BILL REQ. #:  S-1679.3 

READ FIRST TIME 02/21/11.   

     AN ACT Relating to the management of water resources; amending RCW 90.03.255, 90.44.055, 90.44.050, 90.03.380, 90.03.380, 90.44.100, 90.44.100, 90.82.040, 90.82.043, 90.82.060, 90.82.060, and 90.03.470; adding new sections to chapter 90.03 RCW; creating a new section; repealing RCW 90.14.240; providing an effective date; and providing an expiration date.

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

Sec. 101   RCW 90.03.255 and 1997 c 360 s 2 are each amended to read as follows:
     (1) The department shall, when evaluating an application for a water right, transfer, or change filed pursuant to RCW 90.03.250 or 90.03.380 that includes provision for ((any water impoundment or other resource management technique)) mitigation of impacts through new or existing storage or other infrastructure, operations, or institutional arrangements, take into consideration the benefits and costs, including environmental effects, of any ((water impoundment or other resource management)) mitigation technique that is included as a component of the application. The department's consideration shall extend to any increased water supply that results from ((the impoundment or other resource management)) a mitigation technique, including but not limited to any recharge of groundwater that may occur or water banking activity under chapters 90.42 and 90.38 RCW, as a means of making water available or otherwise offsetting the impact of the diversion of surface water proposed in the application for the water right, transfer, or change. Provision for ((an impoundment or other resource management technique)) mitigation of impacts in an application shall be made solely at the discretion of the applicant and shall not otherwise be made by the department as a condition for approving an application that does not include such provision, unless the department has adopted a rule closing the source to new appropriations or a rule establishing instream flows that apply to the source.
     (2) The department may publish guidance on its web site to inform applicants of mitigation strategies, techniques, and institutional arrangements that, where feasible, would ensure that, if the application were granted, the effects of the new diversion or withdrawal would not impair any senior water right or adopted instream flow, or negatively affect any closed water source.
     (3) This section does not lessen, enlarge, or modify the rights of any riparian owner, or any existing water right acquired by appropriation or otherwise.

Sec. 102   RCW 90.44.055 and 1997 c 360 s 3 are each amended to read as follows:
     (1) The department shall, when evaluating an application for a water right or an amendment filed pursuant to RCW 90.44.050 or 90.44.100 that includes provision for ((any water impoundment or other resource management technique)) mitigation of impacts through new or existing storage or other infrastructure, operations, or institutional arrangements, take into consideration the benefits and costs, including environmental effects, of any ((water impoundment or other resource management)) mitigation technique that is included as a component of the application. The department's consideration shall extend to any increased water supply that results from the ((impoundment or other resource management technique)) mitigation of impacts, including but not limited to any recharge of groundwater that may occur or water banking activity under chapters 90.42 and 90.38 RCW, as a means of making water available or otherwise offsetting the impact of the withdrawal of groundwater proposed in the application for the water right or amendment in the same water resource inventory area. Provision for ((an impoundment or other resource management technique)) mitigation of impacts in an application shall be made solely at the discretion of the applicant and shall not be made by the department as a condition for approving an application that does not include such provision, unless the department has adopted a rule closing the source to new appropriations or has adopted rules establishing instream flows that apply to the source.
     (2) The department may publish guidance on its web site to inform applicants of mitigation strategies, techniques, and institutional arrangements that, where feasible, would ensure that, if the application were granted, the effects of the new diversion or withdrawal would not impair any senior water right or adopted instream flow, or negatively affect any closed water source.
     (3) This section does not lessen, enlarge, or modify the rights of any riparian owner, or any existing water right acquired by appropriation or otherwise.

Sec. 103   RCW 90.44.050 and 2003 c 307 s 1 are each amended to read as follows:
     (1) After June 6, 1945, no withdrawal of public groundwaters of the state shall be begun, nor shall any well or other works for such withdrawal be constructed, unless an application to appropriate such waters has been made to the department and a permit has been granted by it as herein provided: EXCEPT, HOWEVER, That any withdrawal of public groundwaters for stock-watering purposes, or for the watering of a lawn or of a noncommercial garden not exceeding one-half acre in area, or for single or group domestic uses in an amount not exceeding five thousand gallons a day, or as provided in RCW 90.44.052, or for an industrial purpose in an amount not exceeding five thousand gallons a day, is and shall be exempt from the provisions of this section, but, to the extent that it is regularly used beneficially, shall be entitled to a right equal to that established by a permit issued under the provisions of this chapter: PROVIDED, HOWEVER, That the department from time to time may require the person or agency making any such small withdrawal to furnish information as to the means for and the quantity of that withdrawal: PROVIDED, FURTHER, That at the option of the party making withdrawals of groundwaters of the state not exceeding five thousand gallons per day, applications under this section or declarations under RCW 90.44.090 may be filed and permits and certificates obtained in the same manner and under the same requirements as is in this chapter provided in the case of withdrawals in excess of five thousand gallons a day.
     (2) The department may by rule establish quantity and acreage limits for new uses of water related to: The watering of a lawn or of a noncommercial garden not exceeding one-half acre in area; for single or group domestic uses in an amount not exceeding five thousand gallons a day; as provided in RCW 90.44.052; or for an industrial purpose in an amount not exceeding five thousand gallons a day that are lower than those provided in subsection (1) of this section. The rules, which may include rules adopted under RCW 90.54.050, must be specific to a watershed or aquifer that the department determines, in consultation with the department of fish and wildlife, federally recognized Indian tribes, and local jurisdictions, is at or close to being fully appropriated and that lower limits on new uses of groundwater are needed in the interest of conservation and stretching the beneficial use of remaining waters as far as possible.

NEW SECTION.  Sec. 201   A new section is added to chapter 90.03 RCW to read as follows:
     (1) In making a tentative determination of the extent and validity of a water right under this chapter and chapters 90.14, 90.38, 90.42, and 90.44 RCW, the department shall only evaluate the exercise of the water right during the most recent thirty-year period prior to the commencement of the department's tentative determination at issue.
     (2) For the purposes of appeal, department tentative determinations under this section do not alone constitute an agency action. Aggrieved parties must appeal the primary action of the department under which the evaluation under this section applies.
     (3) Notwithstanding subsection (1) of this section, water right determinations during a general adjudication, under RCW 90.03.110 through 90.03.245 and 90.03.620 through 90.03.645, are not limited to a thirty-year period of review.
     (4) Nothing in this section limits a superior court's authority in determining the extent and validity of a water right.

