Background: Building Permits and Subdivision Approvals. Under the State Building Code, an applicant for a building permit for a building that requires potable water must provide evidence of an adequate water supply for the intended use of the building. The evidence may be in the form of a water right permit from Ecology, a letter from an approved water purveyor stating the purveyor's ability to provide water, or another form verifying the existence of an adequate water supply. The process by which land divisions, including subdivisions, dedications, and short subdivisions may occur is governed by state and local requirements. Local governments, the entities charged with receiving and determining land division proposals, must adopt associated ordinances and procedures in conforming with state requirements.

GMA. The GMA is the comprehensive land use planning framework for counties and cities in Washington. Originally enacted in 1990 and 1991, GMA establishes land use designation and environmental protection requirements for all Washington counties and cities, and additional planning duties for the 28 counties and the cities within them that fully plan under GMA. The GMA directs counties and cities that fully plan under GMA to adopt internally consistent comprehensive plans that are generalized, coordinated land use policy statements of the governing body. Comprehensive plans must address specified planning elements, including a land use element and a rural element, each of which is a subset of a comprehensive plan.

Water Rights. Washington operates under a water right permit system. With certain exceptions, new rights to use surface or ground water must be established according to the permit system. Exemptions include any withdrawal of public groundwater for stock watering purposes, for watering a lawn, or for a noncommercial garden less than one-half acre. Single or group domestic uses or industrial purposes not exceeding 5000 gallons a day are also exempt.

Ecology must consider a four-part test when deciding whether to issue a new water right, specifically whether: (1) water is available, (2) a beneficial use of water would be made, (3) granting the right would impair existing rights, and (4) the proposed use would detrimentally affect the public welfare. If an application passes this test, Ecology issues a permit which establishes a time table for constructing the infrastructure to access the water and for putting water to beneficial use. When the conditions of the permit are satisfied, Ecology issues a water right certificate.

Instream Flow Rules. Ecology has the authority to adopt rules establishing a minimum water flow for streams, lakes, or other public water bodies for the purposes of protecting fish, game, birds, and the recreational and aesthetic values of the waterways. These minimum water flow levels, commonly called instream flows, function as water rights with a priority date set at the adoption date of the corresponding rule. The instream flow cannot affect an existing water right with a senior priority date.

Watershed Planning. The Watershed Planning Act establishes a process through which local groups can develop and implement plans for managing and protecting local water resources and rights. The local groups authorized to develop watershed plans are organized by WRIAs.

Summary of Bill (First Substitute): Building Permits and Subdivisions. In WRIAs where instream flow rules have been adopted that explicitly regulate permit-exempt groundwater withdrawals, evidence of an adequate water supply must be consistent with the specific applicable rule requirements. In WRIAs where instream flow rules have been adopted that do not explicitly regulate permit-exempt groundwater withdrawals, evidence of an adequate water supply must meet certain requirements described below or meet the requirements adopted as part of a WRE Plan. An applicant may provide other evidence of an adequate water supply that complies with the water code and the groundwater act. In certain WRIAs or within certain WRIAs, Ecology may impose requirements under certain circumstances. Within specified WRIAs, restrictions may apply due to a 2013 Supreme Court decision. In all other areas of the state, evidence of potable water may consist of a water well report.

If water supply is to be provided by a permit-exempt groundwater withdrawal, the applicant's compliance with the groundwater statute and with applicable instream flow rules is sufficient in determining appropriate provisions for water supply for a subdivision, dedication, or short subdivision.

GMA and County Planning. For the purposes of complying with the GMA relating to surface and groundwater resources, a county or city may rely on or refer to applicable minimum instream flow rules adopted by Ecology. Development regulations must ensure that proposed water uses are consistent with the permit-exempt groundwater statute and with applicable rules when making building permit and subdivision decisions.

Amendments to the Intent of the Water Resources Act. It is the intent of the Legislature to protect and restore healthy stream flows for instream resources, which will aid in recovery of depleted salmonid populations, support properly functioning ecosystems, and provide for the general welfare of the citizens of the state. The Legislature also intends to ensure that a legal and reliable domestic water supply is available for its citizens.

