"NEW SECTION.  Sec. 1   This act may be known and cited as the clean water act of 2010.

NEW SECTION.  Sec. 2   (1) The legislature finds that nonpoint water pollution and contaminated storm water runoff is a major problem in the state creating a significant burden on the rivers, aquifers, lakes, streams, and marine receiving waters across Washington.
     (2) The legislature recognizes that the burden of nonpoint and storm water pollution is caused by both increased volumes of water runoff due to the expansion of impervious surfaces and the toxic substances that pollute the runoff. The burden of storm water and nonpoint pollution from hazardous substances is difficult to offset because the source of pollution is not a single physical point, but occurs wherever the toxic substances are manufactured, used, or consumed.
     (3) The legislature finds that the federal government and the state of Washington have identified control of pollutants in storm water runoff through national pollutant discharge elimination system phase I and II municipal storm water permits as a requirement for the state and local jurisdictions. Impacts from the polluted storm water may be prevented or controlled through retrofit projects for existing infrastructure as well as other means.
     (4) The legislature finds that resources available to offset the direct burdens of storm water pollution by hazardous substances are insufficient to meet existing needs. Existing funding is raised largely by local governments and is disproportionately borne by fees levied on individuals and property owners.
     (5) Finally, the legislature finds that increasing the tax on hazardous substances is necessary to fund programs that will offset the burdens that pollution places on the environment and the waters of the state.

Sec. 3   RCW 82.21.030 and 1989 c 2 s 10 are each amended to read as follows:
     (1)(a) A tax is imposed on the privilege of possession of hazardous substances in this state. The rate of the tax ((shall be)) is seven-tenths of one percent multiplied by the wholesale value of the substance.
     (b) Beginning May 1, 2010, an additional tax is imposed on the privilege of possession of hazardous substances in this state. The rate of the tax is 0.85 percent multiplied by the wholesale value of the substance. A credit is allowed, in accordance with rules adopted by the department, for taxes paid under this subsection (1)(b) with respect to any possession of petroleum products when the petroleum products are exported for use or sale outside this state.
     (2)(a) Moneys collected under ((this chapter shall)) subsection (1)(a) of this section must be deposited in the toxics control accounts under RCW 70.105D.070 and expended in accordance with the purposes stated therein.
     (b) Moneys collected under subsection (1)(b) of this section must be deposited into the clean water legacy fund hereby created in the state treasury.
     (3) Chapter 82.32 RCW applies to the tax imposed in this chapter. The tax due dates, reporting periods, and return requirements applicable to chapter 82.04 RCW apply equally to the tax imposed in this chapter.
     (4) A credit is allowed, in accordance with rules adopted by the department, for taxes owed under this section by an air carrier, as defined in RCW 82.42.030, in excess of five hundred thousand dollars during any calendar year.

