BP BHEAD INT H [atlas:bill]

AN ACT Relating to the merger of water-sewer districts into cities; amending RCW 35.13A.070, 36.93.090, and 36.93.105; adding a new chapter to Title 35 RCW; creating a new section; recodifying RCW 35.13A.010, 35.13A.070, 35.13A.090, and 35.13A.100; and repealing RCW 35.13A.020, 35.13A.030, 35.13A.0301, 35.13A.040, 35.13A.050, 35.13A.060, 35.13A.080, and 35.13A.900.

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

NEW SECTION. Sec. 1. (1) Whenever a district and all of the cities in which any portion of the district's territory is located agree that the district or any portion thereof shall be merged into the city or cities, the district and the city or cities shall enter into an agreement providing for the merger.

(2) Unless the agreement provides otherwise, on the effective date of the merger as established in the agreement:

(a) All of the funds and other property, real and personal, of the district shall vest in and become the property of the city or cities, in the proportion stated in the agreement, subject to all financial, statutory, or contractual obligations of the district for the security or performance of which the property may have been pledged; and

(b) Any outstanding indebtedness of any form, owed by the district, shall remain the obligation of the area of the district. The city or cities shall take all actions necessary to fulfill any obligation assumed by the city or cities, and shall make such levies, assessments, or charges for service upon such area or the users of service in the area as necessary to pay such indebtedness at maturity.

(3)(a) Within ten days of the approval of the agreement by the legislative bodies of the district and the city or cities, the legislative bodies shall transmit the agreement to the legislative authority of each county in which the district is located, the department of health, and the department of ecology. Within sixty days of the transmission of the agreement, the legislative authority of each county in which the district is located shall fix a time and place for a hearing on the merger. Notice of the hearing shall be published at least once a week for two consecutive weeks in a newspaper of general circulation in the district. The notice shall state or depict the boundaries of the portion of the district proposed to be merged into the city or cities.

(b) The district and the city or cities shall submit information to the county legislative authority establishing that the proposed merger agreement is in the best interests of public health and general welfare, based on factors including but not limited to: (i) Topography, drainage basins, and other engineering or operational concerns; (ii) water rights and supplies; (iii) employee concerns; (iv) compliance with chapter 36.70A RCW; (v) comprehensive plans and county-wide planning policies adopted under chapter 36.70A RCW, and other regional policies; (vi) the likelihood of significant growth in the area and probable need for utility services in the next ten years; (vii) the probable effect of the proposal on cost and adequacy of utility services in the area; (viii) the effect of the proposal on the finances, debt structure, and contractual obligations and rights of all affected governmental units; and (ix) any applicable service agreements or interlocal annexation agreements. Prior to the hearing, the department of health shall review the proposed merger agreement and provide comments to the county legislative authority on the proposed agreement. Prior to the hearing, the department of ecology shall review the proposed merger agreement and provide comments to the county legislative authority on the impact, if any, of the proposed agreement on water rights.

(c) Upon conclusion of the hearing, the county legislative authority shall pass an ordinance that either approves or disapproves the proposed merger agreement, or remands the proposed agreement to the district and the city or cities to further address identified issues. If the district is located in more than one county, the legislative authorities of all of the counties in which the district is located must approve the proposed agreement. If a county legislative authority does not pass an ordinance that either approves, disapproves, or remands the proposed agreement within one hundred twenty days of the transmission of the agreement to the county, the county legislative authority shall be deemed to have approved the proposed agreement.

(4) If the legislative bodies of the district and the city or a majority of the cities agree, as an alternative to obtaining the approval of the proposed merger agreement by the county legislative authority under subsection (3) of this section, the district and the city or cities shall submit the approval of the proposed agreement to the voters of the district at the next special or general election. Notice of the election shall be given and the election conducted in accordance with general election laws. If at such election the majority of the voters in the district vote in favor of the proposed agreement, the county canvassing board shall so declare and upon the return of the election the proposed agreement shall be approved.

(5) The ordinance of the county legislative authority under subsection (3) of this section shall not take effect for thirty days from the date of final passage, during which time the ordinance shall be subject to referendum by the registered voters of the district. The number of registered voters necessary to sign any referendum petition under this section shall be ten percent of the total number of registered voters within the district on the date of the last general election within the district. The power of referendum shall be exercised in the manner set forth in RCW 35.17.240 and 35.17.250.

(6) Should the referendum submitted to the registered voters of the district under subsection (5) of this section be approved by a majority of the votes cast, the ordinance approving the merger shall be invalid and no further merger proposal concerning the district, or portion thereof subject to the merger proposal, may be submitted to the county legislative authority for a period of two years following the certification of the referendum election.

