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2017 LEGISLATIVE SESSION REPORT
This Legislative Session Report summarizes new laws that apply to water-sewer districts (Sections I – IV below), and some new laws that apply to other local governments whose actions impact water-sewer districts, such as counties and cities, or who provide related or complimentary services, such as fire districts and public utility districts (Sections V – VIII below).
Unless otherwise indicated, the new laws are effective on July 23, 2017.
I. PAID FAMILY AND MEDICAL LEAVE
Chapter 5, 2017 Laws (Third Special Session) (SSB 5975) (Effective October 19, 2017): Paid Family and Medical Leave
This law creates a paid family and medical leave insurance program beginning January 1, 2020, funded by premiums paid by both employers and employees and administered by the Washington State Employment Security Department.
II. PUBLIC RECORDS ACT
Chapter 303, 2017 Laws (Regular Session) (ESHB 1594): Public Records Administration
The Public Records Act (PRA) requires state and local agencies to make their records available to the public for inspection and copying upon request, unless the information fits into an exemption. This bill clarifies that records held by volunteers are not considered “public records” under the PRA if the volunteer does not serve in an administrative capacity, does not hold an appointed position to an agency board, commission or internship, and does not have any supervisory function for the agency.
In the past, agencies could deny requests that were unclear when the requestor does not respond to the agency’s request to clarify. Now, if a request has both clear and unclear portions, the agency must respond to the clear portion and request clarification of the unclear portion.
This bill also establishes a series of programs intended to assist local agencies in responding to electronic records requests. Currently, local agency officials who are tasked with responding to requests must undergo training. This bill requires that the training address issues related to electronic documents and information technology services. This bill establishes a competitive grant program, administered by the State Archives, to improve local agency information technology systems for public records management. Various state agencies, including the Attorney General, Chief Information Officer, and State Archivist, must establish consultation programs to assist local agencies with best practices regarding electronic requests.
Chapter 304, 2017 Laws (Regular Session) (EHB 1595): Responding to Public Records Requests—Costs for Electronic Copies
Currently, the PRA allows state and local agencies to charge requestors either the actual cost of making copies or to charge a maximum of $0.15 per page. This bill updates the fee schedule to reflect maximum default charges for all copies, including both hardcopies and electronic copies:
An agency may charge a flat fee of $2 as an alternative to the authorized default fees if the agency reasonably estimates that the costs will amount to more than $2.
An agency may impose a customized service charge for records requests that require the preparation of data compilations or customized electronic access services that are not used by the agency for other purposes. The fee may include reimbursement for the actual costs of providing the record. The agency must notify the requestor of the charge, explain the reason for the charge, and provide a cost estimate. The requestor may amend the request to avoid or reduce the charge. An agency may require a deposit of up to 10% of the estimated customized service charge cost.
If an agency opts to charge the actual cost of providing copies, the agency must provide public notice and hold a hearing regarding the factors used to calculate the actual costs.
This bill also declares that a request for all or substantially all records of an agency not relating to a particular topic is not a valid request for identifiable records. Agencies may now deny multiple automatically generated (bot) requests that come from the same source within a 24-hour period if the request causes excessive interference with the other essential functions of the agency.
III. WATER-SEWER DISTRICTS
Chapter 314, 2017 Laws (Regular Session) (SB 5119): Water-sewer Districts—Issuance of Warrants and Pollution Control Facilities
Generally, the county treasurer acts as the treasurer of a water-sewer district located within the county. Based on information submitted by the district, the county auditor issues warrants and sends them to the county treasurer for payment. Under current law, a district with 2,500 or more customers may appoint its own treasurer, if authorized by the county treasurer. A district treasurer possesses the power of the county treasurer and auditor for the district concerning the creation of funds, issuing warrants, and investing district monies.
