AN ACT Relating to cable television service; amending RCW 54.04.040, 54.04.050, 54.04.085, 54.08.010, 54.16.010, 54.16.120, 35.92.020, 35.92.025, 35.92.090, 36.95.010, 36.95.020, 36.95.060, 36.95.100, 36.95.140, and 36.95.210; adding new sections to chapter 54.16 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. It is the intent of this act to authorize the ownership and operation of cable television systems as public utilities by public utility districts, by counties through television reception districts under chapter 36.95 RCW, by cities including code cities, and by towns.

Sec. 2. Section 9, chapter 278, Laws of 1957 and RCW 54.04.040 are each amended to read as follows:

A district shall not construct any property to be utilized by it in the operation of a plant or system for the generation, transmission, or distribution of electric energy for sale, or for providing cable television service for sale, on the streets, alleys, or public places within a city or town without the consent of the governing body of the city or town and approval of the plan and location of the construction, which shall be made under such reasonable terms as the city or town may impose. All such properties shall be maintained and operated subject to such regulations as the city or town may prescribe under its police power.

Sec. 3. Section 8, chapter 245, Laws of 1941 as last amended by section 1, chapter 15, Laws of 1984 and RCW 54.04.050 are each amended to read as follows:

(1) Any public utility district engaged in the operation of electric ((or)), water, or cable television utilities may enter into contracts of group insurance for the benefit of its employees, and pay all or any part of the premiums for such insurance. Such premiums shall be paid out of the revenues derived from the operation of such properties: PROVIDED, That if the premium is to be paid by the district and employees jointly, and the benefits of the policy are offered to all eligible employees, not less than seventy-five percent of such employees may be so insured.

(2) A public utility district whose employees or officials are not members of the state retirement system engaged in the operation of electric ((or)), water, or cable television utilities may contract for individual annuity contracts, retirement income policies or group annuity contracts, including prior service, to provide a retirement plan, or any one or more of them, and pay all or any part of the premiums therefor out of the revenue derived from the operation of its properties.

Sec. 4. Section 2, chapter 220, Laws of 1971 ex. sess. and RCW 54.04.085 are each amended to read as follows:

A district shall require that bid proposals upon any construction or improvement of any electrical or cable television facility shall be made upon contract proposal form supplied by the district commission, and in no other manner. The district commission shall, before furnishing any person, firm or corporation desiring to bid upon any electrical or cable television work with a contract proposal form, require from such person, firm or corporation, answers to questions contained in a standard form of questionnaire and financial statement, including a complete statement of the financial ability and experience of such person, firm, or corporation in performing electrical or cable television work. Such questionnaire shall be sworn to before a notary public or other person authorized to take acknowledgment of deeds, and shall be submitted once a year and at such other times as the district commission may require. Whenever the district commission is not satisfied with the sufficiency of the answers contained in such questionnaire and financial statement or whenever the district commission determines that such person, firm, or corporation does not meet all of the requirements hereinafter set forth it may refuse to furnish such person, firm or corporation with a contract proposal form and any bid proposal of such person, firm or corporation must be disregarded. In order to obtain a contract proposal form, a person, firm or corporation shall have all of the following requirements:

(1) Adequate financial resources, or the ability to secure such resources;

(2) The necessary experience, organization, and technical qualifications to perform the proposed contract;

(3) The ability to comply with the required performance schedule taking into consideration all of its existing business commitments;

(4) A satisfactory record of performance, integrity, judgment and skills; and

(5) Be otherwise qualified and eligible to receive an award under applicable laws and regulations.

Such refusal shall be conclusive unless appeal therefrom to the superior court of the county where the utility district is situated or Thurston county be taken within fifteen days, which appeal shall be heard summarily within ten days after the same is taken and on five days' notice thereof to the district commission.

Sec. 5. Section 3, chapter 1, Laws of 1931 as last amended by section 55, chapter 469, Laws of 1985 and RCW 54.08.010 are each amended to read as follows:

At any general election held in an even-numbered year, the county legislative authority of any county in this state may, or, on petition of ten percent of the qualified electors of the county based on the total vote cast in the last general county election held in an even-numbered year, shall, by resolution, submit to the voters of the county the proposition of creating a public utility district which shall be coextensive with the limits of the county as now or hereafter established. A form of petition for the creation of a public utility district shall be submitted to the county auditor within ten months prior to the election at which the proposition is to be submitted to the voters. Petitions shall be filed with the county auditor not less than four months before the election and the county auditor shall within thirty days examine the signatures thereof and certify to the sufficiency or insufficiency thereof. If the petition be found to be insufficient, it shall be returned to the persons filing the same, who may amend or add names thereto for ten days, when the same shall be returned to the county auditor, who shall have an additional fifteen days to examine the same and attach his certificate thereto. No person having signed the petition shall be allowed to withdraw his name therefrom after the filing of the same with the county auditor: PROVIDED, That each signature shall be dated and that no signature dated prior to the date on which the form of petition was submitted to the county auditor shall be valid. Whenever the petition shall be certified to as sufficient, the county auditor shall forthwith transmit the same, together with his certificate of sufficiency attached thereto, to the county legislative authority which shall submit the proposition to the voters of the county at the next general election in an even-numbered year occurring forty-five days after submission of the proposition to the legislative authority. The notice of the election shall state the boundaries of the proposed public utility district and the object of such election, and shall in other respects conform to the requirements of the general laws of the state of Washington, governing the time and manner of holding elections. In submitting the question to the voters for their approval or rejection, the proposition shall be expressed on the ballot substantially in the following terms:

@i6!tp1Public Utility District No. !w× !trYES!sc ,001¨

@i6Public Utility District No. !w× !trNO!sc ,002¨!te

Any petition for the formation of a public utility district may describe a less area than the entire county in which the petition is filed, the boundaries of which shall follow the then existing precinct boundaries and not divide any voting precinct; and in the event that such a petition is filed the county legislative authority shall fix a date for a hearing on such petition, and shall publish the petition, without the signatures thereto appended, for two weeks prior to the date of the hearing, together with a notice stating the time of the meeting when the petition will be heard. The publication, and all other publications required by this act, shall be in a newspaper of general circulation in the county in which the district is situated. The hearing on the petition may be adjourned from time to time, not exceeding four weeks in all. If upon the final hearing the county legislative authority shall find that any lands have been unjustly or improperly included within the proposed public utility district and will not be benefited by inclusion therein, it shall change and fix the boundary lines in such manner as it shall deem reasonable and just and conducive to the public welfare and convenience, and make and enter an order establishing and defining the boundary lines of the proposed public utility district: PROVIDED, That no lands shall be included within the boundaries so fixed lying outside the boundaries described in the petition, except upon the written request of the owners of those lands. Thereafter the same procedure shall be followed as prescribed in this chapter for the formation of a public utility district including an entire county, except that the petition and election shall be confined solely to the lesser public utility district.

No public utility district created after September 1, 1979, shall include any other public utility district within its boundaries unless one of the districts is operated solely to provide cable television service: PROVIDED, That this paragraph shall not alter, amend, or modify provisions of chapter 54.32 RCW.

Sec. 6. Section 2, chapter 390, Laws of 1955 as amended by section 6, chapter 106, Laws of 1969 and RCW 54.16.010 are each amended to read as follows:

A district may make surveys, plans, investigations or studies for generating electric energy by water power, steam, or other methods, and for systems and facilities for the generation, transmission or distribution thereof, and for domestic and industrial water supply and irrigation, and for providing cable television service, and for matters and purposes reasonably incidental thereto, within or without the district, and compile comprehensive maps and plans showing the territory that can be most economically served by the various resources and utilities, the natural order in which they should be developed, and how they may be joined and coordinated to make a complete and systematic whole.

NEW SECTION. Sec. 7. A new section is added to chapter 54.16 RCW to read as follows:

(1) A district may construct, condemn and purchase, purchase, acquire, lease, add to, maintain, operate, develop, and regulate all lands, property, property rights, leases, easements, rights of way, franchises, plants, plant facilities, and systems for providing cable television service; buildings, structures, poles and pole lines, transmission lines, and cables and conduits and any and all other facilities; and may exercise the right of eminent domain to effectuate the foregoing purposes or for the acquisition and damaging of such property and rights, or property of any kind appurtenant thereto, and for the purpose of acquiring the right to make physical connection with plants and plant facilities of all persons and municipalities.

(2) The right of eminent domain shall be exercised pursuant to resolution of the commission and conducted in the same manner and by the same procedure as is provided for the exercise of that power by cities and towns of the state in the acquisition of like property and property rights. It shall be no defense to a condemnation proceeding that a portion of the cable television service sold by the district will be applied to private purposes, if the principal uses intended are public: PROVIDED, That no public utility owned by a city or town shall be condemned, and none shall be purchased without submission of the question to the voters of the utility district. In a condemnation proceeding, the court shall submit to the jury the values placed upon the property by the taxing authority for taxation purposes, and in respect to property, plants, and facilities of persons using public highways for furnishing public service without franchises, shall consider in determining the value thereof the fact that the property, plants, and facilities are subject to be removed from the highways by reason of being so operated without a franchise.