NEW SECTION. Sec. 2. (1) Whenever a district or a city proposes that all or a portion of the district be merged into the city, and the district and all of the cities in which any portion of the district's territory is located do not agree to the merger or any of the terms or conditions of the merger, the issue of the proposed merger shall be determined by the legislative authority of each county in which any portion of the district is located. The district or any of the cities, or the district and any of the cities, may initiate the county's or counties' consideration of the proposed merger by adopting a resolution or resolutions stating the intent to merge.

(2)(a) The district or the city, or the district and the city or cities, shall submit a certified copy of the resolution or resolutions to the legislative authority of each county in which the district is located. Within sixty days of the submission of the resolution, the legislative authority of each county in which the district is located shall fix a time and place for a hearing on the merger. Notice of the hearing shall be published at least once a week for two consecutive weeks in a newspaper of general circulation in the district. The notice shall state or depict the boundaries of the portion of the district proposed to be merged into the city or cities.

(b) The district and the city or cities into which the district would merge shall each submit to the county legislative authority, the department of health, and the department of ecology a merger proposal, or a proposal for no merger, together with information addressing whether the proposal is in the best interests of the public health and general welfare, based on factors including but not limited to: (i) Topography, drainage basins, and other engineering or operational concerns; (ii) water rights and supplies; (iii) employee concerns; (iv) compliance with chapter 36.70A RCW; (v) comprehensive plans and county-wide planning policies adopted under chapter 36.70A RCW, and other regional policies; (vi) the likelihood of significant growth in the area and probable need for utility services in the next ten years; (vii) the probable effect of the proposal on cost and adequacy of utility services in the area; (viii) the effect of the proposal on the finances, debt structure, and contractual obligations and rights of all affected governmental units; and (ix) any applicable service agreements or interlocal annexation agreements. The city or cities shall provide proof to the county legislative authority that the city's comprehensive plan provides for the merger of the district, or portion thereof, into the city. Prior to the hearing, the department of health shall review the merger proposals and provide comments to the county legislative authority on the proposals. Prior to the hearing, the department of ecology shall review the merger proposals and provide comments to the county legislative authority on each proposal's impact, if any, on water rights.

(c) Upon conclusion of the hearing, the county legislative authority shall pass an ordinance that either approves a merger proposal, approves a merger proposal with modifications, or disapproves all of the merger proposals. The ordinance shall state the effective date of the merger, which shall be no sooner than one hundred twenty days after the effective date of the ordinance. If the county legislative authority determines to approve a merger proposal with modifications, then the legislative authority shall issue a proposed decision, provide the district and the city or cities with no less than thirty days to submit comments on the proposed decision, and, at the request of either the district or a city, reopen the hearing to receive testimony on the proposed decision. If the district is located in more than one county, the legislative authorities of all of the counties in which the district is located must approve a merger proposal in order for the merger to be effective.

(3) If the county ordinance approves a merger proposal and unless the county ordinance provides otherwise:

(a) On the effective date of the merger, all of the funds and other property, real and personal, of the district shall vest in and become the property of the city or cities, in the proportion stated in the county ordinance, subject to all financial, statutory, or contractual obligations of the district for the security or performance of which the property may have been pledged; and

(b) On the effective date of the merger, any outstanding indebtedness of any form, owed by the district, shall remain the obligation of the area of the district. The city or cities shall take all actions necessary to fulfill any obligation assumed by the city or cities, and shall make such levies, assessments, or charges for service upon such area or the users therein as necessary to pay such indebtedness at maturity.

(4) The ordinance of the county legislative authority under subsection (2)(c) of this section shall not take effect for thirty days from the date of final passage, during which time the ordinance shall be subject to referendum by the registered voters of the district. The number of registered voters necessary to sign any referendum petition under this section shall be ten percent of the total number of registered voters within the district on the date of the last general election within the district. The power of referendum shall be exercised in the manner set forth in RCW 35.17.240 and 35.17.250.

(5) Should the referendum submitted to the registered voters of the district under subsection (4) of this section be approved by a majority of the votes cast, the ordinance approving the merger shall be invalid and no further merger proposal concerning the district, or the portion thereof subject to the merger proposal, may be submitted to the county legislative authority for a period of two years following the certification of the referendum election.