Sec. 202   RCW 90.03.380 and 2009 c 183 s 15 are each amended to read as follows:
     (1) The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the same is used: PROVIDED, HOWEVER, That the right may be transferred to another or to others and become appurtenant to any other land or place of use without loss of priority of right theretofore established if such change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if such change can be made without detriment or injury to existing rights. A change in the place of use, point of diversion, and/or purpose of use of a water right to enable irrigation of additional acreage or the addition of new uses may be permitted if such change results in no increase in the annual consumptive quantity of water used under the water right. For purposes of this section, "annual consumptive quantity" means the estimated or actual annual amount of water diverted pursuant to the water right, reduced by the estimated annual amount of return flows, averaged over the two years of greatest use within the most recent five-year period of continuous beneficial use of the water right. Before any transfer of such right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department, and the application shall not be granted until notice of the application is published as provided in RCW 90.03.280. If it ((shall)) appears that ((such)) a transfer or ((such)) a change may be made without injury or detriment to existing rights or conditioned to avoid injury or detriment to existing rights, the department ((shall)) must issue to the applicant an authorization to implement the transfer or change together with any conditions that may be required to avoid injury or detriment to an existing water right. Upon the applicant's showing that the transfer or change has been implemented, the department must issue a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant may be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water. The time period that the water right was banked under RCW 90.92.070, in an approved local water plan created under RCW 90.92.090, or the water right was subject to an agreement to not divert under RCW 90.92.050 will not be included in the most recent five-year period of continuous beneficial use for the purpose of determining the annual consumptive quantity under this section. If the water right has not been used during the previous five years but the nonuse of which qualifies for one or more of the statutory ((good causes or)) exceptions to relinquishment in RCW 90.14.140 and 90.44.520, the period of nonuse is not included in the most recent five-year period of continuous beneficial use for purposes of determining the annual consumptive quantity of water under this section.
     (2) The department's determination of the extent and validity of water rights under this section shall be consistent with section 201 of this act.
     (3) The department may establish a reasonable schedule for completion of necessary work to effect a change in the purpose, place, or manner of use or for the construction of works to effect an authorized change of point of diversion or withdrawal. Nonuse during such a reasonable schedule is not subject to relinquishment provided the project is pursued in accordance with RCW 90.03.320. Failure to complete all or a portion of the change results in relinquishment of the right unless otherwise excused under RCW 90.14.140.
     (4) If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts.
     (((3))) (5) A change in place of use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of jurisdiction of the joint board and the change can be made without detriment or injury to existing rights.
     (((4))) (6) This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070.
     (((5))) (7)(a) Pending applications for new water rights are not entitled to protection from impairment, injury, or detriment when an application relating to an existing surface or ground water right is considered.
     (b) Applications relating to existing surface or ground water rights may be processed and decisions on them rendered independently of processing and rendering decisions on pending applications for new water rights within the same source of supply without regard to the date of filing of the pending applications for new water rights.
     (c) Notwithstanding any other existing authority to process applications, including but not limited to the authority to process applications under WAC 173-152-050 as it existed on January 1, 2001, an application relating to an existing surface or ground water right may be processed ahead of a previously filed application relating to an existing right when sufficient information for a decision on the previously filed application is not available and the applicant for the previously filed application is sent written notice that explains what information is not available and informs the applicant that processing of the next application will begin. The previously filed application does not lose its priority date and if the information is provided by the applicant within sixty days, the previously filed application shall be processed at that time. This subsection (((5))) (7)(c) does not affect any other existing authority to process applications.
     (d) Nothing in this subsection (((5))) (7) is intended to stop the processing of applications for new water rights.
     (((6))) (8) No applicant for a change, transfer, or amendment of a water right may be required to give up any part of the applicant's valid water right or claim to a state agency, the trust water rights program, or to other persons as a condition of processing the application.
     (((7))) (9) In revising the provisions of this section and adding provisions to this section by chapter 237, Laws of 2001, the legislature does not intend to imply legislative approval or disapproval of any existing administrative policy regarding, or any existing administrative or judicial interpretation of, the provisions of this section not expressly added or revised.
     (((8))) (10) The development and use of a small irrigation impoundment, as defined in RCW 90.03.370(8), does not constitute a change or amendment for the purposes of this section. The exemption expressly provided by this subsection shall not be construed as requiring a change or transfer of any existing water right to enable the holder of the right to store water governed by the right.
     (((9))) (11) This section does not apply to a water right involved in an approved local water plan created under RCW 90.92.090, a water right that is subject to an agreement not to divert under RCW 90.92.050, or a banked water right under RCW 90.92.070.

Sec. 203   RCW 90.03.380 and 2003 c 329 s 2 are each amended to read as follows:
     (1) The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the same is used: PROVIDED, HOWEVER, That the right may be transferred to another or to others and become appurtenant to any other land or place of use without loss of priority of right theretofore established if such change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if such change can be made without detriment or injury to existing rights. A change in the place of use, point of diversion, and/or purpose of use of a water right to enable irrigation of additional acreage or the addition of new uses may be permitted if such change results in no increase in the annual consumptive quantity of water used under the water right. For purposes of this section, "annual consumptive quantity" means the estimated or actual annual amount of water diverted pursuant to the water right, reduced by the estimated annual amount of return flows, averaged over the two years of greatest use within the most recent five-year period of continuous beneficial use of the water right. Before any transfer of such right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department, and the application shall not be granted until notice of the application is published as provided in RCW 90.03.280. If it ((shall)) appears that ((such)) a transfer or ((such)) a change may be made without injury or detriment to existing rights or conditioned to avoid injury or detriment to existing rights, the department ((shall)) must issue to the applicant an authorization to implement the transfer or change together with any conditions that may be required to avoid injury or detriment to an existing water right. Upon the applicant's showing that the transfer or change has been implemented, the department must issue a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant may be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water. If the water right has not been used during the previous five years but the nonuse of which qualifies for one or more of the statutory exceptions to relinquishment in RCW 90.14.140 and 90.44.520, the period of nonuse is not included in the most recent five-year period of continuous beneficial use for purposes of determining the annual consumptive quantity of water under this section.
     (2) The department's determination of the extent and validity of water rights under this section shall be consistent with section 201 of this act.
     (3) The department may establish a reasonable schedule for completion of necessary work to effect a change in the purpose, place, or manner of use or for the construction of works to effect an authorized change of point of diversion or withdrawal. Nonuse during such a reasonable schedule is not subject to relinquishment provided the project is pursued in accordance with RCW 90.03.320. Failure to complete all or a portion of the change results in relinquishment of the right unless otherwise excused under RCW 90.14.140.
     (4) If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts.
     (((3))) (5) A change in place of use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of jurisdiction of the joint board and the change can be made without detriment or injury to existing rights.
     (((4))) (6) This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070.
     (((5))) (7)(a) Pending applications for new water rights are not entitled to protection from impairment, injury, or detriment when an application relating to an existing surface or ground water right is considered.
     (b) Applications relating to existing surface or ground water rights may be processed and decisions on them rendered independently of processing and rendering decisions on pending applications for new water rights within the same source of supply without regard to the date of filing of the pending applications for new water rights.
     (c) Notwithstanding any other existing authority to process applications, including but not limited to the authority to process applications under WAC 173-152-050 as it existed on January 1, 2001, an application relating to an existing surface or ground water right may be processed ahead of a previously filed application relating to an existing right when sufficient information for a decision on the previously filed application is not available and the applicant for the previously filed application is sent written notice that explains what information is not available and informs the applicant that processing of the next application will begin. The previously filed application does not lose its priority date and if the information is provided by the applicant within sixty days, the previously filed application shall be processed at that time. This subsection (((5))) (7)(c) does not affect any other existing authority to process applications.
     (d) Nothing in this subsection (((5))) (7) is intended to stop the processing of applications for new water rights.
     (((6))) (8) No applicant for a change, transfer, or amendment of a water right may be required to give up any part of the applicant's valid water right or claim to a state agency, the trust water rights program, or to other persons as a condition of processing the application.
     (((7))) (9) In revising the provisions of this section and adding provisions to this section by chapter 237, Laws of 2001, the legislature does not intend to imply legislative approval or disapproval of any existing administrative policy regarding, or any existing administrative or judicial interpretation of, the provisions of this section not expressly added or revised.
     (((8))) (10) The development and use of a small irrigation impoundment, as defined in RCW 90.03.370(8), does not constitute a change or amendment for the purposes of this section. The exemption expressly provided by this subsection shall not be construed as requiring a change or transfer of any existing water right to enable the holder of the right to store water governed by the right.

