AN ACT Relating to water and sewer connection or capacity charges; amending RCW 56.08.010, 56.16.030, 57.08.010, and 57.16.010; adding a new section to chapter 35.58 RCW; adding a new chapter to Title 56 RCW; and adding a new chapter to Title 57 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 35.58 RCW to read as follows:

(1) A metropolitan municipal corporation that is engaged in the transmission, treatment, and disposal of sewage may impose a capacity charge on users of the metropolitan municipal corporation's sewage facilities when the user connects, reconnects, or establishes a new service. The capacity charge shall be approved by the council of the metropolitan municipal corporation.

(2) The capacity charge shall be based upon the cost of the sewage facilities' excess capacity that is necessary to provide sewerage treatment for new users to the system. The capacity charge, which may be collected over a period of fifteen years, shall not exceed:

(a) Seven dollars per month per residential customer equivalent for connections and reconnections occurring prior to January 1, 1996; and

(b) Ten dollars and fifty cents per month per residential customer equivalent for connections and reconnections occurring after January 1, 1996, and prior to January 1, 2001.

For connections and reconnections occurring after January 1, 2001, the capacity charge shall not exceed fifty percent of the basic sewer rate per residential customer equivalent established by the metropolitan municipal corporation at the time of the connection or reconnection.

(3) The user or a successive user shall have the option of paying off the capacity charge or the remainder of the capacity charge at any time prior to the final monthly payment, at a discount as determined by the metropolitan municipal corporation. This option shall not directly or indirectly give rise to a lien against the user's property.

(4) The capacity charge for a building other than a single-family residence shall be based on the projected number of residential customer equivalents to be represented by the building, considering its intended use.

(5) The council of the metropolitan municipal corporation shall enforce the collection of the capacity charge in the same manner provided for the collection, enforcement, and payment of rates and charges for sewer districts provided in RCW 56.16.100 and 56.16.110. At least thirty days before commencement of an action to foreclose a lien for a capacity charge, the metropolitan municipal corporation shall send written notice of delinquency in payment of the capacity charge to any first mortgage or deed of trust holder of record at the address of record.

(6) As used in this section, "sewage facilities" means capital projects identified since January 1, 1982, to the effective date of this section in the metropolitan municipal corporation's comprehensive water pollution abatement plan. "Residential customer equivalent" shall have the same meaning used by the metropolitan municipal corporation in determining rates and charges at the time the capacity charge is imposed.

Sec. 2. Section 1, chapter 449, Laws of 1987 and RCW 56.08.010 are each amended to read as follows:

