HOUSE BILL REPORT
EHB 3192
As Passed House:
February 13, 2006
Title: An act relating to reimbursement by property owners for street, road, and water or sewer projects.
Brief Description: Authorizing a contract extension for reimbursement by property owners for street, road, and water or sewer projects.
Sponsors: By Representatives B. Sullivan, Ericks and Sells.
Brief History:
Local Government: 2/1/06 [DP].
Floor Activity:
Passed House: 2/13/06, 98-0.
Brief Summary of Engrossed Bill |
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HOUSE COMMITTEE ON LOCAL GOVERNMENT
Majority Report: Do pass. Signed by 7 members: Representatives Simpson, Chair; Clibborn, Vice Chair; Schindler, Ranking Minority Member; Ahern, Assistant Ranking Minority Member; B. Sullivan, Takko and Woods.
Staff: Thamas Osborn (786-7129).
Background:
Cities, towns, and water-sewer districts are authorized to enter into contracts with developers
and other property owners that create reimbursement procedures for the construction and/or
funding of infrastructure improvements that exceed the scope or capacity necessary for a
particular development or property. Such contracts may pertain to the construction or
improvement of either street projects or water-sewer facilities.
Typically, such contracts involve situations in which a new property development
necessitates the construction of additional infrastructure, and the developer agrees to provide
infrastructure improvements on a scale sufficient to service the current development project
as well as future development that is likely to occur in the area. In return, the contract
provides that the developer will receive pro rata reimbursement from other developers or
property owners who later benefit from the excess capacity provided by the infrastructure
improvements. Such reimbursement agreements are limited to a period of 15 years.
As the result of various state and local regulations pertaining to the management of growth,
local governments sometimes impose development restrictions that can delay the
development of an area for up to several years. Such development delays may, in turn, have
the effect of delaying the reimbursement due a developer or property owner who has funded
"excess" infrastructure improvements in the restricted area under a contract with a city, town,
or water-sewer district.
Summary of Engrossed Bill:
Subject to specified conditions, contracts by cities, towns, or water-sewer districts requiring
pro rata reimbursement to a property owner for funding excess infrastructure capacity may be
of a duration exceeding 15 years. However, the contract extension may not exceed the
duration of pertinent legal constraints restricting applications for new development within the
area benefitted by the excess infrastructure capacity.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.
Testimony For: The fifteen year limit on "latecomer agreements" needs to be extended.
Developers are unable to obtain the reimbursement they deserve when local governments
impose development moratoria in order to control growth. Such moratoria diminish the
duration of the reimbursement period and can result in developers not receiving what they are
due. This bill would resolve this problem by allowing the duration of "latecomer
agreements" to be extended if growth is halted as the result of local planning policies. This
bill would encourage private development of public infrastructure and would allow growth to
pay for itself.
(With concerns) The extension of the duration of latecomer agreements presents logistical
and administrative problems for water-sewer districts. Potentially, it puts the districts in the
middle of contractual issues arising between the original developer and latecomer property
owners/developers who are benefitted by the original infrastructure improvements. When
more than 15 years has passed, it can be difficult to locate the original developer.
Testimony Against: The bill is a bad idea with respect to latecomer agreements as they apply to special districts. It would put special districts in the middle of potential contract disputes between third parties.
Persons Testifying: (In support) Representative Sullivan, B., prime sponsor; Jason
Chambers, Barclay's North; Nathan Gorton, Snohomish City Association of Realtors; and
Elbert Esparza, Washington Realtors.
(With concerns) Steve Lindstrom, Sno-King Water District Coaltion; and Joe Daniels,
Washington Association of Sewer/Water Districts.
(Opposed) Ashley Probart, Association of Washington Cities.