefit of the public improvements as a whole to the properties within the entire local improvement district, or on the basis of the benefit of each unit of the public improvements to the properties specially benefited by that unit, or by a combination of both bases. Where no finding is made by the governing body as to the benefit of the public improvements as a whole to all of the real property within a local improvement district, the cost and expense of each continuous unit of the public improvements shall be ascertained separately, as near as may be, and the special assessment rates shall be computed on the basis of the cost and expense of each unit.

In the event of the initiation of a local improvement district authorized by this subsection, the governing body may, in its discretion, eliminate from the local improvement district any unit of the public improvement that is not connected or continuous and may proceed with the balance of the public improvements within the local improvement district, as fully and completely as though the eliminated unit had not been included within the local improvement district, without the giving of any notices to the real property owners remaining within the local improvement district, other than such notices as are required by the provisions of this chapter to be given subsequent to such elimination.

NEW SECTION. Sec. 20. VARIATION OR CONDITIONING OF SPECIAL ASSESSMENTS. Special assessments may be varied or conditioned as follows:

(1) The local government's engineer or other designated official may contract with the owner of real property for the property owner to pay for the costs of preparing engineering plans, surveys, studies, appraisals, legal services, and other expenses associated with public improvements to be financed in whole or in part by a proposed local improvement district, but not including the cost of actually constructing the public improvements. The owner may be reimbursed for any prepaid costs from the proceeds of bonds issued by the local improvement district created to finance the public improvements, from special assessments associated with the local improvement district created to finance the public improvements that are paid by other real property owners, or by a credit in the amount of the advanced costs against future special assessments imposed against real property located within the district.

The contract shall provide that the real property owner shall not be reimbursed for any costs that are advanced if a local improvement district is not formed to construct the specified public improvements within six years of the date of the contract. The contract shall provide that any preformation work shall be conducted only under the direction of the local government's engineer or other appropriate official.

(2) A local government ordering a local improvement that is financed in whole or in part by the imposition of special assessments on real property located within a local improvement district may provide in the resolution creating the local improvement district that the payment of a special assessment imposed on underdeveloped real property within the local improvement district may be made by owners of other real property within the local improvement district, if they so elect, subject to terms of reimbursement set forth in the resolution. The terms for reimbursement shall require the owners of underdeveloped real property on whose behalf payments of special assessments have been made to reimburse all such special assessment payments to the party who made them when the real property is developed or redeveloped, together with interest at a rate specified in the resolution. The resolution may provide that reimbursement shall be made on a one-time, lump sum basis, or over a period not to exceed five years. The resolution may provide that reimbursement shall be made no later than the time of dissolution of the local improvement district, or may provide that no reimbursement is due if the underdeveloped real property is not developed or redeveloped before the dissolution of the local improvement district. Reimbursement amounts due from underdeveloped real property under this subsection are liens upon the underdeveloped real property in the same manner and with like effect as special assessments made under this chapter. For the purposes of this subsection, "underdeveloped real property" includes real property that, in the discretion of the governing body, is undeveloped or is not developed to its highest and best use and is likely to be developed or redeveloped before the dissolution of the local improvement district.

(3) The governing body may use federal, local, or state funds that become available to finance the public improvements financed by a local improvement district after the final assessment roll has been confirmed to reduce special assessments on a uniform basis that are imposed on real property within the local improvement district.

(4) A local government may credit a special assessment that is imposed within a local improvement district by the value of any real property that the real property owner donates to the local government for use as part of the public improvement.

(5) A county or city ordering a public improvement that is financed in whole or in part by the imposition of special assessments on real property located within a local improvement district may provide in the resolution creating the local improvement district that moneys paid or the cost of improvements constructed by a real property owner in the local improvement district, in satisfaction of obligations under chapter 39.92 RCW, shall be credited against the special assessments imposed upon the owner's real property at the time the credit is made, if those moneys paid or improvements constructed directly defray the cost of the specified public improvements financed by the local improvement district and if credit for such amounts is reflected in the final assessment roll confirmed for the local improvement district.

NEW SECTION. Sec. 21. ASSESSMENT ROLL, LAWSUITS. The decision of a governing body upon any objection to the final assessment roll may be appealed to the superior court only if the objection had been made timely in the manner prescribed in this chapter. The appeal shall be made within ten days after publication of the resolution confirming the final assessment roll, a summary of the resolution confirming the final assessment roll, or a notice that the resolution confirming the final assessment roll has been adopted by filing written notice of the appeal with the governing body of the local government and the clerk of the superior court in the county in which the real property is situated. The notice of appeal shall describe the real property and set forth the objections of the appellant to the special assessment. The notice of appeal filed with the governing body shall include a request that the transcript described in this section be produced by an officer of the local government within ten days.

Within ten days from the filing of such notice of appeal with the clerk of the superior court, the appellant shall file with the clerk of the court a transcript consisting of the final assessment roll and his or her objections thereto, together with the resolution confirming such final assessment roll and the record of the local government governing body and the committee or officer, if any, with reference to the special assessment, which transcript, upon payment of the necessary fees therefor, shall be furnished by an officer of the local government and by him or her certified to contain full, true, and correct copies of all matters and proceedings required to be included in the transcript. The fees shall be the same as the fees payable to the county clerk for the preparation and certification of transcripts on appeal to the supreme court or the court of appeals in civil actions.