A sewer district may acquire by purchase or by condemnation and purchase all lands, property rights, water, and water rights, both within and without the district, necessary for its purposes. A sewer district may lease real or personal property necessary for its purposes for a term of years for which such leased property may reasonably be needed where in the opinion of the board of sewer commissioners such property may not be needed permanently or substantial savings to the district can be effected thereby. The right of eminent domain shall be exercised in the same manner and by the same procedure as provided for cities and towns, insofar as consistent with the provisions of this title, except that all assessments or reassessment rolls required to be filed by eminent domain commissioners or commissioners appointed by the court shall be prepared and filed by the district, and the duties devolving upon the city treasurer shall be imposed upon the county treasurer for the purposes hereof; it may construct, condemn and purchase, add to, maintain, and operate systems of sewers for the purpose of furnishing the district and inhabitants thereof with an adequate system of sewers for all uses and purposes, public and private, including but not limited to on-site sewage disposal facilities, approved septic tanks or approved septic tank systems, other facilities and systems for the collection, interception, treatment, and disposal of wastewater, and for the control of pollution from wastewater and for the protection, preservation, and rehabilitation of surface and underground waters, facilities for the drainage of storm or surface waters, public highways, streets, and roads with full authority to regulate the use and operation thereof and the service rates to be charged. Such sewage facilities may include facilities which result in combined sewage disposal, treatment, or drainage and electric generation, provided that the electricity generated thereby is a byproduct of the system of sewers. Such electricity may be used by the sewer district or sold to any entity authorized by law to distribute electricity. Such electricity is a byproduct when the electrical generation is subordinate to the primary purpose of sewage disposal, treatment, or drainage. For such purposes a district may conduct sewage throughout the district and throughout other political subdivisions within the district, and construct and lay sewer pipe along and upon public highways, roads, and streets, within and without the district, and condemn and purchase or acquire land and rights of way necessary for such sewer pipe. A district may erect sewage treatment plants, within or without the district, and may acquire by purchase or condemnation, properties or privileges necessary to be had to protect any lakes, rivers, or watercourses and also other areas of land from pollution, from its sewers or its sewage treatment plant. For the purposes of sewage facilities which include facilities which result in combined sewage disposal, treatment, or drainage and electric generation where the electric generation is a byproduct, nothing in this section may be construed to authorize a district to condemn electric generating, transmission, or distribution rights or facilities of entities authorized by law to distribute electricity, or to acquire such rights or facilities without the consent of the owner. A district may charge property owners seeking to connect to the district system of sewers, as a condition to granting the right to so connect, in addition to the cost of such connection, such reasonable connection charge as the board of commissioners shall determine to be proper in order that such property owners shall bear their equitable share of the cost of such system. The board of commissioners shall consider all of the following factors: The difference in cost of construction of facilities; delivering service to the various customers; the location of the various customers within and without the district; 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; the quantity and quality of the water or sewage delivered and the time of its delivery; capital contributions made to the system, including but not limited to assessments, connection charges, and capacity charges; and any other matters which present a reasonable difference as a ground for distinction.

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 district 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 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.

A district may permit payment of the cost of connection and the reasonable connection charge to be paid with interest in installments over a period not exceeding fifteen years. The county treasurer may charge and collect a fee of three dollars per parcel for each year for the treasurer's services. Such fees shall be a charge to be included as part of each annual installment, and shall be credited to the county current expense fund by the county treasurer. A district may compel all property owners within the sewer district located within an area served by the district system of sewers to connect their private drain and sewer systems with the district system under such penalty as the sewer commissioners shall prescribe by resolution. The district may for such purpose enter upon private property and connect the private drains or sewers with the district system and the cost thereof shall be charged against the property owner and shall be a lien upon property served.

A district shall apply such connection charges to residences or commercial or industrial facilities only after a certificate of occupancy is granted by the appropriate building department.

All revenue from connection fees shall be expended for capital construction or capital debt retirement and shall not be used for maintenance and operation.

Sec. 3. Section 17, chapter 210, Laws of 1941 as last amended by section 47, chapter 186, Laws of 1984 and RCW 56.16.030 are each amended to read as follows:

(1) In the same manner as herein provided for the adoption of the general comprehensive plan, and after the adoption of the general comprehensive plan, a plan providing for additions and betterments to the general comprehensive plan, or reorganized district may be adopted. Without limiting its generality "additions and betterments" shall include any necessary change in, amendment of, or addition to the general comprehensive plan. The sewer district may incur a general indebtedness payable from annual tax levies to be made in excess of the constitutional and/or statutory tax limitations for the construction of the additions and betterments in the same way the general indebtedness may be incurred for the construction of the general comprehensive plan as provided in RCW 56.16.010. Upon ratification by the voters of the entire district, of the proposition to incur such indebtedness, the additions and betterments may be carried out by the sewer commissioners to the extent specified or referred to in the proposition to incur such general indebtedness. The sewer district may issue revenue bonds to pay for the construction of the additions and betterments by resolution of the board of sewer commissioners.

(2) Whenever a district prepares or updates a general comprehensive plan or plans for an area annexed and provided for in RCW 57.16.040, the district shall prepare a long-term capital improvement plan as prescribed by RCW 43.155.070.

NEW SECTION. Sec. 4. The board of commissioners of any water or sewer district shall contract with owners of real estate for the construction or improvement of water or sewer projects which the owners elect to install as a result of ordinances that require the projects as a prerequisite to further property development.

