6505-S.E

AN ACT Relating to clarifying and harmonizing provisions in Titles 35 and 41 RCW; amending RCW 35.02.130, 35.02.180, 35.07.040, 35.13A.070, 35.13A.080, 35.27.070, and 41.04.190; adding a new section to chapter 35.23 RCW; adding a new section to chapter 35.13A RCW; and repealing RCW 35.07.030, 35.17.160, 35.23.390, and 35.23.400.

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

NEW SECTION. Sec. 1. A new section is added to chapter 35.23 RCW to read as follows:

No person shall be eligible to or hold an elective office in a city unless the person is a resident and registered voter therein.

Sec. 2. RCW 35.02.130 and 1994 c 154 s 308 are each amended to read as follows:

The city or town officially shall become incorporated at a date from one hundred eighty days to three hundred sixty days after the date of the election on the question of incorporation. An interim period shall exist between the time the newly elected officials have been elected and qualified and this official date of incorporation. During this interim period, the newly elected officials are authorized to adopt ordinances and resolutions which shall become effective on or after the official date of incorporation, and to enter into contracts and agreements to facilitate the transition to becoming a city or town and to ensure a continuation of governmental services after the official date of incorporation. Periods of time that would be required to elapse between the enactment and effective date of such ordinances, including but not limited to times for publication or for filing referendums, shall commence upon the date of such enactment as though the city or town were officially incorporated.

During this interim period, the city or town governing body may adopt rules establishing policies and procedures under the state environmental policy act, chapter 43.21C RCW, and may use these rules and procedures in making determinations under the state environmental policy act, chapter 43.21C RCW.

During this interim period, the newly formed city or town and its governing body shall be subject to the following as though the city or town were officially incorporated: RCW 4.24.470 relating to immunity; chapter 42.17 RCW relating to open government; chapter 40.14 RCW relating to the preservation and disposition of public records; chapters 42.20 and 42.23 RCW relating to ethics and conflicts of interest; chapters 42.30 and 42.32 RCW relating to open public meetings and minutes; RCW 35.22.288, ((~~35.23.310, 35.24.220~~)) 35.23.221, 35.27.300, 35A.12.160, as appropriate, and chapter 35A.65 RCW relating to the publication of notices and ordinances; RCW 35.21.875 and 35A.21.230 relating to the designation of an official newspaper; RCW 36.16.138 relating to liability insurance; RCW 35.22.620, 35.23.352, and 35A.40.210, as appropriate, and statutes referenced therein relating to public contracts and bidding; and chapter 39.34 RCW relating to interlocal cooperation. Tax anticipation or revenue anticipation notes or warrants and other short-term obligations may be issued and funds may be borrowed on the security of these instruments during this interim period, as provided in chapter 39.50 RCW. Funds also may be borrowed from federal, state, and other governmental agencies in the same manner as if the city or town were officially incorporated.

RCW 84.52.020 and 84.52.070 shall apply to the extent that they may be applicable, and the governing body of such city or town may take appropriate action by ordinance during the interim period to adopt the property tax levy for its first full calendar year following the interim period.

The governing body of the new city or town may acquire needed facilities, supplies, equipment, insurance, and staff during this interim period as if the city or town were in existence. An interim city manager or administrator, who shall have such administrative powers and duties as are delegated by the governing body, may be appointed to serve only until the official date of incorporation. After the official date of incorporation the governing body of such a new city organized under the council manager form of government may extend the appointment of such an interim manager or administrator with such limited powers as the governing body determines, for up to ninety days. This governing body may submit ballot propositions to the voters of the city or town to authorize taxes to be collected on or after the official date of incorporation, or authorize an annexation of the city or town by a fire protection district or library district to be effective immediately upon the effective date of the incorporation as a city or town.

The boundaries of a newly incorporated city or town shall be deemed to be established for purposes of RCW 84.09.030 on the date that the results of the initial election on the question of incorporation are certified or the first day of January following the date of this election if the newly incorporated city or town does not impose property taxes in the same year that the voters approve the incorporation.