At the time of the filing of the notice of appeal with the clerk of the superior court a sufficient bond in the sum of five hundred dollars for each lot, tract, or parcel of real property for which the special assessment is being appealed, but not to exceed ten percent of the special assessment for each lot, tract, or parcel of real property, with sureties thereon as provided by law for appeals in civil cases, shall be filed as a condition to prosecution of the appeal without delay, and if unsuccessful, to pay all costs and expenses incurred by the local government because of the appeal. The court may order the appellant, upon application therefor, to execute and file such additional bond or bonds as the necessity of the case may require.

Within three business days after such transcript is filed in the superior court, the appellant shall give written notice to the local government governing body, and chief legal officer thereof, that such transcript was filed. The notice shall state a time, not less than three business days from the service thereof, when the appellant will call up the cause for hearing.

The superior court shall, at this time or at such further time as may be fixed by order of the court, hear and determine such appeal without a jury, and such cause shall have preference over all civil causes pending in the court, except proceedings under an act relating to eminent domain in such local government and actions of forcible entry and detainer. The judgment of the court shall confirm, correct, modify, or annul the special assessment insofar as the same affects the real property of the appellant. A certified copy of the decision of the court shall be filed with the officer having custody of the final assessment roll, and he or she shall modify and correct such final assessment roll in accordance with the decision.

An appeal shall lie to the court of appeals or the supreme court from the judgment of the superior court, if the appeal is taken within fifteen days after the date of the entry of the judgment of the superior court, and the record and opening brief of the appellant in the cause shall be filed in the court of appeals or the supreme court within sixty days after the appeal is taken by notice as provided in this section. The time for filing the record and serving and filing of briefs may be extended by order of the superior court, or by stipulation of the parties concerned. The court of appeals or the supreme court on such appeal may correct, modify, confirm, or annul the special assessment insofar as the same affects the real property of the appellant. A certified copy of the order of the court of appeals or the supreme court upon such appeal shall be filed with the officer having custody of such final assessment roll, who shall thereupon modify and correct such final assessment roll in accordance with such decision.

NEW SECTION. Sec. 22. SPECIAL ASSESSMENTS, COLLECTION. Special assessments and any installments on special assessments shall be collected by the treasurer of the local government. However, any local government with a treasurer other than the county treasurer may contract with the county treasurer, and the county treasurer may contract, for the collection of special assessments, and any installments on special assessments, imposed on real property within the county. The county treasurer may include the collection of special assessments or installments on special assessments with the collection of property taxes.

The treasurer shall publish a notice that the assessment roll has been confirmed, that the special assessments are to be collected, and that all or any portion of the special assessments may be paid within a prepayment period of thirty days from the date of publication of the notice, or more than thirty days if specified in the notice, without penalty, interest, or costs. The notice shall be published in a newspaper of general circulation in the local improvement district. If the official newspaper of the local government is not a newspaper of general circulation in the local improvement district, the notice need not be published in the official newspaper.

Within ten days of the newspaper publication, the treasurer shall mail a notice to each owner or reputed owner of real property whose name appears on the assessment roll, at the address shown on the assessment roll, for each lot, tract, or parcel of real property described on the list, stating the nature of the special assessment, a description of the real property subject to the special assessment, the total amount of the special assessment due, that all or a portion of the special assessment may be paid during the prepayment period without penalty, interest, or costs. The remaining unpaid portion of the special assessment shall be paid in installments. The determination of the local government whether the payment is received in full shall be conclusive.

NEW SECTION. Sec. 23. SPECIAL ASSESSMENTS, PAYMENT, INSTALLMENTS. All or any portion of a special assessment may be paid without interest, penalty, or costs during the prepayment period and placed into a special fund to defray the costs of the public improvement. The remainder shall be paid in installments as provided in a resolution adopted by the governing body, but the last installment shall be due at least two years before the maximum term of the bonds issued to pay for the public improvements, if bonds are issued.

The resolution of the governing body approving the final assessment roll shall establish an amount of interest that will be imposed on late special assessment installments and the penalty, in addition to the interest, that will be imposed on late special assessment installments, which shall not be less than five percent of the delinquent special assessment installment.

The owner of any real property charged with a special assessment may redeem the real property from all liability for the unpaid amount of the installments by paying, to the treasurer, the remaining portion of the unpaid special assessment that is attributable to principal on the local improvement district bonds or revenue bonds, and the interest on the installment due at the next installment payment date, or the remaining amount of the special assessment and any interest and penalties due on the delinquent special assessment if bonds are not issued.

NEW SECTION. Sec. 24. FINAL ASSESSMENT ROLL, FILED. The final assessment roll shall be filed with the treasurer who shall immediately post the final assessment roll in the index of local improvement special assessments against the real properties on which special assessments have been imposed.

NEW SECTION. Sec. 25. SPECIAL ASSESSMENTS, LIEN. The special assessment imposed upon real property in the final assessment roll, as confirmed by resolution of the governing body approving the final assessment roll, shall be a lien upon the real property assessed from the time the final assessment roll is placed in the hands of the treasurer for collection, but as between the grantor and grantee, or vendor and vendee of any real property, when there is no express agreement as to payment of the special assessments against the real property, it shall be assumed that the special assessments were imposed thirty days after the filing of the diagram or print and the estimated cost of the public improvements to be borne by the real property as provided in section 8 of this act thereby creating the obligation as to the payment of the special assessment. Interest, penalty, administrative, and reasonable legal costs of collecting a late special assessment shall be included in and shall be a part of the special assessment lien.