NEW SECTION. Sec. 5. The contract shall provide for the reimbursement to the owner or the owner's assigns for a period not to exceed fifteen years of a portion of the costs of the project by other property owners who:

(1) Are determined to be within the reimbursement area formulated under section 7 of this act;

(2) Are determined to owe a reimbursement share based upon a benefit to the property owner as provided by section 7 of this act;

(3) Did not contribute equitably to the original cost of the project; and

(4) Subsequently develop their property within the fifteen-year period and at the time of development were not required to install similar water or sewer projects because they were already provided for by the contract.

NEW SECTION. Sec. 6. The reimbursement shall be a pro rata share of construction and contract administration costs of the water or sewer project. Reimbursement for water or sewer projects shall include, but not be limited to, design, engineering, installation, and restoration. A district shall determine the reimbursement share by using a method of cost apportionment which is based on the benefit to the property owner from such project.

NEW SECTION. Sec. 7. The procedures for assessment reimbursement contracts shall be governed by the following:

(1) An assessment reimbursement area shall be formulated by the board of commissioners within ninety days after the completion of the improvements. The reimbursement shall be based upon a determination by the board of commissioners of which parcels adjacent to the improvements would require similar water or sewer improvements upon development.

(2) The contract must be recorded in the appropriate county auditor's office within thirty days of the final execution of the agreement.

NEW SECTION. Sec. 8. As an alternative to financing projects under this chapter solely by owners of real estate, water or sewer districts may join in the financing of improvement projects and may be reimbursed in the same manner as the owners of real estate who participate in the projects, if the board of commissioners has specified the conditions of its participation in a resolution. A water or sewer district may be reimbursed only for the costs of improvements that benefit that portion of the public who will use the developments within the assessment reimbursement area established pursuant to section 7 of this act. No water or sewer costs for improvements that benefit the general public may be reimbursed.

Sec. 9. Section 8, chapter 114, Laws of 1929 as last amended by section 1, chapter 11, Laws of 1988 and RCW 57.08.010 are each amended to read as follows:

(1) (a) A water district may acquire by purchase or condemnation, or both, all property and property rights and all water and water rights, both within and without the district, necessary for its purposes.

(b) A water district may lease real or personal property necessary for its purposes for a term of years for which such leased property may reasonably be needed where in the opinion of the board of water commissioners such property may not be needed permanently or substantial savings to the district can be effected thereby.

(c) The right of eminent domain shall be exercised in the same manner and by the same procedure as provided for cities of the third class, insofar as consistent with the provisions of this title, except that all assessment rolls to be prepared and filed by eminent domain commissioners or commissioners appointed by the court shall be prepared and filed by the water district, and the duties devolving upon the city treasurer are hereby imposed upon the county treasurer.

(d) A water district may construct, condemn and purchase, purchase, add to, maintain and supply waterworks to furnish the district and inhabitants thereof, and any city or town therein and any other persons, both within and without the district, with an ample supply of water for all uses and purposes public and private with full authority to regulate and control the use, content, distribution, and price thereof in such a manner as is not in conflict with general law.

(e) A water district contiguous to Canada may contract with a Canadian corporation for the purchase of water and for the construction, purchase, maintenance and supply of waterworks to furnish the district and inhabitants thereof and residents of Canada with an ample supply of water under terms approved by the board of commissioners. Such waterworks may include facilities which result in combined water supply and electric generation, provided that the electricity generated thereby is a byproduct of the water supply system.

(f) Such electricity may be used by the water district or sold to any entity authorized by law to distribute electricity. Such electricity is a byproduct when the electrical generation is subordinate to the primary purpose of water supply.

(g) For such purposes, a water district may take, condemn and purchase, purchase, acquire and retain water from any public or navigable lake, river or watercourse, or any underflowing water and, by means of aqueducts or pipe line conduct the same throughout such water district and any city or town therein and carry it along and upon public highways, roads and streets, within and without such district.