NEW SECTION.  Sec. 4   A new section is added to chapter 90.48 RCW to read as follows:
     (1) The storm water account is created in the state treasury. Any moneys in the account are allocated to the department of ecology and may be spent only after appropriation. Expenditures from the account must be used on activities or projects that mitigate or prevent storm water pollution as provided in this section.
     (2)(a) After deducting the department's administrative costs of no more than four percent of the appropriations included in the omnibus operating and capital appropriations acts associated with administering a competitive grant process, moneys must be distributed annually as provided in (b) of this subsection.
     (b)(i) By January 1, 2011, and by January 1st of each year thereafter, seventy-five thousand dollars must be provided to each jurisdiction that is subject to the national pollutant discharge elimination system phase I or phase II requirements.
     (ii)(A) Until July 1, 2011, all of the remaining moneys must be allocated through the grant process to local governments covered by national pollutant discharge elimination system municipal phase I or phase II permits to fund local government projects or activities that mitigate or prevent contamination of storm water or the recontamination of receiving waters previously remediated under federal or state-approved activities. To be eligible, local governments must provide fifty percent of project or activity costs from other nonstate fund sources.
     (B) Beginning July 1, 2011, fifty percent of the remaining moneys must be allocated through the grant process described in (b)(ii)(A) of this subsection.
     (iii) Beginning July 1, 2011, forty percent of the remaining moneys must be allocated through the grant process to local governments for retrofit projects that address contamination of storm water, or projects that directly reduce toxic diesel emissions that result in air deposition of storm water pollutants. The moneys for retrofit projects must be prioritized for projects that utilize low-impact development retrofit strategies, but moneys may be awarded for other retrofit projects if the site does not lend itself to low-impact development techniques or other retrofit techniques that are shown to be more effective in terms of addressing water quality problems associated with the site.
     (iv) Beginning July 1, 2011, ten percent of the remaining moneys must be allocated through either existing storm water grant programs or the grant process to projects under (b)(i) or (ii) of this subsection and to the highest priority projects based upon ecological and water quality benefits determined by the department. For projects qualifying under this subsection, moneys may be allocated to meet the matching requirements under (b)(i) of this subsection to jurisdictions that demonstrate economic hardship in meeting the matching requirement.
     (3) In consultation with stakeholders, the department must develop criteria for administering the program and ranking projects for funding based on water quality benefits. In developing criteria applicable to projects in the Puget Sound basin, the department must consult with the Puget Sound partnership. Consistent with RCW 90.71.340, when making grants under this section that contribute to Puget Sound protection and recovery, the department must consult with the Puget Sound partnership to ensure that grants are for projects and activities that are consistent with the prioritization of the 2020 action agenda. All activities or capital projects approved for funding must demonstrate the potential to achieve clear ecological or water quality benefits. The department must endeavor to distribute the moneys within each geographic region of the state in proportion to the severity of impacts to waterways from storm water pollution.
     (4) The department must initiate the grant application process by July 1, 2010.
     (5) By December 1, 2013, and every two years thereafter, the department must report to the governor and the appropriate committees of the legislature on the progress of the program and the suitability of the percentage allocations specified in subsection (2)(b) of this section.
     (6) The definitions in this section apply throughout this section unless the context clearly requires otherwise.
     (a) "Department" means the department of ecology.
     (b) "Low-impact development" means a storm water management and land use strategy applied, where feasible, at the parcel and subdivision, or drainage area, level that emphasizes conservation and use of on-site natural features integrated with engineered, small-scale hydrologic controls to more closely mimic predevelopment hydrologic functions.
     (c) "Retrofit" means the renovation of existing development to improve or eliminate storm water problems associated with the site or drainage area.

NEW SECTION.  Sec. 5   A new section is added to chapter 90.48 RCW to read as follows:
     (1) The water quality action account is created in the state treasury. Any moneys in the water quality action account are allocated to the department of ecology and may be spent only after appropriation. The account may not be used to fund specific state activities that are required to be funded through fees paid by state and federal water quality permittees.
     (2) Moneys in the water quality action account may be used only for state responsibilities to carry out the purposes of this chapter to: Prevent pollution of streams, rivers, aquifers, marine receiving waters, and drinking water; prevent beach and shellfish bed closures due to polluted surface runoff; and protect fish and wildlife habitat from polluted surface runoff. More specifically, moneys may be used for, but not limited to, the following purposes:
     (a) Creation and maintenance of a storm water technology center to assist businesses and governmental entities by developing resources for testing, monitoring, adopting, and implementing new clean water practices and technologies;
     (b) Improved storm water research, data management, and monitoring;
     (c) Development of clean water guidance and best management practices for nonpermitted surface runoff activities; and
     (d) Improved source control actions, such as collaboration with local governments to provide local source control inspectors.

NEW SECTION.  Sec. 6   A new section is added to chapter 90.71 RCW to read as follows:
     Consistent with RCW 90.71.340, the Puget Sound partnership must use any money deposited in the Puget Sound recovery account from the clean water legacy fund to fund activities or capital projects that are consistent with the prioritization of the 2020 action agenda.

NEW SECTION.  Sec. 7   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 8   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect May 1, 2010."