BILL REQ. #:  H-1752.2 

READ FIRST TIME 02/20/09.   

     AN ACT Relating to petroleum pollution in storm water; adding new sections to chapter 90.48 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   (1) Contaminated storm water runoff is a major water pollution problem in the state. It impacts rivers, aquifers, lakes, and streams across Washington. Addressing storm water is one of the Puget Sound partnership's top strategic priorities for Puget Sound recovery.
     (2) The storm water problem is a function of both increased runoff due to impervious surfaces and to the toxic substances that pollute the runoff.
     (3) Petroleum is the single largest contributor to storm water pollution. Contamination from petroleum products in surface water runoff accounts for a significant portion of the total pollution load in Puget Sound.
     (4) Petroleum and petroleum byproducts pollute storm water through a multitude of diverse and diffuse pathways. Combustion of gasoline, diesel, residual fuel oil, and other petroleum products emit pollutants such as hydrocarbons, polycyclic aromatic hydrocarbons, zinc, and arsenic, which then disperse and depose on the ground. Petroleum-based chemicals leach from substances such as paving asphalt and roofing materials. Oil and grease drip from vehicles and equipment onto roads and parking lots. When rainwater flows across impervious surfaces, these contaminants are mobilized and transported to water bodies.
     (5) The federal government and the state of Washington have identified remediation to storm water runoff through national pollutant discharge elimination system phase I and II requirements for the state and local jurisdictions. In addition, impacts from polluted storm water may be mitigated through retrofit projects for existing infrastructure.
     (6) The Puget Sound partnership's action agenda calls for improved storm water management by implementing national pollutant discharge elimination system permits, providing financial and technical assistance to communities, advancing the use of low-impact development approaches, and prioritizing and implementing storm water retrofits.
     (7) Current funding for addressing the direct effects of polluted storm water is insufficient to meet existing needs. That funding is raised largely by local governments and is disproportionately borne by fees levied on individual developers and property owners.
     (8) It is the intent of the legislature to impose a burden offset charge, a regulatory fee on entities that cause petroleum products to be present in the state, in order to allocate and recover the proportional costs of the public programs necessary to address the negative impacts from this substance on the state's waters.

NEW SECTION.  Sec. 2   A new section is added to chapter 90.48 RCW to read as follows:
     (1) The water pollution account is created in the state treasury. All fees collected under section 3 of this act must be deposited in the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for mitigating or preventing storm water pollution by petroleum products or storm water pollution associated with petroleum products.
     (2) After deducting the department's administrative costs associated with collecting the fees and administering a competitive grant process:
     (a) Approximately forty percent of the moneys must be allocated through the grant process to local governments to fund capital projects or activities that address petroleum contamination of storm water through the implementation of the national pollutant discharge elimination system programs permitted under this chapter. To be eligible, local governments must provide fifty percent of project or activity costs from other nonstate fund sources.
     (b) Approximately forty percent of the moneys must be allocated through the grant process to local governments for retrofit projects that address petroleum contamination of storm water. The moneys must be prioritized for low-impact development retrofit projects, but moneys may be awarded for other retrofit projects if the site does not lend itself to low-impact development techniques. After December 31, 2012, in order to qualify for funding, project proponents must demonstrate the following:
     (i) Clear and substantial ecological or water quality benefits; and
     (ii) The project is an identified priority based on an analysis of needs throughout the jurisdiction, basin, or watershed.
     (c) Approximately twenty percent of the money must be allocated through either existing storm water grant programs or the grant process to projects under (a) or (b) 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 (2)(c), moneys may be allocated to meet the matching requirements under (a) of this subsection to jurisdictions that demonstrate economic hardship in meeting the matching requirement.
     (3) The department shall develop criteria for administering the program and ranking projects for funding. In developing these criteria, the department shall consult with the Puget Sound partnership. The department shall endeavor to distribute the moneys within each geographic region of the state in proportion to the severity of impacts on the state's waters from petroleum contamination.
     (4) Administration of the grant program, including the collection of fees under section 3 of this act, must be paid for out of the water pollution account. Notwithstanding program implementation costs, no more than three percent of the moneys from the account may be used to administer the grant program on a continuing basis.
     (5) The department shall initiate the grant application process by July 1, 2010.
     (6) By December 1, 2014, the department shall report to the legislature on the progress of the program and the adequacy of the percentage allocations specified in subsection (2)(a) through (c) of this section.
     (7) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Low-impact development" means a storm water management and land development strategy applied at the parcel and subdivision 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.
     (b) "Retrofit" means the renovation of existing development to improve or eliminate storm water problems associated with the site.
     (c) "Capital project" means the capital project, including the construction and associated costs, described in capital budget instructions issued by the office of financial management.

NEW SECTION.  Sec. 3   A new section is added to chapter 90.48 RCW to read as follows:
     (1) Effective January 1, 2010, a fee is imposed on the first possession of petroleum products that contribute to storm water pollution for the purpose of offsetting the harm caused by petroleum pollution of storm water in this state. The fee is one dollar and fifty cents per barrel of petroleum product that contributes to storm water pollution.
     (2) Fees collected under this section must be deposited in the water pollution account created in section 2 of this act and applied solely for the pollution prevention and mitigation purposes permitted under section 2 of this act and for the administration of the program required under section 2 of this act.
     (3) The fee must be collected by the department. No later than January 1, 2010, the department shall adopt rules governing the collection of the fees. The department may enter into agreements with other state agencies to facilitate the most efficient collection system.
     (4) It is the intent of this section to impose a fee only once for petroleum products that contribute to storm water pollution that are possessed in this state. Accordingly, the fee is imposed on the first possession of such products. The fee is not imposed on the possession of small amounts of petroleum products that is first possessed by a consumer or by a retailer for the purpose of sale to ultimate consumers.
     (5) Petroleum products exported from or sold for export from the state are not subject to the fee imposed under this section.
     (6) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Barrel" means a unit of measurement of volume equal to forty-two United States gallons of crude oil or petroleum product.
     (b) "Control" means the power to sell or use the petroleum product or to authorize the sale or use by another.     
     (c) "Petroleum products that contribute to storm water pollution" means asphalt and road oil, lubricants, motor vehicle fuel, motor diesel fuel, and residual fuel oil, and any other petroleum substance that the department determines contributes to storm water pollution in the state. The term does not include crude oil, aviation gasoline, jet fuel, home heating oil, dyed special fuel, or clear special fuel used for agricultural purposes.
     (d) "Possession" means the act of taking control of the petroleum product located within this state, whether the person taking control does so by bringing, receiving, creating, or extracting the petroleum product in this state, and includes both actual and constructive possession. "Actual possession" occurs when the person with control obtains physical possession. "Constructive possession" occurs when the person with control does not obtain physical possession.