Except for a general tax lien, the special assessment lien shall be paramount and superior to any other lien or encumbrance that was created before, or is created after, the special assessment lien is created.

NEW SECTION. Sec. 26. SPECIAL ASSESSMENTS, VALIDITY. A special assessment shall be valid and enforceable and the special assessment lien on the real property assessed shall be valid if the governing body of the local government imposed the special assessment in good faith and without fraud.

NEW SECTION. Sec. 27. SPECIAL ASSESSMENTS, REASSESSMENT. Whenever special assessments for a local improvement district are not valid in whole or in part for want of form, insufficiency, informality, irregularity, or nonconformance with the provisions of law, the governing body may reimpose the special assessments and enforce their collection in accordance with the provisions of law in effect at the time the reimposition is made. The authority to reimpose special assessments shall apply to original special assessments, special assessments upon omitted real property, and supplemental special assessments.

The resolution ordering the reimposition of the special assessments must be adopted within ten years from the date the original special assessments for the same public improvements were finally held to be invalid.

The fact that the contract has been let or that the public improvements have been made and completed in whole or in part shall not prevent the reimposition of special assessments.

All sums paid on each former attempted special assessment shall be credited against the special assessment that is reimposed on the same real property.

NEW SECTION. Sec. 28. SPECIAL ASSESSMENTS, OMISSIONS. If real property located in a local improvement district has been omitted from the final assessment roll due to mistake or inadvertence or for any cause real property which, except for being omitted, would have been subject to special assessment, the governing body, upon its own motion, or upon the application of the owner of any real property in the local improvement district which has been assessed for the public improvements, may proceed to impose special assessments on the real property so omitted in accordance with the special benefits accruing to it by reason of the public improvements in proportion to the special assessments imposed upon other real property in the local improvement district.

NEW SECTION. Sec. 29. SPECIAL ASSESSMENTS, SUPPLEMENTAL. The governing body shall impose supplemental special assessments on specially benefited real property if, by reason of mistake or inadvertence or for any other cause, the amount of special assessments that was imposed is not equal to that portion of the costs of the public improvements determined at the time of the creation of the local improvement district to be payable from special assessments. All specially benefited real property may be subject to the supplemental special assessments, even if it was not included in the original local improvement district.

Supplemental special assessments shall be made in accordance with the provisions of law existing at the time of the imposition of the supplemental special assessments.

The resolution ordering supplemental special assessments must be adopted by the governing body within ten years from the date that it was finally determined that the total amount of valid special assessments imposed on account of the public improvements was insufficient to pay the whole cost or that portion of the cost of the public improvements to be paid by special assessment.

NEW SECTION. Sec. 30. SPECIAL ASSESSMENTS, PROCEDURE FOR REASSESSING, OMISSIONS, SUPPLEMENTAL. Every reassessment, special assessment on omitted real property, and supplemental special assessment shall be imposed upon the real property which has been or will be specially benefited by the public improvements financed in whole or in part by the local improvement district, as provided in sections 19 and 20 of this act.

All of the provisions of law relating to the filing of assessment rolls, time and place for hearing thereon, notice of hearing, the hearing upon the roll, the confirmation of the assessment roll, the time when the special assessments become a lien upon the real property assessed, the proceedings on appeal from any such special assessments, the method of collecting the special assessments, and all proceedings for enforcing the lien thereof shall apply to reassessments, special assessments on omitted real property, or supplemental special assessments as in the case of original special assessments.

NEW SECTION. Sec. 31. SPECIAL ASSESSMENTS, SEGREGATION. The governing body of a local government may order the segregation of a special assessment that was imposed on any real property whenever the real property against which the special assessment was imposed has been sold in part or divided. If an installment has been made, the segregation shall apportion the remaining installments on the parts or the lots, tracts, or parcels of real property that have been created. Each segregation shall be in recordable form.

The owner of real property who desires a special assessment against the real property segregated shall apply to the governing body of the local government which imposed the special assessment. If the governing body determines that a segregation should be made, it shall order by resolution the local government treasurer to segregate the special assessment on the original assessment roll as directed in the resolution. The segregation may be made on the same basis as the original special assessment was imposed or by any other method deemed to fairly reflect special benefits to the segregated parts, and the total of the segregated parts of the special assessment shall equal the amount of the special assessment unpaid before segregation. The resolution shall describe the original tract and the amount and date of the original special assessment and shall define the boundaries of the segregated parts and the amount of the special assessment imposed on each part. A certified copy of the resolution shall be delivered to the treasurer who shall proceed to segregate the special assessment upon being tendered a fee of two hundred fifty dollars for each part that is segregated. In addition to such charge the governing body may require as a condition to the order of segregation that the person seeking it pay the local government the reasonable engineering, legal, administrative, and clerical costs incident to making the segregation.

NEW SECTION. Sec. 32. LIENS ON SPECIAL ASSESSMENTS, DELINQUENCY, COMMENCEMENT OF ACTIONS. If one year's payment of installments on a special assessment has been delinquent for one year or more, the local government shall proceed with the foreclosure of the delinquent special assessment or delinquent installment or installments thereof by proceedings brought in its own name in the superior court of the county in which the real property subject to such special assessment is located.

