AN ACT Relating to the financing of water pollution control facilities and systems; adding a new chapter to Title 43 RCW; adding a new section to chapter 84.52 RCW; adding a new section to chapter 84.55 RCW; creating a new section; and making an appropriation.

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

NEW SECTION. Sec. 1. The long-range health and environmental goals for the state of Washington must include the protection of the state's critical water bodies and supplies for the health, safety, and enjoyment of its people, and the economic use of water by providing water pollution control facilities and activities. The purpose of this chapter is to provide financial assistance to the state and local governments in the achievement of federal and state water pollution control requirements for the protection of the state's critical water resources. It is further the purpose of this chapter to provide this financial assistance without further indebting the state. It is the policy of this state that the responsibility of paying for the costs of that portion of capacity of water pollution control facilities designed to deal with future growth is a local responsibility and that grants and loans made under this chapter shall not be used to finance such capacities.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Account" means the 1985 water pollution control account.

(2) "City" means a city or town.

(3) "Critical water resource" means those significant surface or subterranean water bodies in jeopardy of further degradation causing irreparable deterioration.

(4) "Department" means the department of ecology.

(5) "Eligible cost" means that portion of the cost of a water pollution control facility that can be financed in part by a grant or loan under this chapter. The term does not include any portion of a facility's cost attributable to capacity that is in excess of that reasonably required to address one hundred ten percent of the water pollution control facility needs existing at the time application is made for a loan or grant. The department shall adopt rules to further define "eligible cost" and these policies shall be designed to fairly finance water pollution control facilities and to assure that the taxpayers in some areas of the state are not disproportionately called upon to pay for costs of addressing future pollution control needs in other parts of the state attributable to projected growth occurring in such other parts of the state.

(6) "Public body" means the state of Washington or any agency, county, city, political subdivision, municipal corporation, or quasi-municipal corporation thereof, an agency of the federal government, and those Indian tribes now or hereafter recognized as such by the federal government.

(7) "Water pollution control activities" means: (a) Actions to remove pollutants from or prevent pollution of critical water resources; (b) actions to clean up hazardous waste spills that threaten critical water resources; (c) the development of plans to prevent pollution of critical water resources and to specify needs for water pollution control facilities and other water pollution control activities; and (d) the development of plans and designs specific to particular water pollution control facilities.

(8) "Water pollution control facilities" means facilities owned or operated by a public body for: (a) Preventing pollution to, or mitigating the deterioration of, critical water resources used for drinking purposes, but not including individual hookups; (b) secondary treatment of sewage or greater than secondary treatment of sewage, and related interceptors and outfalls; (c) facilities for treating stormwater; and (d) facilities for storing sewage and stormwater until it can be treated.

NEW SECTION. Sec. 3. The 1985 water pollution control account is hereby created in the state treasury. The following moneys shall be placed in the account: (1) Tax receipts from the tax imposed in section 7 of this act; (2) moneys appropriated to this account; (3) principal and interest from the repayment of loans made pursuant to this chapter; and (4) investment income obtained from the investment of these moneys.

NEW SECTION. Sec. 4. Moneys in the account shall be administered by the department of ecology subject to legislative appropriation. The department may use or permit the use of any moneys in the account to make grants or loans to public bodies, including grants to public bodies as cost-sharing moneys in any case where federal, local, or other moneys are made available on a cost-sharing basis, for water pollution control facilities and activities within the purposes of this chapter, and for related administrative expenses. Moneys in the account may also be used by the department to finance water pollution control activities within the purposes of this chapter.

The department shall ensure that grants of moneys authorized under this chapter do not constitute more than fifty percent of the total eligible cost of any water pollution control facility, and that the grants and loans of moneys authorized under this chapter do not constitute more than seventy-five percent of the total eligible cost of any water pollution control facility. The department shall also ensure that the combination of grants and loans of moneys authorized under this chapter and federal grants do not exceed seventy-five percent of the eligible cost of any water pollution control facility. The department shall insure that grants and loans made to a public body for water pollution control activities do not constitute more than fifty percent of the costs of the water pollution control activity. The department shall not provide grants for planning or design of water pollution control facilities, but may provide loans for such purposes that constitute up to one hundred percent of such costs.

