AN ACT Relating to the financing of publicly owned utilities providing sewer or potable water facilities; adding a new chapter to Title 43 RCW; and making an appropriation.

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

NEW SECTION. Sec. 1. The purpose of this chapter is to establish a new voluntary method of financing the replacement, rehabilitation, and maintenance of publicly owned sewer and potable water facilities by instituting a practice of setting aside a portion of the receipts from the periodic billing for rates or charges for these utility systems to be used for such purposes.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter:

(1) "Director" means the director of community development.

(2) "Local government" means every unit of local government including counties, cities, towns, sewer districts, water districts, public utility districts, irrigation districts, and other municipal or quasi-municipal corporations.

(3) "Utility revolving fund" means the fund created under section 3 of this act to be used to finance the maintenance, rehabilitation and replacement of utility systems.

(4) "Utility system" means a publicly owned system of sanitary sewers, including on-site and off-site facilities, storm or surface water sewers, or potable water facilities.

NEW SECTION. Sec. 3. The utility revolving fund is hereby created with the state treasurer acting as the custodian of the fund. Moneys in the fund may be used only to finance all or part of the costs of maintaining, rehabilitating, and replacing utility systems of local governments. Moneys placed into the fund include the initial moneys loaned by the state pursuant to section 5 of this act, receipts received from local governments under section 4 of this act, and investment earnings from moneys in the fund. The state treasurer shall apportion moneys in this fund to the credit of the designated utility system of the particular local government making the contribution, and to its proportionate share of the initial money loaned by the state and any interest earnings.

Disbursements from the fund shall be on authorization of the director of community development, or the duly authorized representative thereof. The fund is not subject to the allotment procedure provided under chapter 43.88 RCW, and no appropriation is required for disbursement.

NEW SECTION. Sec. 4. Any local government may make contributions to the utility revolving fund to assist in financing the costs of maintaining, rehabilitating, and replacing its utility systems.

The director shall authorize disbursements from the utility revolving fund at the request of the local government that deposited moneys in the fund, not to exceed the amount credited to the account of the local government, including its proportionate share of the investment earnings and loan by the state. Moneys disbursed to a local government from this fund only may be used for maintaining, rehabilitating, or replacing portions of its utility system.

A local government wishing to avail itself of financing maintenance, rehabilitation, or replacement of its utility system must agree to annually transfer an amount of money to the state for deposit in this fund at least equal to ten percent of the annual total of rates and charges generated from its utility system.

No moneys may be disbursed from this fund until at least two years' worth of contributions have been made by the local government. Any disbursements that include a portion of the money loaned by the state to this fund shall be repaid within at least five years of its withdrawal, together with interest payments at a rate established by the state treasurer roughly equal to the expected rate of inflation over this five-year period. These repayments shall be in addition to the required annual deposits.

The state shall enforce the required repayments and deposits through injunctive action if the repayments and deposits are not made when required.

NEW SECTION. Sec. 5. Sections 1 through 4 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 6. There is hereby appropriated for the biennium ending June 30, 1989, ten million dollars from the general fund to be deposited into the utility revolving fund, which together with the interest payments required by the state treasurer under section 4 of this act shall be repaid from the utility revolving fund to the general fund on or before June 30, 1994.