Sec. 204   RCW 90.44.100 and 2009 c 183 s 16 are each amended to read as follows:
     (1) After an application to, and upon the issuance by the department of an amendment to the appropriate permit or certificate of groundwater right, the holder of a valid right to withdraw public groundwaters may, without losing the holder's priority of right, construct wells or other means of withdrawal at a new location in substitution for or in addition to those at the original location, or the holder may change the manner or the place of use of the water.
     (2) An amendment to construct replacement or a new additional well or wells at a location outside of the location of the original well or wells or to change the manner or place of use of the water shall be issued only after publication of notice of the application and findings as prescribed in the case of an original application. Such amendment shall be issued by the department only on the conditions that: (a) The additional or replacement well or wells shall tap the same body of public groundwater as the original well or wells; (b) where a replacement well or wells is approved, the use of the original well or wells shall be discontinued and the original well or wells shall be properly decommissioned as required under chapter 18.104 RCW; (c) where an additional well or wells is constructed, the original well or wells may continue to be used, but the combined total withdrawal from the original and additional well or wells shall not enlarge the right conveyed by the original permit or certificate; and (d) other existing rights shall not be impaired. The department may specify an approved manner of construction and shall require a showing of compliance with the terms of the amendment, as provided in RCW 90.44.080 in the case of an original permit.
     (3) The construction of a replacement or new additional well or wells at the location of the original well or wells shall be allowed without application to the department for an amendment. However, the following apply to such a replacement or new additional well: (a) The well shall tap the same body of public groundwater as the original well or wells; (b) if a replacement well is constructed, the use of the original well or wells shall be discontinued and the original well or wells shall be properly decommissioned as required under chapter 18.104 RCW; (c) if a new additional well is constructed, the original well or wells may continue to be used, but the combined total withdrawal from the original and additional well or wells shall not enlarge the right conveyed by the original water use permit or certificate; (d) the construction and use of the well shall not interfere with or impair water rights with an earlier date of priority than the water right or rights for the original well or wells; (e) the replacement or additional well shall be located no closer than the original well to a well it might interfere with; (f) the department may specify an approved manner of construction of the well; and (g) the department shall require a showing of compliance with the conditions of this subsection (3).
     (4) As used in this section, the "location of the original well or wells" is the area described as the point of withdrawal in the original public notice published for the application for the water right for the well.
     (5) The development and use of a small irrigation impoundment, as defined in RCW 90.03.370(8), does not constitute a change or amendment for the purposes of this section. The exemption expressly provided by this subsection shall not be construed as requiring an amendment of any existing water right to enable the holder of the right to store water governed by the right.
     (6) This section does not apply to a water right involved in an approved local water plan created under RCW 90.92.090 or a banked water right under RCW 90.92.070.
     (7) The department's tentative determination of the extent and validity of water rights under this section must be consistent with section 201 of this act.

Sec. 205   RCW 90.44.100 and 2003 c 329 s 3 are each amended to read as follows:
     (1) After an application to, and upon the issuance by the department of an amendment to the appropriate permit or certificate of groundwater right, the holder of a valid right to withdraw public groundwaters may, without losing the holder's priority of right, construct wells or other means of withdrawal at a new location in substitution for or in addition to those at the original location, or the holder may change the manner or the place of use of the water.
     (2) An amendment to construct replacement or a new additional well or wells at a location outside of the location of the original well or wells or to change the manner or place of use of the water shall be issued only after publication of notice of the application and findings as prescribed in the case of an original application. Such amendment shall be issued by the department only on the conditions that: (a) The additional or replacement well or wells shall tap the same body of public groundwater as the original well or wells; (b) where a replacement well or wells is approved, the use of the original well or wells shall be discontinued and the original well or wells shall be properly decommissioned as required under chapter 18.104 RCW; (c) where an additional well or wells is constructed, the original well or wells may continue to be used, but the combined total withdrawal from the original and additional well or wells shall not enlarge the right conveyed by the original permit or certificate; and (d) other existing rights shall not be impaired. The department may specify an approved manner of construction and shall require a showing of compliance with the terms of the amendment, as provided in RCW 90.44.080 in the case of an original permit.
     (3) The construction of a replacement or new additional well or wells at the location of the original well or wells shall be allowed without application to the department for an amendment. However, the following apply to such a replacement or new additional well: (a) The well shall tap the same body of public groundwater as the original well or wells; (b) if a replacement well is constructed, the use of the original well or wells shall be discontinued and the original well or wells shall be properly decommissioned as required under chapter 18.104 RCW; (c) if a new additional well is constructed, the original well or wells may continue to be used, but the combined total withdrawal from the original and additional well or wells shall not enlarge the right conveyed by the original water use permit or certificate; (d) the construction and use of the well shall not interfere with or impair water rights with an earlier date of priority than the water right or rights for the original well or wells; (e) the replacement or additional well shall be located no closer than the original well to a well it might interfere with; (f) the department may specify an approved manner of construction of the well; and (g) the department shall require a showing of compliance with the conditions of this subsection (3).
     (4) As used in this section, the "location of the original well or wells" is the area described as the point of withdrawal in the original public notice published for the application for the water right for the well.
     (5) The development and use of a small irrigation impoundment, as defined in RCW 90.03.370(8), does not constitute a change or amendment for the purposes of this section. The exemption expressly provided by this subsection shall not be construed as requiring an amendment of any existing water right to enable the holder of the right to store water governed by the right.
     (6) The department's tentative determination of the extent and validity of water rights under this section must be consistent with section 201 of this act.