The proceedings shall not be commenced unless the treasurer has notified the persons whose names appear on the final assessment roll as owners of the real property charged with the special assessment or installments which are delinquent, at the address last known to the treasurer, about the commencement of the proceedings. Notice shall be by certified mail sent at least thirty days before the proceedings commence. If the person whose name appears on the tax rolls of the county assessor as owner of the real property, or the address shown for the owner, differs from that appearing on the final assessment roll, then the treasurer shall also mail a copy of the notice to that person or that address. The notice shall state the amount due upon each separate lot, tract, or parcel of real property and the date after which the proceedings will be commenced. The treasurer shall file the affidavit of the person who mailed the notices with the clerk of the superior court at the time of commencement of the foreclosure proceeding. This affidavit shall be conclusive proof of compliance with the requirements of this section.

NEW SECTION. Sec. 33. LIENS ON SPECIAL ASSESSMENTS, MANDATORY COMMENCEMENT OF ACTION. An action to collect a special assessment or any installment or installments on a special assessment, or to enforce the special assessment lien, whether brought by the local government or by any person having the right to bring such action, must be commenced within ten years after the special assessment becomes delinquent or within ten years after the last installment becomes delinquent if the special assessment is payable in installments. However, the time during which payment of principal in special assessments imposed by a city is deferred as to economically disadvantaged real property owners, as provided in RCW 35.50.030, shall not be a part of the time limited for the commencement of action.

NEW SECTION. Sec. 34. LIENS ON SPECIAL ASSESSMENTS, INSTALLMENT DELINQUENCY. The enforcement of the lien on any delinquent installment of a special assessment shall not prevent the enforcement of the lien of any subsequent delinquent installment.

At its discretion, a local government may require the entire special assessment to become due and payable and may collect the entire remaining special assessment by foreclosure if an installment of the special assessment is delinquent. The payment of all delinquent installments together with interest, penalty, and costs at any time before entry of judgment in foreclosure shall extend the time of payment on the remainder of the special assessment as if there had been no delinquency or foreclosure. Except when the local government is foreclosing on real property for two or more delinquent installments that include the last installment, the treasurer shall cause the foreclosure action against the real property to be dismissed if all the delinquent installments are paid at any time before sale, together with all associated interest, penalty, and costs.

NEW SECTION. Sec. 35. LIENS ON SPECIAL ASSESSMENTS, FORECLOSURE, COMPLAINT. In foreclosing special assessment liens, a local government shall proceed by filing a complaint in the superior court of the county in which the real property subject to the special assessment is located. The complaint shall be sufficient if it alleges or specifies: (1) A resolution was adopted authorizing the public improvements and creating the local improvement district; (2) the public improvements were completed; (3) special assessments were imposed and confirmed; (4) the date of delinquency of the special assessment, or the installment or installments on the special assessment, for the enforcement of which the action is brought; and (5) the delinquent special assessment, or installment or installments, have not been paid.

NEW SECTION. Sec. 36. LIENS ON SPECIAL ASSESSMENTS, FORECLOSURE, SUMMONS. In foreclosing special assessment liens, the summons shall be substantially in the following form:

SUPERIOR COURT OF WASHINGTON

FOR [ .......... ] COUNTY

..................................,}

PLAINTIFF,} No.

v. }

..................................,} SUMMONS FOR FORECLOSURE

} OF SPECIAL

DEFENDANT.} ASSESSMENT LIEN

To the Defendant: A lawsuit has been started against you in the above entitled court by .........., plaintiff. Plaintiff's claim is stated in the written complaint, a copy of which is served upon you with this summons. The purpose of this suit is to foreclose on your interest in the following described real property:

(legal description)

which is located at:

(street address).

In order to defend against this lawsuit, you must respond to the complaint by stating your defense in writing, and by serving a copy upon the person signing this summons within 20 days after the service of this summons, excluding the day of service, or a default judgment may be entered against you without notice. A default judgment is one where plaintiff is entitled to what he or she asks for because you have not responded. If you serve a notice of appearance on the undersigned person, you are entitled to notice before a default judgment may be entered.

IMPORTANT NOTICE

If judgment is taken against you, either by default or after hearing by the court, your real property will be sold at public auction.

You may prevent the sale by paying the amount of the judgment at any time prior to the sale.

If your real property is sold, you may redeem the real property at any time up to two years after the date of the sale, by paying the amount for which the real property was sold, plus interest and costs of the sale.

If you wish to seek the advice of an attorney in this matter, you should do so promptly so that your written response, if any, may be served on time.

(signed)........................................................................

Print or Type Name

( ) Plaintiff ( ) Plaintiff's

Attorney

P.O. Address .........................

Dated ................. Telephone Number ..................

NEW SECTION. Sec. 37. LIENS ON SPECIAL ASSESSMENTS, FORECLOSURE, SUMMONS, RESIDENTIAL PROPERTY. In foreclosing special assessments, if the lot, tract, or parcel of real property contains a residential structure with an assessed value of at least two thousand dollars, the summons shall be served upon the defendants in the manner required by RCW 4.28.080. For all other lots, tracts, or parcels of real property the summons shall be served by either personal service on the defendants or by certified mail.

NEW SECTION. Sec. 38. LIENS ON SPECIAL ASSESSMENTS, FORECLOSURE, LAWSUITS. In foreclosing special assessment liens, it is not necessary to bring a separate suit for each of the lots, tracts, or parcels of real property that is subject to a delinquent special assessment, or a delinquent installment, or for each separate local improvement district. The local government may proceed in the same action against all or any of the lots, tracts, or parcels of real property upon which special assessments or installments are delinquent under any and all final assessment rolls in one or more local improvement districts that have been created by the local government. Each person who owns or claims to own real property containing a residential structure with an assessed value of at least two thousand dollars that is subject to delinquent special assessments or delinquent installments shall be made a defendant in the action. The persons whose names appear on the final assessment roll and assessor's tax rolls as owners of any other real property that is subject to delinquent special assessments or delinquent installments shall be made defendants in the action.