Under this bill, districts with revenues of $5 million or more in each of the last three years are authorized to issue their own warrants for the payment of claims or other obligations to the district. Districts with revenues greater than $250,000 and less than $5 million in each of the last three years also are authorized to issue their own warrants, provided both the county treasurer and the district agree. In either case, the district may authorize the issuing of one general certificate that permits the county treasurer to pay all warrants specified in the general certificate. The district may then issue the warrants specified in the general certificate.
This bill expressly authorizes districts to enter into contracts for asset management services of their water storage assets.
This bill also amends RCW 70.95A.020 to include “water-sewer districts” in the definition of municipalities authorized to acquire, lease, or sell pollution control facilities, and to issue and secure revenue bonds to defray the cost of acquiring or improving such facilities.
Chapter 35, 2017 Laws (Regular Session) (SB 5162): Wastewater Operator Account
Operators of sewage treatment plants are required to be certified by the Water Quality Program at the Department of Ecology. Certification costs $50 for new and $30 for renewed certificates. In the past, this money went into the state general fund. This bill creates the Wastewater Treatment Plant Operator Certification Account, into which those funds will now go. The funds may only be used for the wastewater treatment plant operator certificate program.
Chapter 16, 2017 Laws (Regular Session) (ESSB 5254) (Effective October 19, 2017): Exemption from Lien Recording Surcharges for Low-income Housing and Homeless Programs
County auditors may charge a surcharge of $10 per document recorded (from September 1, 2012 to June 30, 2023, auditors may charge an additional $40) to administer the requirements of the Homeless Housing Assistance Act. The law had exempted from the surcharge documents recording a state, county, or city lien or satisfaction of lien. This bill exempts from the surcharge documents recording a water-sewer district lien or satisfaction of lien for delinquent utility payments.
IV. PUBLIC WORKS
Chapter 258, 2017 Laws (Regular Session) (SSB 5301): New Criterion for Bidder Responsibility
A bidder on a public works project must satisfy several responsibility criteria in order to be considered a responsible bidder and be awarded a public works contract (the word “bidder” includes the contractor on a competitively bid contract as well as a contractor on a small works contract). This bill adds to the criteria a requirement that within the three-year period immediately preceding the date of the bid solicitation, the bidder must not have been determined by a final and binding citation and notice of assessment issued by the Department of Labor and Industries or through a civil judgment entered by a court to have willfully violated any provision of Chapter 49.46 RCW (labor regulations), Chapter 49.48 RCW (wage payment and collection), or Chapter 49.52 RCW (wage deductions, contributions and rebates). Before a public works contract is awarded, the bidder must submit to the agency a signed statement, in accordance with RCW9A.72.085 (sworn certificates or declarations), verifying under penalty of perjury that the bidder is in compliance with these Chapters. In determining whether the bidder is a responsible bidder, the agency is specifically authorized to consider whether the bidder has been determined to have willfully violated these Chapters.
Chapter 75, 2017 Laws (Regular Session) (SB 5734): Waiver of Payment and Performance Bond and Retainage
For public works contracts, the contractor must deliver to the public entity (state agency or local government) a payment and performance bond issued by a surety company; however, if the contract is $100,000 or less, the contractor may deliver a bond issued by an individual surety or sureties. RCW 39.08.010. For public works contracts of $35,000 or less, at the option of the contractor, the public entity may, in lieu of the bond, retain 50% of the contract amount.
This bill increases from $100,000 to $150,000 the amount of a bond that may be issued by an individual surety or surety; increases from $35,000 to $150,000 the contract amount subject to the retainage option; decreases from 50% to 10% the percentage of the contract amount retained under the retainage option; and authorizes the retainage option for general contractor/construction managers, as defined in RCW 39.10.210. Finally, this bill states that the recovery of unpaid wages and benefits must be the first priority for any actions filed against the retainage by a state agency or local government.