Sec. 301   RCW 90.82.040 and 2003 1st sp.s. c 4 s 2 are each amended to read as follows:
     (1) Once a WRIA planning unit has been initiated under RCW 90.82.060 and a lead agency has been designated, it shall notify the department and may apply to the department for funding assistance for conducting the planning and implementation. Funds shall be provided from and to the extent of appropriations made by the legislature to the department expressly for this purpose.
     (2)(a) Each planning unit that has complied with subsection (1) of this section is eligible to receive watershed planning grants in the following amounts for the first three phases of watershed planning and phase four watershed plan implementation:
     (i) Initiating governments may apply for an initial organizing grant of up to fifty thousand dollars for a single WRIA or up to seventy-five thousand dollars for a multi-WRIA management area in accordance with RCW 90.82.060(4);
     (ii)(A) A planning unit may apply for up to two hundred thousand dollars for each WRIA in the management area for conducting watershed assessments in accordance with RCW 90.82.070, except that a planning unit that chooses to conduct a detailed assessment or studies under (a)(ii)(B) of this subsection or whose initiating governments choose or have chosen to include an instream flow or water quality component in accordance with RCW 90.82.080 or 90.82.090 may apply for up to one hundred thousand additional dollars for each instream flow and up to one hundred thousand additional dollars for each water quality component included for each WRIA to conduct an assessment on that optional component and for each WRIA in which the assessments or studies under (a)(ii)(B) of this subsection are conducted.
     (B) A planning unit may elect to apply for up to one hundred thousand additional dollars to conduct a detailed assessment of multipurpose water storage opportunities or for studies of specific multipurpose storage projects which opportunities or projects are consistent with and support the other elements of the planning unit's watershed plan developed under this chapter; and
     (iii) A planning unit may apply for up to two hundred fifty thousand dollars for each WRIA in the management area for developing a watershed plan and making recommendations for actions by local, state, and federal agencies, tribes, private property owners, private organizations, and individual citizens, including a recommended list of strategies and projects that would further the purpose of the plan in accordance with RCW 90.82.060 through 90.82.100.
     (b) A planning unit may request a different amount for phase two or phase three of watershed planning than is specified in (a) of this subsection, provided that the total amount of funds awarded do not exceed the maximum amount the planning unit is eligible for under (a) of this subsection. The department shall approve such an alternative allocation of funds if the planning unit identifies how the proposed alternative will meet the goals of this chapter and provides a proposed timeline for the completion of planning. However, the up to one hundred thousand additional dollars in funding for instream flow and water quality components and for water storage assessments or studies that a planning unit may apply for under (a)(ii)(A) and (B) of this subsection may be used only for those instream flow, water quality, and water storage purposes.
     (c) ((By December 1, 2001, or)) Within one year of initiating phase one of watershed planning, ((whichever occurs later,)) the initiating governments for each planning unit must inform the department whether they intend to have the planning unit establish or amend instream flows as part of its planning process. If they elect to have the planning unit establish or amend instream flows, the planning unit is eligible to receive one hundred thousand dollars for that purpose in accordance with (a)(ii)(A) of this subsection. If the initiating governments for a planning unit elect not to establish or amend instream flows as part of the unit's planning process, the department shall retain one hundred thousand dollars to carry out an assessment to support establishment of instream flows and to establish such flows in accordance with RCW 90.54.020(3)(a) and chapter 90.22 RCW. The department shall not use these funds to amend an existing instream flow unless requested to do so by the initiating governments for a planning unit.
     (d) In administering funds appropriated for supplemental funding for optional plan components under (a)(ii) of this subsection, the department shall give priority in granting the available funds to proposals for setting or amending instream flows.
     (e) A planning unit may apply for a matching grant for phase four watershed plan implementation following approval under the provisions of RCW 90.82.130. ((A match of ten percent is required and)) For years one, two, three, four, and five of phase four, a match of ten percent is required. For years six, seven, eight, and nine of phase four, a match of fifty percent is required. For all years in phase four, the match may include financial contributions or in-kind goods and services directly related to coordination, plan, or project implementation, and oversight functions. The match can be provided by the planning unit or by the combined commitments from federal agencies, tribal governments, local governments, special districts, or other local organizations. The phase four grant may be up to one hundred thousand dollars for each planning unit for each of the first three years of implementation. At the end of the three-year period, a two-year extension may be available for up to fifty thousand dollars each year. Subject to the availability of amounts appropriated for this specific purpose, at the end of five years and for years six and seven, a two-year matching grant extension may be applied for with funding up to fifty thousand dollars each year. For years eight and nine, planning units may apply for another two-year matching grant extension with funding up to fifty thousand dollars each year. For planning units that cover more than one WRIA, additional matching funds of up to twenty-five thousand dollars may be available for each additional WRIA per year for the first three years of implementation, and up to twelve thousand five hundred dollars per WRIA per year for each of the fourth ((and fifth years)), fifth, sixth, seventh, eight, and ninth years.
     (f) When evaluating requests from watershed planning units and lead agencies to implement an adopted watershed plan and a detailed implementation plan for funding consistent with (e) of this subsection and for phase four years two through nine, the department must give priority consideration to grant proposals that directly support activities or implement projects that:
     (i) Integrate watershed plan implementation with the goals, objectives, or work plans of other local, regional, or statewide water resource, water quality, or fish recovery programs and plans;
     (ii) Develop new or improve the existing assessment of water supply as required under RCW 90.82.070; or
     (iii) Develop or implement strategies and priorities to enhance, restore, or augment stream flows.
     (g) In addition to the eligibility requirements and priority considerations of this subsection and subsection (3) of this section, the department must consider the following when making grant award decisions for phase four:
     (i) The existence, or reasonably anticipated emergence, of critical water supply and demand issues that may create consistent, adverse impacts on annual or seasonal water availability for people, farms, or fish;
     (ii) The existence, or reasonably anticipated emergence, of critical water quality issues that may create adverse impacts to public or environmental health or local economies;
     (iii) The extent to which the adopted watershed plan, the detailed implementation plan, and related implementation project proposals are integrated with or will support other statewide or regional water quantity or quality initiatives;
     (iv) The department's work plan for review of existing or development of new instream flow or basin water management rules to be adopted by the department.
     (3)(a) The department shall use the eligibility and priority criteria in this subsection (3) instead of rules, policies, or guidelines when evaluating grant applications ((at each stage of the grants program)) during phases one, two, three, and four as identified in this section.
     (b) ((In)) When reviewing the eligibility of grant applications under this subsection (3), the department shall evaluate whether:
     (i) The planning unit meets all of the requirements of this chapter;
     (ii) The application demonstrates a need for state planning funds to accomplish the objectives of the planning process; ((and))
     (iii) The application ((and supporting information evidences a readiness)) shows a need for development and implementation grant funds to accomplish the objectives of this section; and
     (iv) The application and supporting information shows the grantee is ready to proceed.
     (c) ((In ranking grant applications submitted at each stage of the grants program, the department shall give preference to applications in the following order of priority:
     (i) Applications from existing planning groups that have been in existence for at least one year;
     (ii) Applications that address protection and enhancement of)) When making decisions on the priority of funding grant applications submitted during phases one, two, and three as identified in this section, and in addition to priority considerations for funding phase four grants in subsection (2) of this section, the department shall give preference to applications that will:
     (i) Protect and enhance fish habitat in watersheds that have aquatic fish species listed or proposed to be listed as endangered or threatened under the federal endangered species act, 16 U.S.C. Sec. 1531 et seq. and for which there is evidence of an inability to supply adequate water for the existing population, or for projected population growth and economic growth ((from:
     (A) First, multi-WRIA planning; and
     (B) Second, single WRIA planning;
     (iii) Applications that address protection and enhancement of));
     (ii) Protect and enhance fish habitat and flows in watersheds or for which there is evidence of an inability to supply adequate water ((for)) to support existing population or projected population growth and economic growth ((from:
     (A) First, multi-WRIA planning; and
     (B) Second, single WRIA planning)).
     (d) Except for phase four watershed plan implementation, the department may not impose any local matching fund requirement as a condition for grant eligibility or as a preference for receiving a grant.
     (4) ((The department may retain up to one percent of funds allocated under this section to defray administrative costs.
     (5))) Planning and implementation under this chapter ((should)) must be completed as expeditiously as possible, with the focus being on local stakeholders cooperating to meet local needs and partnering with other regional, state, or federal entities and initiatives to address water management problems, issues, and challenges.
     (((6) Funding provided under this section shall be considered a contractual obligation against the moneys appropriated for this purpose.))