The final assessment roll and the resolution confirming the final assessment roll, or duly authenticated copies of the final assessment roll and confirming resolution, shall be prima facie evidence of the regularity and legality of the proceedings connected therewith and the burden of proof shall be on the defendants.

NEW SECTION. Sec. 39. LIENS ON SPECIAL ASSESSMENTS, FORECLOSURE, TRIAL, JUDGMENT, APPEALS. The action foreclosing a special assessment lien shall be tried by the court without a jury. If the parties interested in any particular real property default, the court may enter judgment of foreclosure and sale as to such parties and real property and the action may proceed as to the remaining defendants and real property. Judgment and order of sale may be entered as to any one or more separate lots, tracts, or parcels of real property involved in the action and the court shall retain jurisdiction to others.

The judgment shall specify separately the amount of the special assessment or installments with interest, penalty, and all reasonable costs of the sale, including the title searches, chargeable to each lot, tract, or parcel of real property. The judgment shall have the effect of a separate judgment as to each lot, tract, or parcel of real property described in the judgment, and any appeal shall not invalidate or delay the judgment except as to the real property concerning which the appeal is taken. In the judgment the court shall order the real property that is described in the judgment to be sold by the treasurer or by the county sheriff and an order of sale shall issue for the enforcement of the judgment.

In all other respects, the trial, judgment, and appeals to the court of appeals or supreme court shall be governed by the statutes governing the foreclosure of mortgages on real property.

Prior to the sale of the real property, if the real property is shown on the assessor's tax rolls under unknown owner or if the real property contains a residential structure having an assessed value of two thousand dollars or more, the treasurer shall order or conduct a title search of the real property to determine the record title holders and all persons claiming a mortgage, deed of trust, or mechanic's, laborer's, materialmen's, or vendor's lien on the real property.

At least thirty days prior to the sale of the real property, a copy of the notice of sale shall be mailed by certified mail to each defendant in the foreclosure action as to that lot, tract, or parcel of real property and, if the owner is unknown or the real property contains a residential structure having an assessed value of two thousand dollars or more, a copy of the notice of sale shall be mailed by certified mail to any additional record title holders and persons claiming a mortgage, deed of trust, or mechanic's, laborer's, materialmen's, or vendor's lien on the real property.

In all other respects the procedure for sale shall be conducted in the same manner as real property tax sales described in RCW 84.64.080.

NEW SECTION. Sec. 40. LIENS ON SPECIAL ASSESSMENTS, FORECLOSURE, SALES, RIGHT OF REDEMPTION. Each sale of real property in an action foreclosing special assessments liens shall be subject to the right of redemption within two years from the date of sale. If the proceeds of the sale of real property exceed the delinquent special assessment or installments and the interest, penalty, and costs, the excess shall be remitted to the record owner of the real property prior to the sale or conveyance.

NEW SECTION. Sec. 41. LIENS ON SPECIAL ASSESSMENTS, ACQUISITION OF REAL PROPERTY. Real property bid in by the local government or struck off to it pursuant to proceedings for the foreclosure of a special assessment lien shall be held in trust by the local government for the fund of the local improvement district, or the revenue bond fund into which special assessments in utility local improvement districts are pledged, to be paid for the benefit of which the real property was sold. Any real property so held in trust shall be exempt from taxation for general state, county, and municipal purposes during the period that it is so held.

The local government may relieve itself of its trust relation to a local improvement district fund or revenue bond fund into which special assessments are pledged to be paid as to any lot, tract, or parcel of real property by paying into the fund the amount of the delinquent special assessment or delinquent installments for which the real property was sold and all accrued interest, together with interest to the time of the next call of bonds against the fund at the rate provided on the bonds. The local government shall hold the real property discharged of the trust when this payment is made.

A local government may lease or sell and convey any such real property held in trust by it, by virtue of the conveyance thereof to it by a special assessment deed. The sale may be public or private and for such price and upon such terms as may be determined by resolution of the governing body. After first reimbursing any funds from which moneys on account of any real property may have been advanced, all proceeds resulting from lease or sale of the real property shall ratably belong and be refunded to the record owner of the real property prior to a sale or conveyance.

NEW SECTION. Sec. 42. GENERAL TAX FORECLOSURES, PAYMENT OF SPECIAL ASSESSMENTS. Before commencing any action to foreclose the lien of a certificate, the holder shall pay in full the special assessment or installments thereof which are a lien against the real property or any portion thereof, or the holder may elect to proceed to acquire title to the real property subject to certain or all of the special assessment or installments which are a lien thereon, in which case the complaint, decree of foreclosure, order of sale, sale, certificate of sale, and deed shall so state.

If the holder pays the special assessment or installments the holder is entitled to twelve percent interest per annum on the amount of the delinquent special assessment or delinquent installments that are paid, from the date of payment.

NEW SECTION. Sec. 43. GENERAL TAX FORECLOSURES, SPECIAL ASSESSMENTS, PROCEDURE. In county foreclosures for delinquency in the payment of general taxes, the county treasurer shall mail a copy of the published summons to the treasurer of every local government within which any real property involved in the foreclosure proceeding is situated. The copy of the summons shall be mailed within fifteen days after its first publication, but the county treasurer's failure to do so shall not affect the jurisdiction of the court nor the priority of the tax sought to be foreclosed.