Chapter 302, 2017 Laws (Regular Session) (ESHB 1538): Early Release of Retainage—Subcontractors
Public bodies must reserve on public improvement contracts a retainage not to exceed 5% of moneys earned by the contractor, as a trust fund for protection and payment of claims under the contract and state taxes and penalties due from the contractor. RCW 60.28.011. A contractor may submit a bond for all or any portion of the contract retainage in a form acceptable to the public body and from a surety insurer authorized by the public body.
This bill allows a subcontractor to request the contractor to submit a bond to the public body for that portion of the contractor’s retainage pertaining to the subcontractor, in a form acceptable to the public body and from a bonding company that meets the standards of the public body. The request must be made before the public body’s final formal acceptance of the project. The contractor may withhold the subcontractor’s portion of the bond premium. Within 30 days of the request, the contractor must provide and the public body must accept a bond meeting these requirements, unless the public body can demonstrate good cause for refusing to accept it, the bond is not commercially available, or the subcontractor refuses to pay the subcontractor’s portion of the bond premium and to provide the contractor with a like bond.
V. GROWTH MANAGEMENT ACT
Chapter 105, 2017 Laws (Regular Session) (ESHB 1503): Hirst Decision--On-site Sewage System Self-Inspections
Under the Growth Management Act (GMA), counties and cities are required to develop comprehensive plans and implement regulations that direct responsible growth. Limits are placed on growth, depending on whether development is occurring in rural or urban areas. In rural areas, the comprehensive plan and regulations must include measures that protect the amount and quality of surface and groundwater.
In 2016, the Washington Supreme Court ruled in Whatcom County v. Hirst, 186 Wn.2d 648, that the county violated the GMA by allowing private homeowners in rural areas to inspect their own on-site septic systems (OSS), rather than requiring professional inspections. The Court noted that the Growth Management Hearings Board, which adjudicates disputes arising under the GMA, found significant disparities in reported failure rates between self-inspection and professional- inspection, as well as water quality contamination from faulty septic systems.
This bill overturns that portion of Hirst by declaring that the GMA does not preclude counties from authorizing OSS self-inspections by homeowners, their tenants, or their family members so long as they complete county certification requirements. This does not in any way diminish the counties’ obligations to ensure water quality under the GMA.
Chapter 305, 2017 Laws (Regular Session) (SHB 1683): Sewer Service Within Urban Growth Areas
Washington’s largest counties and the cities within them must satisfy all planning requirements of the GMA. These are referred to as “fully planning” counties and cities. These jurisdictions must adopt comprehensive plans that address specific planning elements, including a capital facilities plan element (an inventory of existing capital facilities, forecast of the future needs for capital facilities, and proposed locations of new or expanded capital facilities), and a utility element (general location, proposed location, and capacity of existing and proposed utilities).
Counties fully planning under the GMA must designate urban growth areas (UGAs), areas within which urban growth must be encouraged and outside of which growth can occur only if it is not urban in nature. Certain types of government services are considered “urban” and for the most part can only extend beyond city limits into UGAs.
This bill declares that counties, cities, and utilities that have capital facility plans or utilities elements to provide sewer services within the UGA are not obligated to install sanitary sewer systems within the UGA to properties that are already serviced by on-site sewage systems that are in compliance with health regulations.
Chapter 331, 2017 Laws (Regular Session) (SSB 5790): Economic Development Element of City and County GMA Comprehensive Plans
To address economic stagnation and distress in rural counties, this bill amends the GMA to allow counties with a population of less than 75,000 as of April 1, 2014 to amend their comprehensive plan rural elements to permit innovative techniques to encourage rural economic development while still accommodating rural densities and uses. Essentially, low-income rural counties can engage in economic growth, but not to the level of urban growth. This will also help prevent people living in rural and island communities from needing to commute great distances for work.
