BILL REQ. #:  H-4130.2 

Read first time 01/18/08.   Referred to Committee on Local Government.

     AN ACT Relating to clarifying annexation procedures between cities and fire districts; amending RCW 35.02.210, 36.70A.110, 36.115.070, and 35.13.270; adding a new section to chapter 35.02 RCW; adding a new section to chapter 35.13 RCW; adding a new section to chapter 35A.14 RCW; and repealing RCW 35.02.190, 35.02.200, 35.02.202, 35.02.205, 35A.14.380, and 35A.14.400.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 35.02 RCW to read as follows:
     A city or town incorporating under this chapter shall, prior to the effective date of the incorporation, enter into a service agreement with each fire protection district whose boundaries will be changed by the incorporation. The service agreement shall address the transfer of revenues and assets between the fire district and the city or town taking into consideration the impact of the incorporation on the ability of the fire protection district to maintain existing levels of service in the portions of the fire protection district outside of the incorporation area and the impact on the provision of fire protection and emergency medical services within the incorporation area.
     In the event an agreement is not entered into prior to the effective date of the incorporation, then until such time as a service agreement is entered into:
     (1) The fire district shall continue to provide service to the annexed area;
     (2) The tax levy transfer provisions of RCW 35.13.270(2)(a) are suspended; and
     (3) At the time the city or town property taxes are levied on the annexed properties, the city or town shall pay to the fire protection district, on a quarterly basis, an amount equal to what the fire district would have received in tax and/or benefit charge revenues if the property had not been removed from the district.

NEW SECTION.  Sec. 2   A new section is added to chapter 35.13 RCW to read as follows:
     A city or town annexing property under this chapter shall, prior to the effective date of the annexation, enter into a service agreement with each fire protection district whose boundaries will be changed by the annexation. The service agreement shall address the transfer of revenues and assets between the fire district and the city or town taking into consideration the impact of the annexation on the ability of the fire protection district to maintain existing levels of service in the portions of the fire protection district outside of the annexation area and the impact on the provision of fire protection and emergency medical services within the annexation area.
     In the event an agreement is not entered into prior to the effective date of the annexation, then until such time as a service agreement is entered into:
     (1) The fire district shall continue to provide service to the annexed area;
     (2) The tax levy transfer provisions of RCW 35.13.270(2)(a) are suspended; and
     (3) At the time the city or town property taxes are levied on the annexed properties, the city or town shall pay to the fire protection district, on a quarterly basis, an amount equal to what the fire district would have received in tax and/or benefit charge revenues if the property had not been removed from the district.

NEW SECTION.  Sec. 3   A new section is added to chapter 35A.14 RCW to read as follows:
     A city annexing property under this chapter shall, prior to the effective date of the annexation, enter into a service agreement with each fire protection district whose boundaries will be changed by the annexation. The service agreement shall address the transfer of revenues and assets between the fire district and the city taking into consideration the impact of the annexation on the ability of the fire protection district to maintain existing levels of service in the portions of the fire protection district outside of the annexation area and the impact on the provision of fire protection and emergency medical services within the annexation area.
     In the event an agreement is not entered into prior to the effective date of the annexation, then until such time as a service agreement is entered into:
     (1) The fire district shall continue to provide service to the annexed area;
     (2) The tax levy transfer provisions of RCW 35.13.270(2)(a) are suspended; and
     (3) At such time as the city property taxes are levied on the annexed properties, the city shall pay to the fire protection district, on a quarterly basis, an amount equal to what the fire district would have received in tax and/or benefit charge revenues if the property had not been removed from the district.

Sec. 4   RCW 35.02.210 and 1991 c 360 s 8 are each amended to read as follows:
     At the option of the governing body of a newly incorporated city or town, any ((fire protection district or)) library district serving any part of the area so incorporated shall continue to provide services to such area until the city or town receives its own property tax receipts.