The newly elected officials shall take office immediately upon their election and qualification with limited powers during this interim period as provided in this section. They shall acquire their full powers as of the official date of incorporation and shall continue in office until their successors are elected and qualified at the next general municipal election after the official date of incorporation: PROVIDED, That if the date of the next general municipal election is less than twelve months after the date of the first election of councilmembers, those initially elected councilmembers shall serve until their successors are elected and qualified at the next following general municipal election as provided in RCW 29.04.170. For purposes of this section, the general municipal election shall be the date on which city and town general elections are held throughout the state of Washington, pursuant to RCW 29.13.020.

In any newly incorporated city that has adopted the council-manager form of government, the term of office of the mayor, during the interim period only, shall be set by the council, and thereafter shall be as provided by law.

The official date of incorporation shall be on a date from one hundred eighty to three hundred sixty days after the date of the election on the question of incorporation, as specified in a resolution adopted by the governing body during this interim period. A copy of the resolution shall be filed with the county legislative authority of the county in which all or the major portion of the newly incorporated city or town is located. If the governing body fails to adopt such a resolution, the official date of incorporation shall be three hundred sixty days after the date of the election on the question of incorporation. The county legislative authority of the county in which all or the major portion of the newly incorporated city or town is located shall file a notice with the county assessor that the city or town has been authorized to be incorporated immediately after the favorable results of the election on the question of incorporation have been certified. The county legislative authority shall file a notice with the secretary of state that the city or town is incorporated as of the official date of incorporation.

Sec. 3. RCW 35.02.180 and 1986 c 234 s 17 are each amended to read as follows:

The ownership of all county roads located within the boundaries of a newly incorporated city or town shall revert to the city or town and become streets as of the official date of incorporation. However, any special assessments attributable to these county roads shall continue to exist and be collected as if the incorporation had not occurred. Property within the newly incorporated city or town shall continue to be subject to any indebtedness attributable to these roads and any related property tax levies.

The territory included within the newly incorporated city or town shall be removed from the road district as of the official date of incorporation. The territory included within the newly incorporated city or town shall be removed from a fire protection district or districts or library district or districts in which it was located, as of the official date of incorporation, unless the fire protection district or districts have annexed the city or town during the interim period as provided in RCW ((~~52.04.160 through 52.04.200~~)) 52.04.061 through 52.04.101, or the library district or districts have annexed the city or town during the interim period as provided in RCW ((~~27.12.260 through 27.12.290~~)) 27.12.360 through 27.12.395.

The ownership of all assets and liabilities of any park and recreation district created and governed under the provisions of chapter 36.69 RCW that is located wholly within the newly incorporated city or town shall, upon adoption of a resolution by the council of the newly incorporated city or town, revert to the city or town and become assets and liabilities of the city or town as of the official date of incorporation. However, any special assessments attributable to the park and recreation district shall continue to exist and be collected as if the incorporation had not occurred. Property that was within the boundaries of the park and recreation district shall continue to be subject to any indebtedness attributable to the park and recreation district and any related property tax levies.

Sec. 4. RCW 35.07.040 and 1965 c 7 s 35.07.040 are each amended to read as follows:

((~~If the applicable census shows a population of less than four thousand~~)) Upon receipt of a valid petition for disincorporation, the council shall cause an election to be called upon the proposition of disincorporation. If the city or town has any indebtedness or outstanding liabilities, it shall order the election of a receiver at the same time.

NEW SECTION. Sec. 5. A new section is added to chapter 35.13A RCW to read as follows:

Whenever the board of commissioners of a water district or sewer district has determined by resolution that it is in the best interests of the district for a city to assume jurisdiction of the district, whether or not any of the territory or assessed valuation of the district is included within the corporate boundaries of the city, and the city legislative body has determined to assume jurisdiction of the district, the district and the city shall enter into a contract pursuant to RCW 35.13A.070, acceptable to both the district and the city, to carry out such assumption. The contract shall provide for the transfer to the city of all real and personal property, franchises, rights, assets, taxes levied but not collected for the district for other than indebtedness, water and sewer lines, and all other facilities and equipment of the district, which transfers shall be subject to all financial, statutory, or contractual obligations of the district for the security or performance of which such property may have been pledged. Such city in addition to its other powers, shall have the power to manage, control, maintain, and operate such property, facilities, and equipment and to fix and collect service and other charges from owners and occupants of properties so served by the city, subject, however, to any outstanding indebtedness, bonded or otherwise, of the district payable from taxes, assessments, or revenues of any kind or nature and to any other contractual obligations of the district including but not limited to the provisions of the contract entered into by such city and the district pursuant to RCW 35.13A.070.