Sec. 302   RCW 90.82.043 and 2007 c 445 s 6 are each amended to read as follows:
     (1) Within one year of accepting funding under RCW 90.82.040(2)(e), the planning unit must complete a detailed implementation plan. Submittal of a detailed implementation plan to the department is a condition of receiving grants for the second and all subsequent years of the phase four grant.
     (2) Each implementation plan must contain strategies to provide sufficient water for: (a) Production agriculture; (b) commercial, industrial, and residential use; and (c) instream flows. Each implementation plan must contain timelines to achieve these strategies and interim milestones to measure progress.
     (3) The implementation plan must clearly define coordination and oversight responsibilities; any needed interlocal agreements, rules, or ordinances; any needed state or local administrative approvals and permits that must be secured; and specific funding mechanisms.
     (4) In developing the implementation plan, the planning unit must consult with other entities planning in the watershed management area and identify and seek to eliminate any activities or policies that are duplicative or inconsistent.
     (5)(((a))) By ((December 1, 2003, and by)) December 1st of each ((subsequent)) odd-numbered year, the director of the department shall report to the appropriate legislative standing committees regarding statutory changes necessary to enable state agency approval or permit decision making needed to implement a plan approved under this chapter.
     (((b) Beginning with the December 1, 2007, report, and then every two years thereafter, the director shall include in each report the extent to which reclaimed water has been identified in the watershed plans as potential sources or strategies to meet future water needs, and provisions in any watershed implementation plans that discuss barriers to implementation of the water reuse elements of those plans. The department's report shall include an estimate of the potential cost of reclaimed water facilities and identification of potential sources of funding for them.))