Sec. 5   RCW 36.70A.110 and 2004 c 206 s 1 are each amended to read as follows:
     (1) Each county that is required or chooses to plan under RCW 36.70A.040 shall designate an urban growth area or areas within which urban growth shall be encouraged and outside of which growth can occur only if it is not urban in nature. Each city that is located in such a county shall be included within an urban growth area. An urban growth area may include more than a single city. An urban growth area may include territory that is located outside of a city only if such territory already is characterized by urban growth whether or not the urban growth area includes a city, or is adjacent to territory already characterized by urban growth, or is a designated new fully contained community as defined by RCW 36.70A.350.
     (2) Based upon the growth management population projection made for the county by the office of financial management, the county and each city within the county shall include areas and densities sufficient to permit the urban growth that is projected to occur in the county or city for the succeeding twenty-year period, except for those urban growth areas contained totally within a national historical reserve.
     Each urban growth area shall permit urban densities and shall include greenbelt and open space areas. In the case of urban growth areas contained totally within a national historical reserve, the city may restrict densities, intensities, and forms of urban growth as determined to be necessary and appropriate to protect the physical, cultural, or historic integrity of the reserve. An urban growth area determination may include a reasonable land market supply factor and shall permit a range of urban densities and uses. In determining this market factor, cities and counties may consider local circumstances. Cities and counties have discretion in their comprehensive plans to make many choices about accommodating growth.
     Within one year of July 1, 1990, each county that as of June 1, 1991, was required or chose to plan under RCW 36.70A.040, shall begin consulting with each city located within its boundaries and each city shall propose the location of an urban growth area. Within sixty days of the date the county legislative authority of a county adopts its resolution of intention or of certification by the office of financial management, all other counties that are required or choose to plan under RCW 36.70A.040 shall begin this consultation with each city located within its boundaries. The county shall attempt to reach agreement with each city on the location of an urban growth area within which the city is located. If such an agreement is not reached with each city located within the urban growth area, the county shall justify in writing why it so designated the area an urban growth area. A city may object formally with the department over the designation of the urban growth area within which it is located. Where appropriate, the department shall attempt to resolve the conflicts, including the use of mediation services.
     (3) Urban growth should be located first in areas already characterized by urban growth that have adequate existing public facility and service capacities to serve such development, second in areas already characterized by urban growth that will be served adequately by a combination of both existing public facilities and services and any additional needed public facilities and services that are provided by either public or private sources, and third in the remaining portions of the urban growth areas. Urban growth may also be located in designated new fully contained communities as defined by RCW 36.70A.350.
     (4) In general, cities and fire protection districts are the units of local government most appropriate to provide urban governmental services. In general, it is not appropriate that urban governmental services be extended to or expanded in rural areas except in those limited circumstances shown to be necessary to protect basic public health and safety and the environment and when such services are financially supportable at rural densities and do not permit urban development.
     (5) On or before October 1, 1993, each county that was initially required to plan under RCW 36.70A.040(1) shall adopt development regulations designating interim urban growth areas under this chapter. Within three years and three months of the date the county legislative authority of a county adopts its resolution of intention or of certification by the office of financial management, all other counties that are required or choose to plan under RCW 36.70A.040 shall adopt development regulations designating interim urban growth areas under this chapter. Adoption of the interim urban growth areas may only occur after public notice; public hearing; and compliance with the state environmental policy act, chapter 43.21C RCW, and RCW 36.70A.110. Such action may be appealed to the appropriate growth management hearings board under RCW 36.70A.280. Final urban growth areas shall be adopted at the time of comprehensive plan adoption under this chapter.
     (6) Each county shall include designations of urban growth areas in its comprehensive plan.
     (7) An urban growth area designated in accordance with this section may include within its boundaries urban service areas or potential annexation areas designated for specific cities or towns within the county.

Sec. 6   RCW 36.115.070 and 1994 c 266 s 7 are each amended to read as follows:
     It is the intent of the legislature to permit the creation of a flexible process to establish service agreements and to recognize that local governments possess broad authority to shape a variety of government service agreements to meet their local needs and circumstances. However, it is noted that in general, cities and fire protection districts are the unit of local government most appropriate to provide urban governmental services and counties are the unit of local government most appropriate to provide regional governmental services.
     The process to establish service agreements should assure that all directly affected local governments, and Indian tribes at their option, are allowed to be heard on issues relevant to them.