Pursuant to such contract, the city may assume the obligation of paying such district indebtedness and of levying and of collecting or causing to be collected such district taxes, assessments, and utility rates and charges of any kind or nature to pay and secure the payment of such indebtedness, according to all of the terms, conditions, and covenants incident to such indebtedness, and shall assume and perform all other outstanding contractual obligations of the district in accordance with all of its terms, conditions, and covenants. No such assumption shall be deemed to impair the obligation of any indebtedness or other contractual obligation entered into after the effective date of this act. During the period until the outstanding indebtedness of the district has been discharged, the territory of the district and the owners and occupants of property therein, shall continue to be liable for its and their proportionate share of such indebtedness, including any outstanding assessments levied within any local improvement district or utility local improvement district thereof. The city shall assume the obligation of causing the payment of such indebtedness, collecting such taxes, assessments, and charges, and observing and performing the other district contractual obligations. The legislative body of the city shall act as the officers of the district for the purpose of certifying the amount of any property tax to be levied and collected therein, and causing service and other charges and assessments to be collected from such property or owners or occupants thereof, enforcing such collection, and performing all other acts necessary to ensure performance of the district's contractual obligations.

When a city assumes the obligation of paying the outstanding indebtedness, and if property taxes or assessments have been levied and service and other charges have accrued for such purpose but have not been collected by the district prior to such assumption, the property taxes or assessments when collected shall belong and be paid to the city and be used by such city so far as necessary for payment of the indebtedness of the district existing and unpaid on the date such city elects to assume the indebtedness. Any funds received by the city that have been collected for the purpose of paying any bonded or other indebtedness of the district, shall be used for the purpose for which they were collected and for no other purpose. Any outstanding indebtedness shall be paid as provided in the bond covenants. All funds of the district on deposit with the county treasurer at the time of title transfer shall be used by the city solely for the benefit of the utility and shall not be transferred to or used for the benefit of the city's general fund.

Sec. 6. RCW 35.13A.070 and 1971 ex.s. c 95 s 7 are each amended to read as follows:

Notwithstanding any provision of this chapter to the contrary, one or more cities and one or more water districts or sewer districts may, through their legislative authorities, authorize a contract with respect to the rights, powers, duties, and obligation of such cities, or districts with regard to the use and ownership of property, the providing of services, the maintenance and operation of facilities, allocation of cost, financing, and construction of new facilities, application and use of assets, disposition of liabilities and debts, the performance of contractual obligations, and any other matters arising out of the inclusion, in whole or in part, of the district or districts within any city or cities or the assumption by a city of jurisdiction of a district pursuant to section 5 of this act. The contract may provide for the furnishing of services by any party thereto and the use of city or district facilities or real estate for such purpose, and may also provide for the time during which such district or districts may continue to exercise any rights, privileges, powers, and functions provided by law for such district or districts as if the district or districts or portions thereof were not included within a city or subject to an assumption of jurisdiction pursuant to section 5 of this act, including but not by way of limitation, the right to promulgate rules and regulations, to levy and collect special assessments, rates, charges, service charges, and connection fees, ((~~and~~)) to adopt and carry out the provisions of a comprehensive plan, and amendments thereto, for a system of improvements, and to issue general obligation bonds or revenue bonds in the manner provided by law. The contract may provide for the transfer to a city of district facilities, property, rights, and powers as provided in RCW 35.13A.030 ((~~and~~)), 35.13A.050, and section 5 of this act, whether or not sixty percent or any of the area or assessed valuation of real estate lying within the district or districts is included within such city. The contract may provide that any party thereto may authorize, issue, and sell revenue bonds to provide funds for new water or sewer improvements or to refund any water revenue, sewer revenue, or combined water and sewer revenue bonds outstanding of any city((,)) or district ((~~which~~)) that is a party to such contract if such refunding is deemed necessary, providing such refunding will not increase interest costs. The contract may provide that any party thereto may authorize and issue, in the manner provided by law, general obligation or revenue bonds of like amounts, terms, conditions, and covenants as the outstanding bonds of any other party to the contract, and such new bonds may be substituted or exchanged for such outstanding bonds: PROVIDED, That no such exchange or substitution shall be effected in such a manner as to impair the obligation or security of any such outstanding bonds.