VI. STATE ENVIRONMENTAL POLICY ACT
Chapter 289, 2017 Laws (Regular Session) (SHB 1086): Completion of Environmental Impact Statements Within Two Years
Under the State Environmental Protection Act (SEPA) (Chapter RCW 43.21C RCW), the SEPA responsible official of the lead agency for a proposal must make a threshold determination, based on a SEPA checklist and additional information, as to whether or not the proposal is likely to have a probable significant adverse environmental impact. If the proposal may have such an impact, the lead agency must prepare an environmental impact statement (EIS). An EIS provides decision-makers and the public with a complete and impartial discussion of the proposal, existing site conditions, probable significant adverse environmental impacts, and reasonable alternatives and mitigation measures that would avoid or minimize adverse impacts.
Because the EIS is so thorough, preparation of the EIS can take a long time. For complex decisions associated with a broad scope of possible environmental impacts, the lead agency must aspire to finish an EIS within 24 months of making a threshold determination that an EIS is needed. For narrower and more easily identifiable environmental impacts, the lead agency must aspire to finish in far less time than 24 months. These goals are simply guidelines and do not create civil liability or a new cause of action against the lead agency.
Chapter 312, 2017 Laws (Regular Session) (SSB 5046): Public Notices of Public Health, Safety, and Welfare in Language Other Than English
Each local emergency management organization that produces a local comprehensive emergency management plan must include a communication plan for notifying significant population segments (5% or 1,000, whichever is fewer) of life safety information during an emergency. When developing these communication plans, local emergency management organizations are encouraged to consult with affected community organizations in developing emergency communication policies and procedures that specifically assist “Limited English Proficiency” individuals. These communications plans must be submitted to the Washington Military Department Emergency Management Division. Reviews must include the effectiveness of LEP communication during an emergency.
Chapter 309, 2017 Laws (Regular Session) (SHB 2202): Eligibility of EMTs for Membership in Law Enforcement Officers’ and Firefighters’ Retirement System (LEOFF) Plan 2
Currently, the Law Enforcement Officer and Fire Fighter Plan 2 (LEOFF) retirement system includes “Emergency Medical Technicians” (EMTs) as qualified employees.
This bill narrows that definition to only EMTs who provide medical treatment at the scene of a medical emergency or while transporting a patient to a medical facility.
This bill also broadens the definition of an eligible “employer” of employees eligible for LEOFF Plan 2 to include public corporations created by a city, town, or county – specifically to include public hospital districts.
Chapter 85, 2017 Laws (Regular Session) (SB 5036): Authority and Procedures for Unit Priced Contracting by PUDs
Under certain circumstances, public utility districts (PUDs) are required to enter into contracts for the purchase of materials or work. This bill clarifies that PUDs may procure public works with a unit-priced contract to complete anticipated types of work, rather than taking traditional bids. This is needed because sometimes PUDs do not know in advance how much the work will cost because it depends on events that occur later. There are also circumstances when the work needs to be done quickly.
Unit priced contracting is defined as a competitively bid contract in which public works are anticipated on a recurring basis to meet the business or operational needs of a PUD, under which the contractor agrees to a fixed period, indefinite quantity delivery of work, at a defined unit price, for each category of work. An initial contract term may not exceed three years, but PUDs may extend or renew for one more.
Chapter 209, 2017 Laws (Regular Session) (EHB 2005): Administration of Municipal General Business Licenses
Local business and occupation (B&O) taxes are levied by cities at a percentage rate on the gross receipts of a business, less some deductions. This bill attempts to make it easier for small business to register with cities and pay the local B&O taxes. This bill directs cities, towns, and identified business organizations to partner and recommend changes to simplify the B&O system. The task force must presents recommendations to the legislature by October 31, 2018.
Most cities require a business license for doing any “business activities” within their city. This bill mandates that all cities that require a business license partner with the Department of Revenue by December 31, 2022, if funds are appropriated, to issue new licenses through its Business License System. If funds are not appropriated, the Department must partner with at least six cities per year from January 1, 2018 to December 31, 2021, and must partner with the remaining cities between January 1, 2022 and December 31, 2027. The Department may work with individual cities in delaying these timelines. Cities that issue business licenses are exempt if they participate in the FileLocal program administered jointly by the cities of Seattle, Tacoma, Bellevue, and Everett by January 1, 2020.