(h) For the purpose of constructing or laying aqueducts or pipe lines, dams, or waterworks or other necessary structures in storing and retaining water or for any other lawful purpose such water district may occupy the beds and shores up to the high water mark of any such lake, river, or other watercourse, and may acquire by purchase or condemnation such property or property rights or privileges as may be necessary to protect its water supply from pollution.

(i) For the purposes of waterworks which include facilities for the generation of electricity as a byproduct, nothing in this section may be construed to authorize a water district to condemn electric generating, transmission, or distribution rights or facilities of entities authorized by law to distribute electricity, or to acquire such rights or facilities without the consent of the owner.

(2) A water district may purchase and take water from any municipal corporation.

(3) A water district may fix rates and charges for water supplied and may charge property owners seeking to connect to the district's water supply system, as a condition to granting the right to so connect, in addition to the cost of such connection, such reasonable connection charge as the board of commissioners shall determine to be proper in order that such property owners shall bear their equitable share of the cost of such system.

(a) The board of commissioners shall consider all of the following factors: The difference in cost of construction of facilities; delivering service to the various customers; the location of the various customers within and without the district; 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; the quantity and quality of the water or sewage delivered and the time of its delivery; capital contributions made to the system, including but not limited to assessments, connection charges, and capacity charges; and any other matters which present a reasonable difference as a ground for distinction.

(b) 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 district 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 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.

(4) (a) A district may permit payment of the cost of connection and the reasonable connection charge to be paid with interest in installments over a period not exceeding fifteen years. The county treasurer may charge and collect a fee of three dollars for each year for the treasurer's services. Such fees shall be a charge to be included as part of each annual installment, and shall be credited to the county current expense fund by the county treasurer.

(b) A district shall apply such connection charges to residences or commercial or industrial facilities only after a certificate of occupancy is granted by the appropriate building department.

(c) All revenue from connection fees shall be expended for capital construction or capital debt retirement and shall not be used for maintenance and operation.

Sec. 10. Section 6, chapter 18, Laws of 1959 as last amended by section 2, chapter 213, Laws of 1982 and RCW 57.16.010 are each amended to read as follows:

The water district commissioners before ordering any improvements hereunder or submitting to vote any proposition for incurring any indebtedness shall adopt a general comprehensive plan of water supply for the district. They shall investigate the several portions and sections of the district for the purpose of determining the present and reasonably foreseeable future needs thereof; shall examine and investigate, determine and select a water supply or water supplies for such district suitable and adequate for present and reasonably foreseeable future needs thereof; and shall consider and determine a general system or plan for acquiring such water supply or water supplies; and the lands, waters and water rights and easements necessary therefor, and for retaining and storing any such waters, erecting dams, reservoirs, aqueducts and pipe lines to convey the same throughout such district. There may be included as part of the system the installation of fire hydrants at suitable places throughout the district, and the purchase and maintenance of necessary fire fighting equipment and apparatus, together with facilities for housing same. The water district commissioners shall determine a general comprehensive plan for distributing such water throughout such portion of the district as may then reasonably be served by means of subsidiary aqueducts and pipe lines, and the method of distributing the cost and expense thereof against such water district and against local improvement districts or utility local improvement districts within such water district for any lawful purpose, and including any such local improvement district or utility local improvement district lying wholly or partially within the limits of any city or town in such district, and shall determine whether the whole or part of the cost and expenses shall be paid from water revenue bonds. Whenever a district prepares or updates a general comprehensive plan or plans for an area annexed as provided in RCW 57.16.040, the district shall prepare a long-term capital improvement plan as prescribed by RCW 43.155.070. The commissioners may employ such engineering and legal service as in their discretion is necessary in carrying out their duties.

The general comprehensive plan shall be adopted by resolution and submitted to an engineer designated by the legislative authority of the county in which fifty-one percent or more of the area of the district is located, and to the director of health of the county in which the district or any portion thereof is located, and must be approved in writing by the engineer and director of health. The general comprehensive plan shall be approved, conditionally approved, or rejected by the director of health within sixty days of the plan's receipt and by the designated engineer within sixty days of the plan's receipt.