Sec. 7. RCW 35.13A.080 and 1971 ex.s. c 95 s 8 are each amended to read as follows:

In any of the cases provided for in RCW 35.13A.020, 35.13A.030, ((~~and~~)) 35.13A.050, and section 5 of this act, and notwithstanding any other method of dissolution provided by law, dissolution proceedings may be initiated by either the city or the district, or both, when the legislative body of the city and the governing body of the district agree to, and petition for, dissolution of the district.

The petition for dissolution shall be signed by the chief administrative officer of the city and the district, upon authorization of the legislative body of the city and the governing body of the district((,)) respectively, and such petition shall be presented to the superior court of the county in which the city is situated.

If the petition is thus authorized by both the city and district, and title to the property, facilities, and equipment of the district has passed to the city pursuant to action taken under this chapter, all indebtedness and local improvement district or utility local improvement district assessments of the district have been discharged or assumed by and transferred to the city, and the petition contains a statement of the distribution of assets and liabilities mutually agreed upon by the city and the district and a copy of the agreement between such city and the district is attached thereto, a hearing shall not be required and the court shall, if the interests of all interested parties have been protected, enter an order dissolving the district.

In any of the cases provided for in RCW 35.13A.020 ((~~and~~)), 35.13A.030, and section 5 of this act, if the petition for an order of dissolution is signed on behalf of the city alone or the district alone, or there is no mutual agreement on the distribution of assets and liabilities, the superior court shall enter an order fixing a hearing date not less than sixty days from the day the petition is filed, and the clerk of the court of the county shall give notice of such hearing by publication in a newspaper of general circulation in the district once a week for three successive weeks and by posting in three public places in the district at least twenty-one days before the hearing. The notice shall set forth the filing of the petition, its purposes, and the date and place of hearing thereon.

After the hearing the court shall enter its order with respect to the dissolution of the district. If the court finds that such district should be dissolved and the functions performed by the city, the court shall provide for the transfer of assets and liabilities to the city. The court may provide for the dissolution of the district upon such conditions as the court may deem appropriate. A certified copy of the court order dissolving the district shall be filed with the county auditor. If the court does not dissolve the district, it shall state the reasons for declining to do so.

Sec. 8. RCW 35.27.070 and 1993 c 47 s 2 are each amended to read as follows:

The government of a town shall be vested in a mayor and a council consisting of five members and a treasurer, all elective; the mayor shall appoint a clerk and a marshal; and may appoint a town attorney, pound master, street superintendent, a civil engineer, and such police and other subordinate officers and employees as may be provided for by ordinance. All appointive officers and employees shall hold office at the pleasure of the mayor, subject to any applicable law, rule, or regulation relating to civil service, and shall not be subject to confirmation by the town council.

Sec. 9. RCW 41.04.190 and 1992 c 146 s 13 are each amended to read as follows:

The cost of a policy or plan to a public agency or body is not additional compensation to the employees or elected officials covered thereby. The elected officials to whom this section applies include but are not limited to commissioners elected under chapters 28A.315, 52.14, 53.12, 54.12, 56.12, 57.12, 70.44, and 87.03 RCW, as well as any county elected officials who are provided insurance coverage under RCW 41.04.180 and those city officials elected under chapters 35.22, 35.23, 35.27, 35A.12, and 35A.13 RCW. Any officer authorized to disburse such funds may pay in whole or in part to an insurance carrier or health care service contractor the amount of the premiums due under the contract.

NEW SECTION. Sec. 10. The following acts or parts of acts are each repealed:

(1) RCW 35.07.030 and 1965 c 7 s 35.07.030;

(2) RCW 35.17.160 and 1965 c 7 s 35.17.160;

(3) RCW 35.23.390 and 1965 c 7 s 35.23.390; and

(4) RCW 35.23.400 and 1965 c 7 s 35.23.400.