Additionally, under this bill, cities must work with the Association of Washington Cities to form a committee to develop and adopt a general business licensing model ordinance by July 1, 2018. The ordinance must include a definition of “engaging in business within the city” among other things. Cities must adopt the provisions of the model ordinance by January 1, 2019, or they may not enforce their licensing requirements until they adopt the ordinance.
Chapter 119, 2017 Laws (Regular Session) (HB 1959): Public Hearing Before Removal of Restrictive Covenant From Land Owned by Local Government
This bill requires any city, town, county, or municipal corporation to provide notice and hold a hearing prior to removing, vacating, or extinguishing a restrictive covenant from land that it owns. This bill was introduced because a city was gifted land under the restriction that it be used as a public park. The city, as property owner, changed the use and contracted with a developer to develop the land, without providing notice to the public. This bill does not stop a local government’s ability to remove restrictions on its land, but it does require public involvement first.
Chapter 148, 2017 Laws (Regular Session) (SHB 1820): Maintenance and Operation of Parks and Recreational Land Acquired Through Conservation Futures Program
Counties are authorized to levy a property tax of up to $0.0625 per $1,000 of assessed valuation to generate funds to acquire open space, agricultural, and timber lands for public use or enjoyment (conservation futures). Currently, counties may allocate up to 15% of the fund to operations and maintenance. This bill increases this cap to 25% for counties that have 400 acres or more of conservation futures land and have collected the conservation futures property tax for 20 or more years.
VIII. FIRE DISTRICTS AND REGIONAL FIRE AUTHORITIES
Chapter 197, 2017 Laws (Regular Session) (HB 1166): Fire Protection District Tax Levies
The Washington State Constitution prohibits property taxes from exceeding 1% of a property’s assessed value (AV). This is typically expressed as $10 per $1,000 AV. State law limits the amount of property taxes local governments can levy so that the aggregate stays below the 1% threshold. The aggregate tax rates for the city, county, and junior districts, such as fire, library, and hospital districts, cannot exceed $5.90 per $1,000 AV. If the aggregate tax rate exceeds $5.90, fire districts can protect up to $0.25 from statutory reduction.
Fire districts are permitted to levy three $0.50 levies, totaling $1.50 per $1,000 AV. One of these three levies may be authorized by the board of fire commissioners of a fire district. In the past, this tax could only be levied by districts that had at least one full-time paid employee or contracted with another fire district that had at least one full-time paid employee. This bill eliminates that requirement, allowing all-volunteer fire districts to levy the additional $0.50 tax.
Chapter 196, 2017 Laws (Regular Session) (SHB 1467) (Effective May 5, 2017, except for Sections 10 and 12, which become effective January 1, 2018): Formation of Regional Fire Protection Service Authorities—Removing Disincentives for Voluntary Formation
Currently, regional fire protection service authorities (RFAs) may impose up to three property taxes of $0.50 each for a total of $1.50 per $1,000 AV. Additionally, a RFA may impose a benefit charge on personal property and improvements to real property located within the RFA jurisdiction. The benefit charge must be reasonably proportioned to the measurable benefits to the property. To impose a benefit charge, the RFA governing body must hold a public hearing and 60% of the voters must approve it at an election held within 12 month of the charge’s imposition. The initial charge may last for six or fewer years. Once the benefit charge expires, a RFA may impose another charge for an additional six years if 60% of the voters approve. A RFA that imposes a benefit charge is prohibited from imposing $0.50 of the total property tax levy of $1.50 per $1,000 AV that it may otherwise impose.
This bill modifies the benefit charge process to make it easier to pass subsequent charges. Now, after the initial benefit charge expires, reauthorization requires only a simple majority, rather than 60%, and the requirement that the election be held within 12 months of imposition is limited to only the initial charge. Another change is that the RFA planning committee, which advises the RFA, rather than its governing board, conducts the public hearing.