(3) The district shall have full and exclusive authority to sell and regulate and control the use, distribution, and price of the cable television service it provides within its jurisdiction, together with the right to purchase, sell, manage, or lease equipment and accessories necessary and convenient for the provision of cable television service.

NEW SECTION. Sec. 8. A new section is added to chapter 54.16 RCW to read as follows:

A district may build and maintain lines connecting its cable television distribution system with the distribution system owned by any other public utility district, or municipal corporation, or connect with the distribution systems owned by any municipal corporation in the district, and from any such line, sell cable television service to any person, public utility district, city, town or other corporation, public or private, and, by means of transmission or pole lines, conduct the service to the point of distribution, and construct and lay or otherwise establish transmission lines along and upon public highways, roads, and streets, and condemn and purchase, purchase or acquire, lands, franchises, and rights of way necessary therefor.

Sec. 9. Section 13, chapter 390, Laws of 1955 as amended by section 1, chapter 46, Laws of 1975 and RCW 54.16.120 are each amended to read as follows:

A district may, by resolution, establish and define the boundaries of local assessment districts to be known as local utility district No. ..... , for distribution, under the general supervision and control of the commission, of water for domestic use, irrigation, and electric energy, and for providing street lighting, or any of them, and for distribution of cable television service, and in like manner provide for the purchasing, or otherwise acquiring, or constructing and equipping and maintaining and operating distribution systems for such purposes, and for extensions and betterments thereof, and may levy and collect in accordance with the special benefits conferred thereon, special assessments and reassessments on property specially benefited thereby, for paying the cost and expense thereof, or any portions thereof, as herein provided, and issue local improvement bonds or warrants or both to be repaid wholly or in part by collection of local improvement assessments.

Sec. 10. Section 35.92.020, chapter 7, Laws of 1965 as amended by section 5, chapter 445, Laws of 1985 and RCW 35.92.020 are each amended to read as follows:

A city or town may also construct, condemn and purchase, purchase, acquire, add to, alter, maintain, and operate systems of sewerage, ((~~and~~)) systems and plants for garbage and refuse collection and disposal, and systems and plants for cable television service, with full authority to manage, regulate, operate, and control them, and to fix the price of service thereof, within and without the limits of the city or town: PROVIDED, That the rates charged must be uniform for the same class of customers or service. In classifying customers served or service furnished by such system of sewerage or cable television system, the city or town governing body may in its discretion consider any or all of the following factors: The difference in cost of service to the various customers; the location of the various customers within and without the city or town; the difference in cost of maintenance, operation, repair, and replacement of the various parts of the system; the different character of the service furnished various customers; in the case of a system of sewerage, the quantity and quality of the sewage delivered and the time of its delivery; capital contributions made to the system, including but not limited to, assessments; and any other matters which present a reasonable difference as a ground for distinction.

Sec. 11. section 35.92.025, chapter 7, Laws of 1965 as amended by section 6, chapter 445, Laws of 1985 and RCW 35.92.025 are each amended to read as follows:

Cities and towns are authorized to charge property owners seeking to connect to the water ((or)), sewerage, or cable television system of the city or town as a condition to granting the right to so connect, in addition to the cost of such connection, such reasonable connection charge as the legislative body of the city or town shall determine proper in order that such property owners shall bear their equitable share of the cost of such system. The equitable share may include interest charges applied from the date of construction of the ((~~water or sewer~~)) system until the connection, or for a period not to exceed ten years, at a rate commensurate with the rate of interest applicable to the city or town at the time of construction or major rehabilitation of the ((~~water or sewer~~)) system, or at the time of installation of the water ((or)), sewer, or cable television lines to which the property owner is seeking to connect but not to exceed ten percent per year: PROVIDED, That the aggregate amount of interest shall not exceed the equitable share of the cost of the system allocated to such property owners. Connection charges collected shall be considered revenue of such system.

Sec. 12. Section 35.92.090, chapter 7, Laws of 1965 and RCW 35.92.090 are each amended to read as follows:

The total general indebtedness incurred under this chapter, added to all other indebtedness of a city or town at any time outstanding, shall not exceed the amounts of indebtedness authorized by chapter 39.36 RCW, as now or hereafter amended, to be incurred without and with the assent of the voters: PROVIDED, That a city or town may become indebted to a larger amount, but not exceeding the amount authorized therefor by chapter 39.36 RCW, as now or hereafter amended, for supplying it with water, artificial light, ((~~and~~)) sewers, or cable television service when works for supplying such water, light, ((~~and~~)) sewers, and cable television service are owned and controlled by the city or town.