Sec. 7   RCW 35.13.270 and 2007 c 285 s 1 are each amended to read as follows:
     (1) Whenever any territory is annexed to a city or town which is part of a road district of the county and road district taxes have been levied but not collected on any property within the annexed territory, the same shall when collected by the county treasurer be paid to the city or town and by the city or town placed in the city or town street fund; except that road district taxes that are delinquent before the date of annexation shall be paid to the county and placed in the county road fund.
     (2) When territory that is part of a fire district is annexed to a city or town, the following apply:
     (a) Except under sections 1 through 3 of this act, fire district taxes on annexed property that were levied, but not collected, and were not delinquent at the time of the annexation shall, when collected, be paid to the annexing city or town at times required by the county, but no less frequently than by July 10th for collections through June 30th and January 10th for collections through December 31st following the annexation; and
     (b) Fire district taxes on annexed property that were levied, but not collected, and were delinquent at the time of the annexation and the pro rata share of the current year levy budgeted for general obligation debt, when collected, shall be paid to the fire district.
     (3) When territory that is part of a library district is annexed to a city or town, the following apply:
     (a) Library district taxes on annexed property that were levied, but not collected, and were not delinquent at the time of the annexation shall, when collected, be paid to the annexing city or town at times required by the county, but no less frequently than by July 10th for collections through June 30th and January 10th for collections through December 31st following the annexation; and
     (b) Library district taxes on annexed property that were levied, but not collected, and were delinquent at the time of the annexation and the pro rata share of the current year levy budgeted for general obligation debt, when collected, shall be paid to the library district.
     (4) Subsections (1) through (3) of this section do not apply to any special assessments due in behalf of such property.
     (5) If a city or town annexes property within a fire district or library district while any general obligation bond secured by the taxing authority of the district is outstanding, the bonded indebtedness of the fire district or library district remains an obligation of the taxable property annexed as if the annexation had not occurred.
     (6) The city or town is required to provide notification, by certified mail, that includes a list of annexed parcel numbers, to the county treasurer and assessor, and to the fire district and library district, as appropriate, at least thirty days before the effective date of the annexation. The county treasurer is only required to remit to the city or town those road taxes, fire district taxes, and library district taxes collected thirty days or more after receipt of the notification.
     (7)(a) In counties that do not have a boundary review board, the city or town shall provide notification to the fire district or library district of the jurisdiction's resolution approving the annexation. The notification required under this subsection must:
     (i) Be made by certified mail within seven days of the resolution approving the annexation; and
     (ii) Include a description of the annexed area.
     (b) In counties that have a boundary review board, the city or town shall provide notification of the proposed annexation to the fire district or library district simultaneously when notice of the proposed annexation is provided by the jurisdiction to the boundary review board under RCW 36.93.090.
     (8) The provisions of this section regarding (a) the transfer of fire and library district property taxes and (b) city and town notifications to fire and library districts do not apply if the city or town has been annexed to and is within the fire or library district when the city or town approves a resolution to annex unincorporated county territory.

NEW SECTION.  Sec. 8   The following acts or parts of acts are each repealed:
     (1) RCW 35.02.190 (Annexation/incorporation of fire protection district -- Transfer of assets when at least sixty percent of assessed valuation is annexed or incorporated in city or town) and 1993 c 262 s 3, 1989 c 76 s 2, 1986 c 234 s 18, 1981 c 332 s 5, & 1965 c 7 s 35.13.247;
     (2) RCW 35.02.200 (Annexation/incorporation of fire protection district -- Ownership of assets of fire protection district -- When less than sixty percent) and 1997 c 245 s 2;
     (3) RCW 35.02.202 (Annexation/incorporation of fire protection district -- Delay of transfer) and 1991 c 360 s 7;
     (4) RCW 35.02.205 (Annexation/incorporation of fire protection district -- Distribution of assets of district when less than five percent of district annexed -- Distribution agreement -- Arbitration) and 1993 c 262 s 4 & 1989 c 267 s 3;
     (5) RCW 35A.14.380 (Ownership of assets of fire protection district -- Assumption of responsibility of fire protection -- When at least sixty percent of assessed valuation is annexed or incorporated in code city) and 1981 c 332 s 8 & 1967 ex.s. c 119 s 35A.14.380; and
     (6) RCW 35A.14.400 (Ownership of assets of fire protection district -- When less than sixty percent of assessed valuation is annexed or incorporated in code city) and 1989 c 267 s 2 & 1967 ex.s. c 119 s 35A.14.400.