Sec. 303   RCW 90.82.060 and 2009 c 183 s 18 are each amended to read as follows:
     (1) Planning conducted under this chapter must provide for a process to allow the local citizens within a WRIA or multi-WRIA area to join together in an effort to: (a) Assess the status of the water resources of their WRIA or multi-WRIA area; and (b) determine how best to manage the water resources of the WRIA or multi-WRIA area to balance the competing resource demands for that area within the parameters under RCW 90.82.120.
     (2)(a) Watershed planning under this chapter may be initiated for a WRIA only with the concurrence of: (i) All counties within the WRIA; (ii) the largest city or town within the WRIA unless the WRIA does not contain a city or town; and (iii) the water supply utility obtaining the largest quantity of water from the WRIA or, for a WRIA with lands within the Columbia Basin project, the water supply utility obtaining from the Columbia Basin project the largest quantity of water for the WRIA. To apply for a grant for organizing the planning unit as provided for under RCW 90.82.040(2)(a), these entities shall designate the entity that will serve as the lead agency for the planning effort and indicate how the planning unit will be staffed.
     (b) For purposes of this chapter, WRIA 40 shall be divided such that the portion of the WRIA located entirely within the Stemilt and Squilchuck subbasins shall be considered WRIA 40a and the remaining portion shall be considered WRIA 40b. Planning may be conducted separately for WRIA 40a and 40b. WRIA 40a shall be eligible for one-fourth of the funding available for a single WRIA, and WRIA 40b shall be eligible for three-fourths of the funding available for a single WRIA, for phases one, two, and three. Both WRIAs 40a and 40b are eligible for the full amounts of funding allotted to a whole WRIA for planning units in phase four.
     (c) For purposes of this chapter, WRIA 29 shall be divided such that the portion of the WRIA located entirely within the White Salmon
subbasin and the subbasins east thereof shall be considered WRIA 29b and the remaining portion shall be considered WRIA 29a. Planning may be conducted separately for WRIA 29a and 29b. WRIA 29a shall be eligible for one-half of the funding available for a single WRIA and WRIA 29b shall be eligible for one-half of the funding available for a single WRIA, for phases one, two, and three. Both WRIAs 29a and 29b are eligible for the full amounts of funding allotted to a whole WRIA for planning units in phase four.
     (d) For purposes of this chapter, WRIA 14 shall be divided such that the portion of the WRIA where surface waters drain into Hood Canal shall be considered WRIA 14b, and the remaining portion shall be considered WRIA 14a. Planning for WRIA 14b under this chapter shall be conducted by the WRIA 16 planning unit. WRIA 14b shall be eligible for one-half of the funding available for a single WRIA, and WRIA 14a shall be eligible for one-half of the funding available for a single WRIA, for phases one, two, and three. Both WRIAs 14a and 14b are eligible for the full amounts of funding allotted to a whole WRIA for planning units in phase four.
     (3) Watershed planning under this chapter may be initiated for a multi-WRIA area only with the concurrence of: (a) All counties within the multi-WRIA area; (b) the largest city or town in each WRIA unless the WRIA does not contain a city or town; and (c) the water supply utility obtaining the largest quantity of water in each WRIA.
     (4) If entities in subsection (2) or (3) of this section decide jointly and unanimously to proceed, they shall invite all tribes with reservation lands within the management area.
     (5) The entities in subsection (2) or (3) of this section, including the tribes if they affirmatively accept the invitation, constitute the initiating governments for the purposes of this section.
     (6) The organizing grant shall be used to organize the planning unit and to determine the scope of the planning to be conducted. In determining the scope of the planning activities, consideration shall be given to all existing plans and related planning activities. The scope of planning must include water quantity elements as provided in RCW 90.82.070, and may include water quality elements as contained in RCW 90.82.090, habitat elements as contained in RCW 90.82.100, and instream flow elements as contained in RCW 90.82.080. The initiating governments shall work with state government, other local governments within the management area, and affected tribal governments, in developing a planning process. The initiating governments may hold public meetings as deemed necessary to develop a proposed scope of work and a proposed composition of the planning unit. In developing a proposed composition of the planning unit, the initiating governments shall provide for representation of a wide range of water resource interests.
     (7) Each state agency with regulatory or other interests in the WRIA or multi-WRIA area to be planned shall assist the local citizens in the planning effort to the greatest extent practicable, recognizing any fiscal limitations. In providing such technical assistance and to facilitate representation on the planning unit, state agencies may organize and agree upon their representation on the planning unit. Such technical assistance must only be at the request of and to the extent desired by the planning unit conducting such planning. The number of state agency representatives on the planning unit shall be determined by the initiating governments in consultation with the governor's office.
     (8) As used in this section, "lead agency" means the entity that coordinates staff support of its own or of other local governments and receives grants for developing a watershed plan.
     (9) A planning unit is dissolved when the department approves a water management board, as authorized in RCW 90.92.030, and all assets, funds, files, planning documents, pending plans and grant applications, and other current activities of the planning unit are transferred to the approved water management board. The approved water management board must assume the duties, responsibilities, and activities of the planning unit and the initiating governments, as required in this chapter.

Sec. 304   RCW 90.82.060 and 2008 c 210 s 1 are each amended to read as follows:
     (1) Planning conducted under this chapter must provide for a process to allow the local citizens within a WRIA or multi-WRIA area to join together in an effort to: (a) Assess the status of the water resources of their WRIA or multi-WRIA area; and (b) determine how best to manage the water resources of the WRIA or multi-WRIA area to balance the competing resource demands for that area within the parameters under RCW 90.82.120.
     (2)(a) Watershed planning under this chapter may be initiated for a WRIA only with the concurrence of: (i) All counties within the WRIA; (ii) the largest city or town within the WRIA unless the WRIA does not contain a city or town; and (iii) the water supply utility obtaining the largest quantity of water from the WRIA or, for a WRIA with lands within the Columbia Basin project, the water supply utility obtaining from the Columbia Basin project the largest quantity of water for the WRIA. To apply for a grant for organizing the planning unit as provided for under RCW 90.82.040(2)(a), these entities shall designate the entity that will serve as the lead agency for the planning effort and indicate how the planning unit will be staffed.
     (b) For purposes of this chapter, WRIA 40 shall be divided such that the portion of the WRIA located entirely within the Stemilt and Squilchuck subbasins shall be considered WRIA 40a and the remaining portion shall be considered WRIA 40b. Planning may be conducted separately for WRIA 40a and 40b. WRIA 40a shall be eligible for one-fourth of the funding available for a single WRIA, and WRIA 40b shall be eligible for three-fourths of the funding available for a single WRIA, for phases one, two, and three. Both WRIAs 40a and 40b are eligible for the full amounts of funding allotted to a whole WRIA for planning units in phase four.
     (c) For purposes of this chapter, WRIA 29 shall be divided such that the portion of the WRIA located entirely within the White Salmon subbasin and the subbasins east thereof shall be considered WRIA 29b and the remaining portion shall be considered WRIA 29a. Planning may be conducted separately for WRIA 29a and 29b. WRIA 29a shall be eligible for one-half of the funding available for a single WRIA and WRIA 29b shall be eligible for one-half of the funding available for a single WRIA, for phases one, two, and three. Both WRIAs 29a and 29b are eligible for the full amounts of funding allotted to a whole WRIA for planning units in phase four.
     (d) For purposes of this chapter, WRIA 14 shall be divided such that the portion of the WRIA where surface waters drain into Hood Canal shall be considered WRIA 14b, and the remaining portion shall be considered WRIA 14a. Planning for WRIA 14b under this chapter shall be conducted by the WRIA 16 planning unit. WRIA 14b shall be eligible for one-half of the funding available for a single WRIA, and WRIA 14a shall be eligible for one-half of the funding available for a single WRIA, for phases one, two, and three. Both WRIAs 14a and 14b are eligible for the full amounts of funding allotted to a whole WRIA for planning units in phase four.
     (3) Watershed planning under this chapter may be initiated for a multi-WRIA area only with the concurrence of: (a) All counties within the multi-WRIA area; (b) the largest city or town in each WRIA unless the WRIA does not contain a city or town; and (c) the water supply utility obtaining the largest quantity of water in each WRIA.
     (4) If entities in subsection (2) or (3) of this section decide jointly and unanimously to proceed, they shall invite all tribes with reservation lands within the management area.
     (5) The entities in subsection (2) or (3) of this section, including the tribes if they affirmatively accept the invitation, constitute the initiating governments for the purposes of this section.
     (6) The organizing grant shall be used to organize the planning unit and to determine the scope of the planning to be conducted. In determining the scope of the planning activities, consideration shall be given to all existing plans and related planning activities. The scope of planning must include water quantity elements as provided in RCW 90.82.070, and may include water quality elements as contained in RCW 90.82.090, habitat elements as contained in RCW 90.82.100, and instream flow elements as contained in RCW 90.82.080. The initiating governments shall work with state government, other local governments within the management area, and affected tribal governments, in developing a planning process. The initiating governments may hold public meetings as deemed necessary to develop a proposed scope of work and a proposed composition of the planning unit. In developing a proposed composition of the planning unit, the initiating governments shall provide for representation of a wide range of water resource interests.
     (7) Each state agency with regulatory or other interests in the WRIA or multi-WRIA area to be planned shall assist the local citizens in the planning effort to the greatest extent practicable, recognizing any fiscal limitations. In providing such technical assistance and to facilitate representation on the planning unit, state agencies may organize and agree upon their representation on the planning unit. Such technical assistance must only be at the request of and to the extent desired by the planning unit conducting such planning. The number of state agency representatives on the planning unit shall be determined by the initiating governments in consultation with the governor's office.
     (8) As used in this section, "lead agency" means the entity that coordinates staff support of its own or of other local governments and receives grants for developing a watershed plan.