This bill modifies the property tax process by allowing RFAs to levy property taxes at the amount which would otherwise be allowed if the tax levy in previous years had been set at the full amount, but were not due to the imposition of the benefit charge or for other reasons. The bill also protects $0.25 per $1,000 AV from prorationing if the aggregate exceeds the $5.90 statutory limit. However, this protection does not apply if the combined tax rate exceeds the $10 per $1,000 AV constitutional limit.
For both RFAs and fire districts, certain tax-exempt properties are not subject to a benefit charge. These mostly include religious institutions and affordable housing. Under this bill, a RFA or fire district that is less than four square miles in size, already imposes a benefit charge, and has a population exceeding 19,000, can find that a tax-exempt property has a substantial increase in requested services over the prior year. If that finding is made, the RFA or fire district must work in collaboration and good faith with the property owner to address the increase. If, in the next year, the heightened services have not been addressed and the property owner has not acted in good faith, the RFA or fire district may impose the benefit charge or a “fire protection charge” in an amount equivalent to the benefit rates for similarly situation properties for that year.
Chapter 308, 2017 Laws (Regular Session) (SHB 1863): National Fire Incident Reporting System
The National Fire Incident Reporting System (NFIRS) is a standard reporting system developed by the US Fire Administration that fire jurisdictions use to report on their activities. Ideally, after responding to an incident, fire departments, districts, or RFAs will submit details about their call (casualties, nature of the call, property damage, etc.) to NFIRS. The Washington State Patrol (WSP) used to administer the program through the Director of Fire Protection, until the program was cut due to budget constraints in 2010. Since then, fire chiefs have been voluntarily reporting information, but much less effectively. This bill requires the WSP, through the Fire Protection Director, to once again administer the program, subject to funding.
Chapter 280, 2017 Laws (Regular Session) (ESHB 2010) (Effective May 10, 2017): Homelessness in Wildfire Areas
This bill requires the Department of Natural Resources (DNR) to provide funding to certain Washington counties for equipment and services used by fire districts and fire departments for residential wildfire risk reduction activities to prevent homelessness due to wildfires. The eligible counties are located east of the Cascades, share a common border with Canada, and have a population of 100,000 or less. DNR is also authorized to transfer ownership of depreciated firefighting vehicles and other equipment to these eligible local fire districts.
Chapter 58, 2017 Laws (Regular Session) (SB 5122): Fire Commissioner Compensation
This bill increases fire district commissioners’ compensation based on inflation. Compensation must be adjusted every five years.
Chapter 326, 2017 Laws (Regular Session) (SB 5454): Fire District Annexation
In the past, fire districts could only annex cities and merge with other districts that were adjacent. This bill allows districts to annex cities and merge with other districts that are within a reasonable proximity. Reasonable proximity means a geographic separation that does not jeopardize the effective operations of the fire district. This bill also eliminates the ability of fire districts to annex only part of a city.
Chapter 328, 2017 Laws (Regular Session) (ESSB 5628): Fire District Formation by Legislative Authority of City or Town
Generally, fire districts are created by petition and serve areas not serviced by city fire departments. There is a trend to increase the utilization of regional fire authorities (RFAs); however, there are many obstacles for city fire departments and fire districts to form RFAs because they are very different entities. This bill allows a city to create a fire district instead of a fire department.
To create a fire district within the city boundaries: 1) the city must adopt a resolution establishing the district, 2) the district must contain a financing plan, 3) there must be public hearing on the resolution, and 4) the resolution must be approved by a simple majority, or if there will be a benefit charge, 60 percent. City legislative members may act as unpaid fire district commissioners, or may create an independent commission. These districts may not establish an ambulance service if it would compete with a private service that is performing its duties well enough. The district may engage in “banked levy capacity” for purposes of property taxation.