If any real property situated in a local government is offered for sale for general taxes, the local government may protect the lien or liens of any special assessment or installment outstanding against all or part of such real property by purchasing the real property or taking other actions.

If a local government has bid in any real property on sale for the special assessment, it may satisfy the lien of any outstanding general taxes upon the real property by payment of the face amount of such taxes and costs, without penalty or interest, but this shall not apply where certificates of delinquency against the real property have been issued to private persons.

If real property is struck off to or bid in by a county at a sale for general taxes, and is subject to special assessment in any local government, or has been taken over by the local government on the foreclosure of the special assessment, the local government may acquire the real property from the county at any time before resale and receive a deed for the real property upon paying the face amount of such taxes and costs, without penalty or interest.

Whenever real property struck off to or bid in by a county at a sale for general taxes is subsequently sold by the county, the proceeds of the sale shall first be applied to discharge in full the lien or liens for general taxes for which the real property was sold. The remainder, or such portion thereof as may be necessary, shall be paid to the local government to discharge all special assessment liens against the real property. The surplus, if any, shall be distributed as provided in chapter 84.64 RCW.

NEW SECTION. Sec. 44. BONDS, ISSUANCE AND SALE. Local improvement district bonds, and revenue bonds if a utility improvement district is created, shall be issued and sold in accordance with chapter 39.46 RCW. Local improvement district bonds, or revenue bonds if a utility local improvement district is created, may be issued to obtain money sufficient to cover that portion of the special assessments that are not paid within the prepayment period provided in section 23 of this act.

NEW SECTION. Sec. 45. LOCAL IMPROVEMENT DISTRICT GUARANTY FUND, CREATION. (1) Any local government authorized to issue local improvement district bonds shall create a fund for the purpose of guaranteeing, to the extent of the fund, the payment of the principal of and interest on local improvement district bonds that it issues under this chapter or that it has issued under this chapter. A cash balance of at least five percent of the principal amount of all outstanding local improvement district bonds shall be maintained in the guaranty fund. Moneys to establish and maintain a guaranty fund may be obtained from: (a) Utility rates and charges imposed by the local government; (b) the proceeds of the sale of any real property held in trust by the guaranty fund; (c) any surplus remaining in another local improvement district bond fund that is not required to be retained in the other local improvement district bond fund; (d) a portion of the proceeds obtained from selling local improvement district bonds; (e) a portion of any prepaid special assessments that are not needed to redeem local improvement district bonds; (f) any surplus remaining in any reserve fund established for local improvement district bonds after the bonds have been redeemed; (g) other moneys legally available for such purposes; and (h) earnings from investing money in the guaranty fund. Where applicable, the local government may bind and obligate itself to establish, collect, and maintain utility system rates and charges at such levels to provide revenues sufficient to maintain the guaranty fund.

(2) Whenever any local improvement district bond matures that is guaranteed by a guaranty fund, or an interest payment is due, and there is insufficient money in the appropriate local improvement district bond redemption fund to make principal and interest payments on the local improvement district bonds, the treasurer shall make the payments by the guaranty fund by issuing and delivering a warrant drawn upon the local improvement guaranty fund.

(3) The local government may issue warrants against the guaranty fund, drawing interest at a rate it determines, to meet any liability accrued against the guaranty fund whenever the cash balance in the local improvement guaranty fund is insufficient for the required purposes. Interest bearing warrants must be issued upon demand of the owners of any local improvement district bonds eligible for such payments that are guaranteed by this section and section 50 of this act, or to pay for any certificates of delinquency for a delinquent installment or installments of special assessments as provided in subsection (4) of this section. Guaranty fund warrants shall be a first lien in their order of issuance upon money deposited into the guaranty fund.

(4) Within ten days after the date of delinquency of any installment of a special assessment imposed for the purpose of paying the local improvement bonds of any local government guaranteed under this section and section 50 of this act, the local government treasurer shall compile a statement of all installments delinquent, together with the amount of accrued interest and penalty appurtenant to each of those installments. The treasurer shall immediately purchase certificates of delinquency for all such delinquent installments. Payment for all such certificates of delinquency shall be made from the local improvement guaranty fund, and if there is insufficient money in the fund to pay for such certificates of delinquency, the treasurer shall accept the local improvement guaranty fund warrants in payment for the certificates of delinquency. All such certificates of delinquency shall be issued in the name of the local improvement guaranty fund, and all guaranty fund warrants issued in payment of the certificates of delinquency shall be issued in the name of the appropriate local improvement district fund. Whenever any market is available and the governing body so directs, the treasurer shall sell any certificates of delinquency belonging to the local improvement guaranty fund, but any such sale may not be for less than face value thereof plus accrued interest from the date of issuance to date of sale.

Certificates of delinquency shall be issued by the treasurer, bearing a rate of interest per annum determined by the treasurer but not exceeding twelve percent, shall be in each instance for the face value of the delinquent installment, plus accrued interest to date of issuance of the certificate of delinquency, plus a penalty of five percent of such face value, and shall set forth:

(a) The description of the real property assessed;

(b) The date the installment of the special assessment became delinquent; and

A certificate of delinquency may be redeemed by the owners of the real property assessed at any time up to one year from the date of foreclosing the certificate of delinquency.