Sec. 401   RCW 90.03.470 and 2005 c 412 s 2 are each amended to read as follows:
     Except as provided in subsection (16) of this section, the fees specified in this section shall be collected by the department in advance of the requested action.
     (1) For the ((examination)) filing of an application for a permit to appropriate water for a single domestic use that has a single purpose, a ((minimum)) filing fee of fifty dollars must be remitted with the application. For the filing of an application for a permit to appropriate water other than for a single domestic use that has a single purpose, a filing fee of two hundred dollars must be remitted with the application. ((For an amount of water exceeding one-half cubic foot per second, the examination fee shall be assessed at the rate of one dollar per one hundredth cubic foot per second. In no case will the examination fee be less than fifty dollars or more than twenty-five thousand dollars.)) No fee is required under this subsection (1) for an application filed by a party to a cost-reimbursement agreement made under RCW 90.03.265.
     (2) For the ((examination)) filing of an application to store water, a fee of ((two dollars for each acre foot of storage proposed shall be charged, but a minimum fee of fifty)) two hundred dollars must be remitted with the application. ((In no case will the examination fee for a storage project be less than fifty dollars or more than twenty-five thousand dollars.)) No fee is required under this subsection (2) for an application filed by a party to a cost-reimbursement agreement made under RCW 90.03.265.
     (3)(a) For the ((examination)) filing of an application to transfer, change, or amend a water right certificate, permit, or claim as authorized by RCW 90.44.100, 90.44.105, or 90.03.380, a minimum fee of ((fifty)) two hundred dollars must be remitted with the application. ((For an application for change involving an amount of water exceeding one cubic foot per second, the total examination fee shall be assessed at the rate of fifty cents per one hundredth cubic foot per second. For an application for change of a storage water right, the total examination fee shall be assessed at the rate of one dollar for each acre foot of water involved in the change. The fee shall be based on the amount of water subject to change as proposed in the application, not on the total amount of water reflected in the water right certificate, permit, or claim. In no case will the examination fee charged for a change application be less than fifty dollars or more than twelve thousand five hundred dollars.))
     (b) The ((examination)) filing fee for a temporary or seasonal change under RCW 90.03.390 is ((fifty)) one hundred dollars and must be remitted with the application.
     (c) No filing fee is required under this subsection (3) for:
     (i) An application to process a change relating to donation of a trust water right to the state;
     (ii) An application to process a change when the department otherwise acquires a trust water right for purposes of improving instream flows or for other public purposes;
     (iii) An application filed with a water conservancy board according to chapter 90.80 RCW ((or for the review of a water conservancy board's record of decision submitted to the department according to chapter 90.80 RCW)); or
     (iv) An application filed by a party to a cost-reimbursement agreement made under RCW 90.03.265.
     (d) For a change, transfer, or amendment involving a single project operating under more than one water right, including related secondary diversion rights, or involving the consolidation of multiple water rights, only one ((examination)) filing fee and one certificate fee are required to be paid.
     (4) ((The fifty-dollar minimum fee payable with the application shall be a credit to the total amount whenever the examination fee totals more than fifty dollars under the schedule specified in subsections (1) through (3) of this section and in such case the further fee due shall be the total computed amount, less the amount previously paid. Within five working days from receipt of an application, the department shall notify the applicant by registered mail of any additional fees due under subsections (1) through (3) of this section.
     (5))) The filing fees specified in subsections (1) through (3) of this section do not apply to any filings for emergency withdrawal authorizations or temporary drought-related water right changes authorized under RCW 43.83B.410 that are received by the department while a drought condition order issued under RCW 43.83B.405 is in effect.
     (((6))) (5) For applying for each extension of time for beginning construction work under a permit to appropriate water, for completion of construction work, or for completing application of water to a beneficial use, a fee of fifty dollars or the department's actual cost to process the extension, whichever is greater is required. These fees also apply to similar extensions of time requested under a change or transfer authorization.
     (((7))) (6) For the inspection of any hydraulic works to ((insure)) ensure safety to life and property, a fee based on the actual cost of the inspection, including the expense incident thereto, is required except as follows: (a) For any hydraulic works less than ten years old, that the department examined and approved the construction plans and specifications as to its safety when required under RCW 90.03.350, there shall be no fee charged; or (b) for any hydraulic works more than ten years old, but less than twenty years old, that the department examined and approved the construction plans and specifications as to its safety when required under RCW 90.03.350, the fee charged shall not exceed the fee for a significant hazard dam.
     (((8))) (7) For the examination of plans and specifications as to safety of controlling works for storage of ten acre feet or more of water, a minimum fee of ten dollars, or a fee equal to the actual cost, is required.
     (((9))) (8) For recording an assignment either of a permit to appropriate water or of an application for such a permit, a fee of fifty dollars or the department's actual cost to process the assignment, whichever is greater is required.
     (((10))) (9) For preparing and issuing all water right certificates, a fee of fifty dollars or the department's actual cost, whichever is greater is required.
     (((11))) (10) For filing and recording a formal protest against granting any application, a fee of fifty dollars is required. No fee is required to submit a comment, by mail or otherwise, regarding an application.
     (((12))) (11) For ((filing)) the department's determination on an application to amend a water right claim filed under chapter 90.14 RCW, a fee of fifty dollars or the department's actual cost, whichever is greater is required.
     (((13))) (12) An application or request for an action as provided for under this section is incomplete unless accompanied by the fee or the minimum fee. If no fee or an amount less than the minimum fee accompanies an application or other request for an action as provided under this section, the department shall return the application or request to the applicant with advice as to the fee that must be remitted with the application or request for it to be accepted for processing. If additional fees are due, the department shall provide timely notification by certified mail with return receipt requested to the applicant. No action may be taken by the department until the fee is paid in full. Failure to remit fees within sixty days of the department's notification is grounds for rejecting the application or request or canceling the permit. Cash shall not be accepted. Except as provided in subsection (15)(d) of this section, fees must be paid by check or money order and are nonrefundable.
     (((14))) (13) For purposes of calculating fees for groundwater filings, one cubic foot per second shall be regarded as equivalent to four hundred fifty gallons per minute.
     (14) (((15) Eighty percent of the fees collected by the department under this section shall be deposited in the state general fund. Twenty percent of the fees collected by the department under this section shall be deposited in the water rights tracking system account established in RCW 90.14.240)) Fees collected by the department under this section must be deposited in the water rights processing account established in RCW 90.03.650.
     (((16) Except for the fees relating to the inspection of hydraulic works and the examination of plans and specifications of controlling works provided for in subsections (7) and (8) of this section, nothing in this section is intended to grant authority to the department to amend the fees in this section by adoption of rules or otherwise)) (15)(a) In addition to the other fees in this section, the department must recover from applicants the full cost of processing all applications for new water rights and applications for change, transfer, or amendment received after or awaiting the initiation of application processing as of the effective date of this section. The department shall only charge the fees due in advance of each phase of processing as provided in (c) and (d) of this subsection. In processing applications the department must continue to improve efficiency, including fully utilizing technology to streamline processes.
     (b) After an application for a new water right is filed and the filing fee is paid as provided in subsections (1) and (2) of this section and prior to initiating the first phase of evaluation of the application, the department must provide in writing an initial assessment that estimates the cost and scope of issues likely involved in processing the applications from a water source. The purpose of this initial assessment is to assist the applicant in making a decision whether to proceed with having the department make a formal determination on their water right application. Such an assessment must be made with the department's best professional judgment based on the information available to the department at that time. If additional information will need to be collected or studies will have to be conducted to answer the applicable tests for issuing a permit or change approval, the department must, to the extent possible, disclose to the applicant the time and cost that the department estimates will be incurred. The department's initial assessment under this subsection does not constitute an appealable action or a final decision by the department. The department must recover the department's cost of performing an initial water right processing assessment from those applicants who elect to proceed with having a formal determination made on their application.
     (c) After the initial assessment, processing of the application must be made in the following phases with the fees for each phase payable before the department undertakes the action in that phase of processing:
     (i) Determination of the availability of water;
     (ii) Determination of whether any existing water right or the public interest would be impaired;
     (iii) Preparation of a report of examination and issuance and recording of a permit to appropriate water.
     (d) After an application for a change, transfer, or amendment of a water right is filed and the filing fee is paid as provided in subsection (3) of this section, processing of the application must be made in the following phases with the fees for each phase payable before the department undertakes the action in that phase of processing:
     (i) Review of the extent and validity of the water right proposed for change, transfer, or amendment;
     (ii) Determination of whether approval of the change would impair any other water right or, if applicable, the public interest;
     (iii) Preparation of a report of examination and issuance of an authorization to change, transfer, or amend the water right.
     (e) An applicant may withdraw an application at any phase of the sequence of processing provided in (c) or (d) of this subsection by declining to pay the fee. Upon receiving such a notice or upon an applicant's nonresponsiveness to a notice to remit fees, the department shall cancel the application.
     (f) The department must calculate the fee for each phase of processing an application based primarily on the department's projected workload and cost to process the application to a decision and the proportionate quantity of water requested by each applicant when the department is batch processing multiple applications from the same source. For the purposes of assessing the full cost of water right processing under this section, the department must ensure that applicants are charged only for services necessarily related to the processing of their applications.
     (g) Any filing fees that were paid by the applicant under other requirements of this section must be credited against the applicant's share of the cost of processing applications under this subsection.
     (h) An applicant for municipal supply or community domestic supply may request that processing of an application be deferred due to the applicant not being ready to proceed with development of the proposed water use at that time. A request to defer an application must be accompanied by a statement of the reason that deferral is necessary, including the projected timing for development of the water under the application. A deferred application retains its priority date if an annual fee is paid that is equal to ten percent of the estimated cost to process the application under this section.
     (i) Revenue collected from these fees must be deposited into the water rights processing account created in RCW 90.03.650. The applicant must transmit the processing fee within ninety days of the department's notice of fees due.
     (j) If the department does not have sufficient technical staff resources or specialized expertise needed to make its determinations on applications, it may elect to utilize a consultant from its cost-reimbursement consultant list established under RCW 90.03.265. The cost of the consultant must be included in the processing fees.
     (k) The department must fully recover its costs related to providing water users mitigation credits, issued as a result of water banking under chapters 90.42 and 90.38 RCW.
     (l) The goal of the department is to process all pending applications by July 30, 2017, such that the average waiting period to receive a decision is no longer than one year for new applications received after that date.