Before becoming effective, the general comprehensive plan shall also be submitted to, and approved by resolution of, the legislative authority of every county within whose boundaries all or a portion of the water district lies. The general comprehensive plan shall be approved, conditionally approved, or rejected by each of these county legislative authorities pursuant to the criteria in RCW 57.02.040 for approving the formation, reorganization, annexation, consolidation, or merger of water districts, and the resolution, ordinance, or motion of the legislative body which rejects the comprehensive plan or a part thereof shall specifically state in what particular the comprehensive plan or part thereof rejected fails to meet these criteria. The legislative body may not impose requirements restricting the maximum size of the water supply facilities provided for in the comprehensive plan: PROVIDED, That nothing in this chapter shall preclude a county from rejecting a proposed plan because it is in conflict with the criteria in RCW 57.02.040. Each general comprehensive plan shall be deemed approved if the county legislative authority fails to reject or conditionally approve the plan within ninety days of the plan's submission to the county legislative authority or within thirty days of a hearing on the plan when the hearing is held within ninety days of submission to the county legislative authority: PROVIDED, That the water commissioners and the county legislative authority may mutually agree to an extension of the deadlines in this section. If the district includes portions or all of one or more cities or towns, the general comprehensive plan shall be submitted also to, and approved by resolution of, the legislative authority of cities and towns before becoming effective. The general comprehensive plan shall be deemed approved by the city or town legislative authority if the city or town legislative authority fails to reject or conditionally approve the plan within ninety days of the plan's submission to the city or town or within thirty days of a hearing on the plan when the hearing is held within ninety days of submission to the county legislative authority.

Before becoming effective, any amendment to, alteration of, or addition to, a general comprehensive plan shall also be subject to such approval as if it were a new general comprehensive plan: PROVIDED, That only if the amendment, alteration, or addition affects a particular city or town, shall the amendment, alteration or addition be subject to approval by such particular city or town legislative authority.

NEW SECTION. Sec. 11. The board of commissioners shall contract with owners of real estate for the construction or improvement of water or sewer projects which the owners elect to install as a result of ordinances that require the projects as a prerequisite to further property development.

NEW SECTION. Sec. 12. The contract shall provide for the reimbursement to the owner or the owner's assigns for a period not to exceed fifteen years of a portion of the costs of the project by other property owners who:

(1) Are determined to be within the reimbursement area formulated under section 14 of this act;

(2) Are determined to owe a reimbursement share based upon a benefit to the property owner as provided by section 14 of this act;

(3) Did not contribute equitably to the original cost of the project; and

NEW SECTION. Sec. 13. The reimbursement shall be a pro rata share of construction and reimbursement of contract administration costs of the water or sewer project. Reimbursement for water or sewer projects shall include, but not be limited to, design, engineering, installation, and restoration. A district shall determine the reimbursement share by using a method of cost apportionment which is based on the benefit to the property owner from such project.

NEW SECTION. Sec. 14. The procedures for assessment reimbursement contracts shall be governed by the following:

(2) The contract must be recorded in the appropriate county auditor's office within thirty days of the final execution of the agreement.

NEW SECTION. Sec. 15. (1) As an alternative to financing projects under this chapter solely by owners of real estate, a water or sewer district may join in the financing of improvement projects and may be reimbursed in the same manner as the owners of real estate who participate in the projects, if the water or sewer district has specified the conditions of its participation in a resolution. A water or sewer district may be reimbursed only for the costs of improvements that benefit that portion of the public who will use the developments within the assessment reimbursement area established pursuant to section 14 of this act. No water or sewer district costs for improvements that benefit the general public may be reimbursed.

NEW SECTION. Sec. 16. (1) Sections 4 through 8 of this act shall constitute a new chapter in Title 56 RCW.

(2) Sections 11 through 15 of this act shall constitute a new chapter in Title 57 RCW.