If any certificate of delinquency is not redeemed by the first day of January after its issuance, the treasurer shall then proceed to foreclose the certificate of delinquency in the manner specified in this chapter for the foreclosure of special assessment liens. The treasurer shall execute and deliver a deed conveying fee simple title to the real property described in the foreclosed certificate of delinquency if the certificate of delinquency is not redeemed within the succeeding year.

NEW SECTION. Sec. 46. LOCAL IMPROVEMENT DISTRICT GUARANTY FUND, PAYMENTS. Whenever there is paid out of a guaranty fund any amount on account of the principal of or interest on a local improvement district bond, or on account of purchase of certificates of delinquency, the local government, as trustee for the fund, shall be subrogated to all rights of the owner of the bond relating to the payments made to the owner of the bond and all rights of the owner of the bond on the special assessment or special assessments underlying the same, which shall become a part of the guaranty fund. As among the several issues of local improvement district bonds guaranteed by the guaranty fund, no preference exists, but interest or principal payments shall be made from the guaranty fund to prevent default and may be made in advance of default to the extent that installments are delinquent.

Money from a guaranty fund may be used to purchase real property at county tax foreclosure sales or from the county after foreclosure in cases where the real property is subject to unpaid special assessments securing bonds guaranteed under sections 45 and 50 of this act if the governing body of the local government determines that the purchase is necessary to protect the guaranty fund. In such cases the fund shall be subrogated to all rights of the local government. After so acquiring title to real property, the local government as trustee of the guaranty fund may lease or resell and convey the real property in the manner that the local government's real property is authorized to be leased or resold and for such prices and on such terms as may be determined by resolution of the governing body.

NEW SECTION. Sec. 47. LID GUARANTY FUND, CASH BALANCES. The governing body of a local government may transfer money from its local improvement bond guaranty fund to its general or current expense fund if an amount of money is retained in the guaranty fund equal to at least ten percent of value of outstanding local improvement district bonds that are guaranteed by the guaranty fund and the governing body makes written findings that the remaining money in the guaranty fund is reasonably sufficient to protect:

(1) The outstanding local improvement district bonds that are guaranteed by the guaranty fund; and

(2) Any additional local improvement district bonds that will be guaranteed by the guaranty fund that the local government anticipates issuing in the succeeding year.

NEW SECTION. Sec. 48. RESERVE FUNDS. The governing body of a local government issuing local improvement district bonds financing a single local improvement district may create a reserve fund to secure the payment of the principal of and interest on these bonds that is in addition to the local improvement district bond guaranty fund established under section 45 of this act. A reserve fund may not exceed fifteen percent of the principal amount of the bonds. The reserve fund may be provided for from the proceeds of the local improvement district bonds, from special assessment payments, or from any other money legally available for such purposes.

After the payment of administrative costs, a sum in proportion to the ratio between the part of the original special assessment against a given lot, tract, or parcel of real property in a local improvement district assessed to create a reserve fund, if any, and the total original amount of such special assessment, plus a proportionate share of any interest accrued in the reserve fund, shall be credited and applied, respectively, to any nondelinquent portion of the principal of that assessment and any nondelinquent installment interest on that assessment paid by a property owner, but in no event may the principal amount of bonds outstanding exceed the principal amount of assessments outstanding. Whether the payment is made during the prepayment period provided for in section 23 of this act or after the prepayment period and whenever all or part of a remaining nondelinquent assessment or any nondelinquent installment payment of principal and interest is paid, the reserve fund balance shall be reduced accordingly as each such sum is thus credited and applied to a nondelinquent principal payment and a nondelinquent interest payment. Each payment of a nondelinquent assessment or any nondelinquent installment payment of principal and interest shall be reduced by the amount of the credit.

The balance of a reserve fund remaining after payment in full and retirement of all local improvement bonds secured by the fund shall be transferred to the local government's guaranty fund.

NEW SECTION. Sec. 49. JOINT PROJECTS. A local government may contract with any other local government, or with the state of Washington, for the following purposes:

(1) To have the acquisition or construction of the whole or any part of the public improvements performed by another local government or by the state of Washington;

(2) To pay, from special assessments on real property within a local improvement district or from the proceeds of local improvement district bonds, the whole or any part of the expense of the public improvements ordered, constructed, acquired, or owned by another local government; or

(3) To integrate the planning, financing, construction, acquisition, management, or operation, or any combination thereof, of the public improvements of one local government with the planning, financing, construction, acquisition, management, or operation, or any combination thereof, of the public improvements of another local government or the state on such terms and conditions as may be agreed upon mutually including, but not limited to, the allocation of the costs of the public improvements and the allocation of planning, financing, construction, management, operation, or other responsibilities.

NEW SECTION. Sec. 50. LID BONDS, GENERALLY. A new section is added to chapter 39.46 RCW to read as follows:

(1) Local improvement district bonds issued by local governments under the authorities provided by chapter 39.‑- RCW (sections 1 through 49 of this act) shall be subject to this section. The maximum term of local improvement district bonds shall be the lesser of thirty years or the estimated average economic life of the public improvements financed by the local improvement district bonds, as determined by the governing body.

Whenever local improvement district bonds are proposed to be issued, the governing body of the local government shall create a special local improvement fund for the local improvement district from which all or a portion of the costs of the public improvements shall be paid. Local improvement district bonds shall not be issued in excess of the amount of unpaid special assessments after the prepayment period for the payment of special assessments without interest, penalties, or costs and the amount of the paid special assessments that will be deposited into a reserve fund. Local improvement district bonds shall not be issued prior to ten days after the prepayment period for the payment of special assessments without interest, penalties, or costs.

