HOUSE BILL REPORT

SSB 6447

BYSenate Committee on Energy & Utilities (originally sponsored by Senators Benitz, Madsen, Patrick, Sutherland and Barr)

Regarding failing public water systems.

House Committe on Energy & Utilities

Majority Report:  Do pass as amended.  (12)

      Signed by Representatives Nelson, Chair; H. Myers, Vice Chair; Hankins, Ranking Republican Member; Bennett, Brooks, Cooper, Gallagher, Jacobsen, Jesernig, May, Miller and S. Wilson.

House Staff:Harry Reinert (786-7110)

Rereferred House Committee on Revenue

Majority Report:  Do pass as amended by Committee on Revenue and without amendment by Committee on Energy & Utilities. (12)

      Signed by Representatives Wang, Chair; Pruitt, Vice Chair; Appelwick, Basich, Fraser, Fuhrman, Grant, Morris, Phillips, Rust, Silver and H. Sommers.

AS PASSED HOUSE MARCH 1, 1990

BACKGROUND:

There are over 12,000 public water systems in Washington, an increase of more than 100 percent from the number 10 years ago. Approximately 80 percent of these are small systems with fewer than 100 connections. Virtually all of these are investor-owned, cooperatives, mutual companies, or homeowner association-operated.

These small systems have been failing with increasing frequency to comply with the legal requirement to deliver water of adequate quantity and quality.  It is well accepted by professionals in the drinking water field that small systems commonly have problems with design, financing, operation, and management.  Often these problems are directly related to the limited capital available from the small rate base, and because privately-operated systems do not have access to funding sources that publicly-operated systems have.

The burden on such small systems will be increasing in the future as they are ordered to comply with new testing and treatment requirements under federal law.  On many occasions in the past, owners or operators of such systems have refused to meet their legal obligations, or have abandoned the systems entirely, which has created a potential threat to the health of their customers.

The state Department of Health and county health officers have authority over health and safety issues related to public water systems.

Washington statutes provide a procedure for placing an insolvent corporation into receivership under the direction of the court.

The Public Works Board has authority to provide funds to local governments for public works improvements.  The board is directed to establish priority based on certain factors, including the nature of the project, its relationship to health and safety, the number of persons to be served, and whether it is in an area of high unemployment.  The board may also give low-interest or interest-free loans for emergency public works projects.

The Department of Health may impose a penalty of not more than $5,000 on persons who fail to comply with orders of the department. The department may reduce the fine on terms it deems appropriate.

The state and local governments may exercise the right of eminent domain to acquire property.  As part of the process, the government is required to compensate the property owner for the property which is taken.

SUMMARY:

The secretary of health or a local health officer is given express authority to bring legal actions and obtain temporary injunctive orders if there is an immediate and serious danger to residents constituting an emergency.

In receivership actions brought by the department or a local health officer, the petition must recommend to the court an available and willing person, municipal entity, special purpose district, or investor-owned utility to act as a receiver.  The department will maintain a list of interested individuals.  If there is no person willing to be appointed, the county will be named as receiver.  A receiver may be appointed ex parte on a showing of an immediate and serious danger constituting an emergency.  A court-established bond for a receiver is to be minimal.  The department may initiate an action for a receivership at the request of a local health officer.  Persons appointed to act as receivers are not personally liable for good faith, reasonable actions in taking over and operating such systems.

In establishing priorities for public works projects, the Public Works Board will consider whether a proposed project will bring a public water system into compliance with health and safety regulations.  The board may also give low-interest and interest- free loans to projects to bring public water systems into compliance with health and safety regulations.

In eminent domain proceedings involving public water systems, the valuation of a public water system shall include the cost of bringing the system into compliance with health and safety regulations.

Administrative fines for violations of health and safety standards must be at least $500.  Local health officers are authorized to impose administrative penalties for violations of state regulations, to file legal actions, and to inspect as necessary water system construction.

The Department of Health, in conjunction with other agencies and interested parties, must provide a comprehensive report to the Legislature by December 1, 1990, on the problems with existing public water systems and the potential for more problems in the future, with alternative approaches or solutions.

Revenue:    The bill has a revenue impact.

Fiscal Note:      Available.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    (Energy & Utilities) Senator Madsen, sponsor; Bill Liechty, Department of Health; Louis Dooley, Tacoma/Pierce County Health Group and George Walk, Pierce County.

(Revenue)  Senator Madsen, sponsor and Richard Siffert, Department of Health, Drinking Water Section.

House Committee - Testified Against:      (Energy & Utilities)  No one.

(Revenue)  No one.

House Committee - Testimony For:    (Energy & Utilities)  There are large numbers of water systems which are not meeting health and safety standards or which may not be able to comply with standards in the future.  Improved enforcement procedures are necessary to assure compliance with these standards and to enable the state and local health officials to bring failing water systems into compliance with health and safety standards.

(Revenue)  The financial incentives in the bill will encourage solvent water supply systems to take over failed water supply systems.

House Committee - Testimony Against:      (Energy & Utilities)  None.

(Revenue)  None.