Sec. 13. Section 1, chapter 155, Laws of 1971 ex. sess. as amended by section 1, chapter 76, Laws of 1985 and RCW 36.95.010 are each amended to read as follows:

The purposes of a television reception ((~~improvement~~)) district, hereinafter referred to in this chapter as "district", shall be to serve the public interest, convenience, and necessity in the construction, maintenance, and operation of television and FM radio translator stations, including appropriate electric or electronic devices for increasing television program distribution, ((~~but said purposes are not meant to include~~)) including the construction or operation of television cable systems, commonly known and referred to as cable TV systems or CATV.

Sec. 14. Section 2, chapter 155, Laws of 1971 ex. sess. and RCW 36.95.020 are each amended to read as follows:

A district's boundary may include any part or all of any class county and may include any part or all of any incorporated area located within the county. ((A district's boundary may not include any territory already being served by a cable TV system (CATV) unless on August 9, 1971 there is a translator station retransmitting television signals to such territory.))

Sec. 15. Section 6, chapter 155, Laws of 1971 ex. sess. and RCW 36.95.060 are each amended to read as follows:

The business of the district shall be conducted by the board of the television reception ((~~improvement~~)) district, hereinafter referred to as the "board". The board shall be constituted as provided under either subsection (1) or (2) of this section.

(1) The board of a district having boundaries different from the county's shall have either three, five, seven, or nine members, as determined by the board of county commissioners at the time the district is created. Each member shall be appointed by the board of county commissioners, shall reside within the boundaries of the district and each shall serve a three-year term, or until their successors are qualified, except that the board of county commissioners shall appoint one of the members of the first board to a one year term and two to two year terms. A majority of the members of the board shall constitute a quorum for the transaction of business, but the majority vote of the board members shall be necessary for any action taken by the board. The board shall elect from among its members a chairman and such other officers as may be necessary. In the event a seat on the board is vacated prior to the expiration of the term of the member appointed to such seat, the board of county commissioners shall appoint a person to complete such unexpired term.

(2) Upon the creation of a district having boundaries identical to those of the county (a county-wide district), the county commissioners shall be the members of the board of the district and shall have all the powers and duties of such board as provided under the other sections of this chapter. The county commissioners shall be reimbursed pursuant to the provisions of RCW 36.95.070, and shall conduct the business of the district according to the regular rules and procedures applicable to meetings of the board of county commissioners.

Sec. 16. Section 10, chapter 155, Laws of 1971 ex. sess. as last amended by section 2, chapter 52, Laws of 1981 and RCW 36.95.100 are each amended to read as follows:

(1) The tax provided for in RCW 36.95.090 and this section shall not exceed sixty dollars per year per television set, and no person shall be taxed for more than one television set, except that a motel or hotel or any person owning in excess of five television sets shall pay at a rate of one-fifth of the annual tax rate imposed for each of the first five television sets and one-tenth of such rate for each additional set thereafter. An owner of a television set within the district shall be exempt from paying any tax on such set under this chapter: ((~~(1)~~)) (a) If either ((~~(a)~~)) (i) his television set does not receive at least a class grade B contour signal retransmitted by the television translator station or other similar device operated by the district, as such class is defined under regulations of the Federal Communications Commission as of August 9, 1971, or ((~~(b)~~)) (ii) he is currently subscribing to and receiving the services of a community antenna system (CATV) to which his television set is connected; and ((~~(2)~~)) (b) if he filed a statement with the board claiming his grounds for exemption. Space for such statement shall be provided for in the tax notice which the treasurer shall send to taxpayers in behalf of the district.

(2) The taxes referred to in subsection (1) of this section shall be in addition to any connection or installation fees, or equipment sale, lease, or rental fees imposed by the district.

Sec. 17. Section 14, chapter 155, Laws of 1971 ex. sess. as amended by section 3, chapter 76, Laws of 1985 and RCW 36.95.140 are each amended to read as follows:

A district may translate or retransmit only those signals which originate from commercial and educational FM radio stations and commercial and educational television stations which directly provide, within some portion of the state of Washington, a class A grade or class B grade contour, as such classes are defined under regulations of the Federal Communications Commission as of August 9, 1971, and subject to federal law, such other signals as are permitted to be translated or transmitted by private cable television systems in the state of Washington.

Sec. 18. Section 21, chapter 155, Laws of 1971 ex. sess. and RCW 36.95.210 are each amended to read as follows:

No television reception ((~~improvement~~)) district may be formed to operate and maintain any translator station presently or previously owned, operated or maintained by a television broadcaster.