Local improvement district bonds shall be payable exclusively from the local improvement fund, the local improvement bond guaranty fund that the local government creates under section 45 of this act, and a separate reserve fund or other security for the payment of principal and interest as provided in section 48 of this act.

(2) Local improvement district bonds shall not constitute a general indebtedness of the local government issuing the bonds nor an obligation, general or special, of the state. The owner of any local improvement district bond shall not have any claim for the payment thereof against the local government that issues the local improvement district bonds except for payment from the special assessments made for the public improvements for which the local improvement district bond was issued, from proceeds of additional local improvement district bonds that may be issued and sold to finance the public improvements, from the local improvement guaranty fund, and from a reserve fund or other security if created under section 49 of this act. The local government shall not be liable to the owner of any local improvement district bond for any loss to the local improvement guaranty fund occurring in the lawful operation of the fund. The owner of a local improvement district bond shall not have any claim against the state arising from the local improvement district bond, special assessments, or the operation of the guaranty fund or a reserve fund. Tax revenues shall not be used directly or indirectly to pay, secure, or guarantee the payment of the principal of or interest on local improvement district bonds.

The substance of the limitations included in this subsection shall be plainly printed, written, engraved, or reproduced: (a) On each local improvement district bond that is a physical instrument; (b) in each published notice offering local improvement district bonds for sale; and (c) in each disclosure statement of the local government that is associated with those local improvement district bonds.

(3) If the local government fails to make any principal or interest payments on any local improvement district bond or to collect promptly any special assessment, or installment or installments, securing the bonds when due, the owner of the local improvement district bond may obtain a writ of mandamus from any court of competent jurisdiction requiring the local government to collect the special assessment or installments, foreclose on the related lien, and make payments out of the local improvement fund, guaranty fund, or reserve fund if one exists. Any number of owners of local improvement district bonds may join as plaintiffs.

NEW SECTION. Sec. 51. A new section is added to chapter 35.21 RCW to read as follows:

A city or town may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures contained in chapters 35.43 through 35.54 RCW concerning local improvement districts, special assessments, and local improvement district bonds, or utility local improvement districts, special assessments, and revenue bonds payable in part from special assessments.

NEW SECTION. Sec. 52. A new section is added to chapter 35.58 RCW to read as follows:

A metropolitan municipal corporation may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in RCW 35.58.500 concerning local improvement districts, special assessments, and local improvement district bonds, or utility local improvement districts, special assessments, and revenue bonds payable in part from special assessments.

NEW SECTION. Sec. 53. A new section is added to chapter 36.69 RCW to read as follows:

A park and recreation district may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in RCW 36.69.200 through 36.69.305 concerning local improvement districts, special assessments, and local improvement district bonds.

NEW SECTION. Sec. 54. A new section is added to chapter 36.73 RCW to read as follows:

A transportation benefit district may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in RCW 36.73.080 concerning local improvement districts, special assessments, and local improvement district bonds.

NEW SECTION. Sec. 55. A new section is added to chapter 36.83 RCW to read as follows:

A service district may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in RCW 36.83.050 concerning local improvement districts, special assessments, and local improvement district bonds.

NEW SECTION. Sec. 56. A new section is added to chapter 36.88 RCW to read as follows:

NEW SECTION. Sec. 57. A new section is added to chapter 36.94 RCW to read as follows:

A county may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in this chapter concerning local improvement districts, special assessments, and local improvement district bonds, or utility local improvement districts, special assessments, and revenue bonds payable in part from special assessments.

NEW SECTION. Sec. 58. A new section is added to chapter 52.20 RCW to read as follows:

A fire protection district may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in this chapter concerning local improvement districts, special assessments, and local improvement district bonds.

NEW SECTION. Sec. 59. A new section is added to chapter 53.08 RCW to read as follows:

A port district may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in RCW 53.08.050 concerning local improvement districts, special assessments, and local improvement district bonds.

NEW SECTION. Sec. 60. A new section is added to chapter 54.16 RCW to read as follows:

A public utility district may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in RCW 54.16.120 through 54.16.170 concerning local utility districts, special assessments, and local improvement district bonds.

NEW SECTION. Sec. 61. A new section is added to chapter 56.20 RCW to read as follows:

A sewer district may conform with the provisions of chapter 39.‑- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in this chapter concerning utility local improvement districts, special assessments, and revenue bonds payable in part from special assessments.

NEW SECTION. Sec. 62. A new section is added to chapter 57.16 RCW to read as follows:

A water district may conform with the provisions of chapter 39.‑- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in this chapter and RCW 57.20.030 through 57.20.090 concerning local improvement districts, special assessments, and local improvement district bonds, or utility local improvement districts, special assessments, and revenue bonds payable in part from special assessments.

NEW SECTION. Sec. 63. A new section is added to chapter 87.03 RCW to read as follows:

An irrigation district may conform with the provisions of chapter 39.-- RCW (sections 1 through 49 of this act) and section 50 of this act as an alternative to the procedures authorized in RCW 87.03.480 through 87.03.527 concerning local improvement districts, special assessments, and local improvement district bonds.

NEW SECTION. Sec. 64. HEADINGS. Section headings as used in this act do not constitute any part of the law.

NEW SECTION. Sec. 65. CODIFICATION. Sections 1 through 49 of this act shall constitute a new chapter in Title 39 RCW.