Not more than three percent of the moneys in the account may be used by the department of ecology to pay for the administration of the grant and loan program established under this chapter.

Loans shall not be for a term in excess of ten years and shall bear interest at rates determined by the department in consultation with the state treasurer.

The department shall present a progress report on use of moneys from the account to the legislature no later than November 30th of each year.

NEW SECTION. Sec. 5. The department shall distribute grants and loans over the period from the effective date of this act until December 31, 1995, in the following manner:

(1) Not more than forty-five percent for water pollution control facilities or activities that remove pollutants from or prevent the pollution of Puget Sound, including Hood Canal;

(2) Not more than five percent for water pollution control facilities or activities that remove pollutants or prevent the pollution of the straits of Juan de Fuca, Georgia, and Rosario, and marine embayments immediately adjacent to these straits;

(3) Not more than two percent for water pollution control facilities or activities that remove pollutants from or prevent the pollution of other marine water in the state;

(4) Not more than eleven percent for water pollution control facilities or activities that remove pollutants from or prevent the pollution of freshwater lakes and rivers, including but not limited to Lake Chelan and the Yakima and Columbia rivers;

(5) Not more than sixteen percent for water pollution control facilities or activities that remove pollutants from or prevent the pollution of sole source aquifers, including but not limited to not more than fourteen percent for water pollution control facilities or activities that remove pollutants from or prevent the pollution of the Spokane Rathdrum Prairie aquifer; and

(6) Not more than twenty-one percent for water pollution control facilities or activities as prescribed by the department.

These distribution percentages shall not restrict distributions in any single year. No single public body shall receive grants and loans under this chapter that, as of December 31, 1995, constitute more than twenty-four percent of the total amount of moneys used for such purposes.

NEW SECTION. Sec. 6. When making grants or loans for water pollution control facilities, the department shall take into consideration the following:

(1) The protection of water quality and public health;

(2) The cost to household ratepayers if they had to finance the water pollution control facilities without state assistance;

(3) Regulatory actions established in federal and state compliance orders;

(4) The recommendations of the Puget Sound water quality authority and any other board, council, commission, or group established by the legislature to study water pollution control issues around the state;

(5) Geographical distribution;

(6) The extent to which the recipient county or city, or if the recipient is another public body, the extent to which the county or city in which the recipient public body is located, has established programs to mitigate nonpoint pollution of the surface or subterranean body of water sought to be protected by the water pollution control facilities or activities that would be partially financed by the grant or loan; and

(7) The level of local fiscal effort by household ratepayers since 1972 in financing water pollution control facilities.

When allocating moneys in the account for water pollution control activities, the department shall take into consideration subsections (1), (3), (4), (5), (6), and (7) of this section.

Within two years after the Puget Sound water quality authority has made its recommendations on nonpoint pollution, no grant or loan, or distribution of grant or loan moneys, may be made to any public body located within a county from which nonpoint pollution enters Puget Sound unless the director of the department of ecology finds that the Puget Sound water quality authority's recommendations on nonpoint pollution have been implemented by each public entity within the county, to the extent that the entity has the implementing authority.

NEW SECTION. Sec. 7. A state-wide property tax is hereby annually imposed at a rate equal to twenty-five cents per thousand dollars of assessed valuation adjusted to the state equalized ratio fixed by the department of revenue to be used exclusively for purposes provided for in this chapter. Receipts from this tax shall be placed directly in the 1985 water pollution control account. This property tax shall be imposed in 1985 for collection in 1986, and thereafter through the 1994 taxes to be collected in 1995. This property tax shall be in addition to the state property tax imposed in RCW 84.52.043.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 9. A new section is added to chapter 84.55 RCW to read as follows:

This chapter does not apply to the first levy under section 7 of this act.

NEW SECTION. Sec. 10. A new section is added to chapter 84.52 RCW to read as follows:

The tax imposed under section 7 of this act is not subject to the limitations imposed under RCW 84.52.043.

NEW SECTION. Sec. 11. There is appropriated from the 1985 water pollution control account to the department of ecology for the biennium ending June 30, 1987, the sum of sixty-three million three hundred thousand dollars, or so much thereof as may be necessary, to carry out the purposes of this act.