Sec. 3. RCW 35.13A.070 and 1997 c 426 s 2 are each amended to read as follows:

Notwithstanding any provision of this chapter to the contrary, one or more cities and one or more 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 the city of jurisdiction of a district under RCW 35.13A.110~~)). 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 were not subject to an assumption of jurisdiction under RCW 35.13A.110~~)), 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, 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, 35.13A.050, and 35.13A.110, 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 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. However, 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. 4. RCW 36.93.090 and 1996 c 230 s 1608 are each amended to read as follows:

Whenever any of the following described actions are proposed in a county in which a board has been established, the initiators of the action shall file within one hundred eighty days a notice of intention with the board: PROVIDED, That when the initiator is the legislative body of a governmental unit, the notice of intention may be filed immediately following the body's first acceptance or approval of the action. The board may review any such proposed actions pertaining to:

(1) The: (a) Creation, incorporation, or change in the boundary, other than a consolidation, of any city, town, or special purpose district; (b) consolidation of special purpose districts, but not including consolidation of cities and towns; or (c) dissolution or disincorporation of any city, town, or special purpose district, except that a board may not review the dissolution or disincorporation of a special purpose district which was dissolved or disincorporated pursuant to the provisions of chapter 36.96 RCW: PROVIDED, That the change in the boundary of a city or town arising from the annexation of contiguous city or town owned property held for a public purpose shall be exempted from the requirements of this section; or

(2) ((~~The assumption by any city or town of all or part of the assets, facilities, or indebtedness of a special purpose district which lies partially within such city or town; or~~

~~(3)~~)) The establishment of or change in the boundaries of a mutual water and sewer system or separate sewer system by a water-sewer district pursuant to RCW 57.08.065 ((~~or chapter 57.40 RCW~~)); or

((~~(4)~~)) (3) The extension of permanent water or sewer service outside of its existing service area by a city, town, or special purpose district. The service area of a city, town, or special purpose district shall include all of the area within its corporate boundaries plus, (a) for extensions of water service, the area outside of the corporate boundaries which it is designated to serve pursuant to a coordinated water system plan approved in accordance with RCW 70.116.050; and (b) for extensions of sewer service, the area outside of the corporate boundaries which it is designated to serve pursuant to a comprehensive sewerage plan approved in accordance with chapter 36.94 RCW and RCW 90.48.110.

Sec. 5. RCW 36.93.105 and 1999 c 153 s 46 are each amended to read as follows:

The following actions shall not be subject to potential review by a boundary review board:

(1) Annexations of territory to a water-sewer district pursuant to RCW 36.94.410 through 36.94.440;

(2) Merger of a water-sewer district, or any portion of a water-sewer district, into a city or town under this act;

(3) Revisions of city or town boundaries pursuant to RCW 35.21.790 or 35A.21.210;

((~~(3)~~)) (4) Adjustments to city or town boundaries pursuant to RCW 35.13.340; and

((~~(4)~~)) (5) Adjustments to city and town boundaries pursuant to RCW 35.13.300 through 35.13.330.

NEW SECTION. Sec. 6. Sections 1 and 2 of this act constitute a new chapter in Title 35 RCW.

NEW SECTION. Sec. 7. RCW 35.13A.010, 35.13A.070, 35.13A.090, and 35.13A.100 are each recodified as sections in the new chapter created in section 6 of this act.

NEW SECTION. Sec. 8. The following acts or parts of acts are each repealed:

(1) RCW 35.13A.020 (Assumption authorized--Disposition of properties and rights--Outstanding indebtedness--Management and control) and 1999 c 153 s 28, 1998 c 326 s 2, & 1971 ex.s. c 95 s 2;

(2) RCW 35.13A.030 (Assumption of control if sixty percent or more of area or valuation within city) and 1999 c 153 s 29 & 1971 ex.s. c 95 s 3;

(3) RCW 35.13A.0301 (Assumption of water-sewer district before July 1, 1999--Limitations) and 1998 c 326 s 3;

(4) RCW 35.13A.040 (Assumption of control if less than sixty percent of area or valuation within city) and 1999 c 153 s 30 & 1971 ex.s. c 95 s 4;

(5) RCW 35.13A.050 (Territory containing facilities within or without city--Duties of city or district--Rates and charges‑-Assumption of responsibility--Outstanding indebtedness--Properties and rights) and 1971 ex.s. c 95 s 5;

(6) RCW 35.13A.060 (District in more than one city--Assumption of responsibilities--Duties of cities) and 1999 c 153 s 31 & 1971 ex.s. c 95 s 6;

(7) RCW 35.13A.080 (Dissolution of water district or sewer district) and 1997 c 426 s 3 & 1971 ex.s. c 95 s 8; and

(8) RCW 35.13A.900 (Severability--1971 ex.s. c 95) and 1971 ex.s. c 95 s 12.

NEW SECTION. Sec. 9. Any contract between a district and a city that relates to the assumption of all or any portion of a district by a city or cities, and that exists on the effective date of this section, shall remain in full force and effect notwithstanding the repeal or amendment of any of the sections in chapter 35.13A RCW by this act.

NEW SECTION. Sec. 10. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.