"NEW SECTION.  Sec. 1   The legislature finds that ambulance and emergency medical services are essential services and the availability of these services is vital to preserving and promoting the health, safety, and welfare of people in local communities throughout the state. All persons, businesses, and industries benefit from the availability of ambulance and emergency medical services, and survival rates can be increased when these services are available, adequately funded, and appropriately regulated. It is the legislature's intent to explicitly recognize local jurisdictions' ability and authority to collect utility service charges to fund ambulance and emergency medical service systems that are based, at least in some part, upon a charge for the availability of these services.

Sec. 2   RCW 35.21.766 and 2004 c 129 s 34 are each amended to read as follows:
     (1) Whenever a regional fire protection service authority ((or the legislative authority of any city or town)) determines that the fire protection jurisdictions that are members of the authority ((or the city or town or a substantial portion of the city or town is)) are not adequately served by existing private ambulance service, the governing board of the authority may by resolution((, or the legislative authority of the city or town may by appropriate legislation,)) provide for the establishment of a system of ambulance service to be operated by the authority as a public utility ((of the city or town, or)) operated by contract after a call for bids.
     (2) The legislative authority of any city or town may establish an ambulance service to be operated as a public utility. However, the legislative authority of the city or town shall not provide for the establishment of an ambulance service utility that would compete with any existing private ambulance service, unless the legislative authority of the city or town determines that the city or town, or a substantial portion of the city or town, is not adequately served by an existing private ambulance service. In determining the adequacy of an existing private ambulance service, the legislative authority of the city or town shall take into consideration objective generally accepted medical standards and reasonable levels of service which shall be published by the city or town legislative authority. When it is preliminarily concluded that the private ambulance service is inadequate, before issuing a call for bids or before the city or town establishes an ambulance service utility, the legislative authority of the city or town shall allow a minimum of sixty days for the private ambulance service to meet the generally accepted medical standards and reasonable levels of service.
     (3) The city or town legislative authority is authorized to set and collect rates and charges in an amount sufficient to regulate, operate, and maintain an ambulance utility. Prior to setting such rates and charges, the legislative authority must determine, through a cost-of-service study, the total cost necessary to regulate, operate, and maintain the ambulance utility. Total costs shall not include capital cost for the construction, major renovation, or major repair of the physical plant. For purposes of establishing and setting rates and charges under this section, costs shall be reduced by any revenues collected and described in subsection (5)(a) through (c) of this section. Once the legislative authority determines the total costs, the legislative authority shall then identify that portion of the total costs that are attributable to the availability of the ambulance service and that portion of the total costs that are attributable to the demand placed on the ambulance utility.
     (a) Availability costs are those costs attributable to the basic infrastructure needed to respond to a single call for service within the utility's response criteria. Availability costs may include costs for dispatch, labor, training of personnel, equipment, patient care supplies, and maintenance of equipment.
     (b) Demand costs are those costs that are attributable to the burden placed on the ambulance service by individual calls for ambulance service. Demand costs shall include costs related to frequency of calls, distances from hospitals, and other factors identified in the cost-of-service study conducted to assess burdens imposed on the ambulance utility.
     (c) Beginning on the effective date of this act, the rate attributable to costs for availability described under (a) of this subsection shall be uniformly applied across user classifications within the utility.
     (d) Beginning on the effective date of this act, the rate attributable to costs for demand, described under (b) of this subsection, shall be established and billed to each utility user classification based on each user classification's burden on the ambulance utility.
     (e) The fee charged by the utility shall reflect a combination of the availability cost and the demand cost.
     (4) The combined rates charged shall reflect an exemption for persons who are medicaid eligible and reside in a nursing facility, boarding home, or adult family home, and shall reflect an exemption or reduction for designated classes consistent with Article VIII, section 7 of the state Constitution. The amounts of exemption or reduction shall be a general expense of the utility, and designated as an availability cost, to be spread uniformly across the utility user classifications.
     (5) In each city or town operating an ambulance utility pursuant to this section:
     (a) The legislative authority must continue to allocate at least ninety percent of the total amount of general fund revenues expended, as of May 6, 2004, toward the total costs necessary to regulate, operate, and maintain the ambulance utility.
     However, cities or towns that operated an ambulance service as a public utility as of May 6, 2004, and commingled general fund dollars and ambulance service utility dollars, may reasonably estimate that portion of general fund dollars that were, as of that date, applied toward the operation of the ambulance service utility, and at least ninety percent of such estimated amount must then continue to be applied toward the total cost necessary to regulate, operate, and maintain the ambulance utility.
     (b) The legislative authority must allocate available emergency medical service levy funds towards the total costs necessary to regulate, operate, and maintain the ambulance utility.
     (c) The legislative authority must allocate all revenues received through direct billing to the individual user of the ambulance service to the demand-related costs under subsection (3)(b) of this section.
     (d) The total revenue generated by the rates and charges shall not exceed the total costs necessary to regulate, operate, and maintain an ambulance utility.
     (e) Revenues generated by the rates and charges must be deposited in a separate fund or funds and be used only for the purpose of paying for the cost of regulating, maintaining, and operating the ambulance utility.
     (6) Ambulance service rates charged pursuant to this section do not constitute taxes or charges under RCW 82.02.050 through 82.02.090, or RCW 35.21.768, or charges otherwise prohibited by law."