This bill amends RCW 35.92.025 to require cities and towns that charge water or sewer connection charges to adopt and maintain, by 2030, a system to defer collection of those one-time connection charges for single-family detached, single-family attached, and multifamily residential construction. The deferral system must allow a building permit applicant for those residential types to request deferral of full payment and must include one or both of these options: defer payment until final inspection or defer payment until issuance of a certificate of occupancy or equivalent certification. Municipalities that implement the required deferral process must withhold final inspection certification or a certificate of occupancy (or equivalent) until the connection charges have been paid in full. Cities and towns that already had a deferred collection system in place as of the act’s effective date are exempt from the new adoption requirement. The bill clarifies that “connection charges” for these deferral rules means the one-time capital and administrative charges imposed by a utility for physical connection to existing infrastructure for the specified residential types. It also keeps that such connection charges may include interest from the date of construction until connection or for up to ten years, at a rate commensurate with the city or town’s rate at the time but not to exceed 10% per year or the equitable share allocated to the property owner. Connection charges are treated as revenue of the municipal utility system, and legislative bodies of cities and towns authorize and set the charges. This is a modification of existing law (an amendment to RCW 35.92.025) that creates a procedural requirement for municipalities to adopt deferred-payment options and sets limits on interest that may be charged. The text provided does not state additional enforcement mechanisms or penalties beyond withholding certification. Important details are missing or unclear in the provided text: the act’s effective date is not given, the statute does not define terms such as “single-family attached,” “final inspection,” or “equivalent certification” in the excerpt, and it is not explicit whether jurisdictions that do not collect connection charges under subsection (1) are subject to the deferral requirement. The extracted text also shows a subsection numbering irregularity.

If enacted, builders and people getting permits for single-family detached, single-family attached, or multifamily homes in cities and towns that charge water or sewer connection fees will generally be able to delay paying those one-time connection charges until either the final inspection or the certificate of occupancy. That will reduce upfront cash requirements for construction projects, but the deferred balance can accrue interest (up to 10% per year for up to ten years), and municipalities can block final inspections or occupancy certificates until the charge is paid, so the debt still has strong enforcement and eventual cost to the property owner or developer. Connection charges remain revenue for the municipal utility systems, but their receipt may be delayed. Cities and towns that collect connection charges will need to put a deferral system in place by 2030 unless they already have one, creating an administrative responsibility and likely small staff or process costs to implement and manage deferrals. Municipal utilities may face short-term cash flow and billing changes because revenue timing shifts, although allowed interest can partly offset that. The bill’s effective date, precise definitions (for example of “single-family attached” or “final inspection”), and any other enforcement or procedural details are not included in the provided facts, so some implementation specifics and impacts are uncertain.