NEW SECTION.  Sec. 402   A new section is added to chapter 90.03 RCW to read as follows:
     The department may adopt a new fee schedule by rule to implement the requirements of RCW 90.03.470. The fees must be based on the department's actual cost to carry out the actions for which fees are charged in RCW 90.03.470.

NEW SECTION.  Sec. 403   A new section is added to chapter 90.03 RCW to read as follows:
     (1) The department must submit a report to the governor and the legislature on the status of water rights processing by November 30, 2012, and by November 30th of every even-numbered year thereafter through 2020. The report must include the numbers of applications received, decisions rendered, applications pending, decisions appealed, decisions rendered by conservancy boards, decisions made through use of cost-reimbursement contractors, decisions made under expedited processing provisions, number of staff assigned to processing water rights, and efficiency measures implemented. The department shall also develop and report on performance measures for water rights processing.
     (2) By September 1, 2011, the department shall explore ways to make the state's water resource management program financially self-sufficient and shall submit a report to the office of financial management and appropriate committees of the legislature regarding recommended actions and legislation needed to implement a preferred approach.

NEW SECTION.  Sec. 501   Sections 202, 204, and 303 of this act expire June 30, 2019.

NEW SECTION.  Sec. 502   Sections 203, 205, and 304 of this act take effect June 30, 2019.

NEW SECTION.  Sec. 503   RCW 90.14.240 (Water rights tracking system account) and 2005 c 412 s 3 are each repealed.

NEW SECTION.  Sec. 504   Nothing in this act may be interpreted or administered in a manner that impairs or diminishes a valid water right, including rights established under state law and rights established under federal law.

NEW SECTION.  Sec. 505   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.