HOUSE BILL REPORT

                  HB 2528

             As Reported By House Committee On:

                      Local Government

Title:  An act relating to capacity charges for sewage facilities to enhance water quality.

Brief Description:  Regulating capacity charges for sewage facilities by metropolitan municipal corporations.

Sponsors:  Representatives Cairnes, Cooper, G. Chandler, Dunshee, Tokuda, Linville, Stensen, Lovick, Esser, Kenney, Barlean, Constantine, Murray and Keiser.

Brief History:

  Committee Activity:

Local Government:  1/24/00, 2/2/00 [DPS].

           Brief Summary of Substitute Bill

CSpecifies sewage capacity charges are to be imposed monthly by a

     metropolitan municipal corporation.

C  Eliminates maximum monthly rates and the 15 year duration for

     capacity charge.

C  Authorizes the imposition of a reasonable connection charge (as

     determined by the legislative authority) based on a property owner's

     equitable share of system costs, including interest charges to a

     maximum rate of 10 percent and for a maximum of 10 years.

C  Specifies connection charges are revenue of the sewage facilities.

HOUSE COMMITTEE ON LOCAL GOVERNMENT

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  Signed by 7 members:  Representatives Mulliken, Republican Co-Chair; Scott, Democratic Co-Chair; Doumit, Democratic Vice Chair; Mielke, Republican Vice Chair; Edwards; Ericksen and Fortunato.

Staff:  Scott MacColl (786-7106).

Background:

A metropolitan municipal corporation that is engaged in the transmission, treatment, and disposal of sewage may impose a capacity charge on the users of the facility when the customer connects, reconnects or establishes new service.  The capacity charge is based upon the cost of the sewer facilitys' excess capacity, and may be collected over a 15 year period. 

Sewer capacity charges for a metropolitan municipal corporation are currently set at a maximum monthly rate, and are subject to annual review and approval by the legislative authority.  Sewer capacity charges for a building other than a single family residence are based on the projected number of residential customer equivalents to be represented by the building.

A metropolitan municipal corporation is defined as a municipal corporation of the state of Washington authorized by chapter 35.58 RCW in which two or more cities of at least 10,000 population have organized to perform certain functions, or a county which has, by ordinance or resolution, assumed the rights, powers and functions of a metropolitan municipal corporation.

Summary of Substitute Bill:

The bill eliminates the maximum monthly rates, residential customer equivalent provisions for capacity charges, and the 15 year duration for capacity charges.

The specific capacity charges have been modified to authorize metropolitan municipal corporations the right to charge property owners to connect to the sewage facility and to impose that charge on a monthly basis.  The connection charges are to be considered revenue of the sewage facility.

In addition to the connection charge, there is a capacity charge authorized to be set by the legislative body based on the property owners equitable share of the cost of the system. 

The equitable share is defined to include interest charges that:  a) apply from the date of construction of the sewage facilities until the connection; b) for a period not to exceed ten years, at a rate commensurate with the rate of interest applicable to the municipal corporation at the time of construction or major rehabilitation of the sewage facilities; or c) at the time of installation of the sewer lines, but not to exceed 10 percent per year.  The aggregate amount of interest is not to exceed the equitable share of the cost of the sewage facilities allocated to such property owners.

Substitute Bill Compared to Original Bill:  The substitute specifies that the capacity charge must be for users of a sewer facility that discharges into the metropolitan facility. The bill also requires the metropolitan municipal corporation to review and approve the capacity charge annually, and the charge is clarified to be a capacity charge.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date of Substitute Bill:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  (Original bill)  King County needs this bill in order to facilitate development within the county.  Without this bill, there will effectively be a moratorium on new development as there will be no sewage capacity.  The charge is not levied by the people that are putting in the collection facilities.  This bill is supported by all of King County, including 33 sewer districts, and is needed for growth.  This bill is the same in intent as a bill that was introduced last year, because adequate capacity for Metro is a critical point for development.

Testimony Against: None.

Testified:  Representative Jack Cairnes, prime sponsor; Kurt Tripplet, King County Department of Natural Resources; and Jim Halstrom, Master Builders of King County.