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Bill #:  1512

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Clarifying authority for water purveyors to recover costs for fire suppresion water facilities (fire hydrants, etc.)

Companion bill #: No Companion Bill.



House - LAW


Summary/AWC comments


This bill was signed into law by the Governor on May 3.  It will take effect July 28, 2013.

The bill establishes and clarifies the authority of water purveyors to supply fire suppression water facilities (such as fire hydrants), and to recover the costs of providing those facilities and services.  It further provides liability protections for purveyors supplying fire suppression facilities and services. 

Background
A series of Washington Supreme Court decisions has left in its wake important unresolved questions about who pays for fire hydrants, what costs may be recovered, and the mechanism or process that may used for cost recovery. Water utilities may generally be required to provide fire hydrants, supporting water system facilities, and fire flow water in neighborhoods or areas served.1 Historically, utilities included hydrant costs in the "rate base" and recovered costs from customers. In recent cases, the Court drew a bright-line rule that fire hydrants are a public service and a general governmental expense to be paid by taxes – not by ratepayers as a water system cost.


In Lane v. City of Seattle, (2008) (Lane), the Washington Supreme Court determined that the provision of fire hydrants is a general governmental responsibility. The Court held that financing the cost of fire hydrants through a monthly fire hydrant charge paid by water utility ratepayers is an unlawful tax that violates Article VII, section 5 of the Washington State Constitution.

In City of Tacoma v. City of Bonney Lake, (2012) (Bonney Lake), the Washington Supreme Court considered issues similar to those considered in Lane. Tacoma and Tacoma Public Utilities had franchise agreements with Pierce County, Fircrest, University Place, and Federal Way to provide water services. Prior to Lane, Tacoma paid for fire hydrants in its jurisdiction and the other jurisdictions by charging ratepayers a hydrant fee. Following Lane, Tacoma and Tacoma Public Utilities ceased charging Tacoma ratepayers and sent bills to the other jurisdictions for hydrant costs. The jurisdictions refused to pay the costs.

Ultimately, the court in Bonney Lake held that Tacoma, acting in a proprietary capacity in entering into the franchise agreements, was contractually obligated by the agreements to provide hydrant services and to bear the costs of those services. It noted that Tacoma and Tacoma Public Utilities could have negotiated for the cost of the hydrants to be borne by the other jurisdictions, but it had not. The court also declined to find that a charge for hydrants always results in a tax, and held that whether a charge is a tax or a fee depends on how the charge is levied.



Latest version of bill:

Link to WA Legislative bill page

Official title:

AN ACT Relating to fire suppression water facilities and services provided by municipal and other water purveyors;

Sponsors:

Takko, Kochmar, Fitzgibbon, Buys, Sullivan, Magendanz, Springer, Van De Wege, Ryu

Go To Bill #

 

AWC Contacts

Analyst:  Dave Catterson
Lobbyist:  Carl Schroeder

Issue Area

Environment & Water

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