WRE Committees and WRE Plans. Ecology must establish a WRE committee in WRIAs where instream flow rules have been adopted that do not explicitly regulate permit-exempt groundwater withdrawals. Ecology chairs the WRE committee and invites representatives from:

each federally recognized tribe with reservation land in the WRIA;
each federally recognized tribe with usual and accustomed harvest areas in the WRIA;
Department of Fish and Wildlife;
each county and city in the WRIA;
a representative from the largest irrigation district in the WRIA;
a representative from the largest publicly owned water purveyor in the WRIA; and
a representative from the local residential construction industry in the WRIA.

Ecology must adopt a WRE plan no later than June 30, 2021, in collaboration with the WRE committee. All members of the WRE committee must approve the plan.

The WRE plan should include recommendations for projects and actions that will measure, protect, and enhance instream resources and improve watershed functions that support the recovery of threatened and endangered salmonids. Plan recommendations may include, but are not limited to, acquiring senior water rights, water conservation, water reuse, stream gaging, groundwater monitoring, and developing natural and constructed infrastructure. The WRE Plan must include:

those actions that the WRE committee determines to be necessary in order to offset potential impacts to instream flows associated with permit-exempt domestic and commercial water use;
an evaluation or estimation of the actual cost of offsetting new domestic and commercial uses over the subsequent 20 years; and
estimates of the cumulative consumptive water use impacts over the subsequent 20 years.

Prior to adoption of the WRE plan, Ecology must determine that actions identified in the WRE plan, after accounting for new projected uses of water over the subsequent 20 years, will result in a net ecological benefit to instream resources within the WRIA. Potential impacts on a closed water body and potential impairment to an instream flow for domestic groundwater withdrawals exempt from permitting may be allowed under a WRE plan. After adoption of a WRE plan, Ecology must evaluate the plan recommendations and initiate rule making if necessary. Modification of fees or water use quantities may not be applied unless authorized by rules.

If the WRE committee fails to approve the WRE plan by June 30, 2021, Ecology must submit the final draft plan to the Salmon Recovery Funding Board and request that the board provide a technical review and make recommendations. Ecology must consider the recommendations and may amend the WRE plan without WRE committee approval prior to adoption.

Permit-Exempt Wells in Certain WRIAs. Until a WRE plan is approved and rules are adopted, a city, town, or county issuing a building permit or approving a subdivision in certain WRIAs must:

record relevant restrictions or limitations with the property title;
collect fees of $500 and transmit $350 to Ecology;
record the number of building permits or subdivisions issued under these restrictions;
annually transmit an accounting of building permits and subdivision approvals; and
until rules have been adopted that specify otherwise, require the following measures: (1) limit domestic use to a maximum withdrawal of 950 gallons per day per connection; and (2) that the applicant manage stormwater runoff on-site to the extent practicable.

Upon the issuance of a drought emergency order, Ecology may curtail these exempt groundwater withdrawals to no more than 350 gallons per day per connection for indoor use only. The provisions related to domestic permit-exempt groundwater withdrawals in the bill only applies to new domestic groundwater withdrawals in certain WRIAs and does not restrict permit-exempt groundwater withdrawals for other use

Duties. Ecology must initiate a pilot project in a priority WRIA to measure water use from all new groundwater withdrawals and to determine the overall feasibility of measuring water use for all new groundwater withdrawals. Ecology must submit a report to the Legislature by December 31, 2020, and December 31, 2027, that includes:

progress in completing and adopting WRE Plans;
a description of program projects and expenditures and potential or planned projects;
an assessment of the streamflow restoration and enhancement benefits from program projects;
a listing of other efforts taken associated with streamflow restoration and enhancement, projects to benefit instream resources, and other watershed improvements; and
the total number of new withdrawals exempt from permitting authorized in each WRIA, and estimates of consumptive water use impacts associated with the new withdrawals.

Cause of Action. The ability of any person to pursue a cause of action for the protection of the person's water right is not affected by this bill.

Joint Legislative Task Force. A Joint Legislative Task Force (Task Force) is established to review the treatment of surface water and groundwater appropriations as they relate to instream flows and fish habitat, to develop and recommend a mitigation sequencing process and scoring system to address such appropriations, and to review the Washington supreme court decision in Foster v. Department of Ecology, 184 Wn.2d 465, 362 P.3d 9599 (2015). The Task Force must make recommendations to the Legislature by November 15, 2019. Recommendations must be made by a 60 percent majority of the Task Force and the representatives from Ecology, Department of Fish & Wildlife, and Department of Agriculture are not eligible to vote. Ecology must issue permit decisions for up to five water resource mitigation pilot projects. It is the intent of the Legislature to use the pilot projects to inform the Task Force process while also enabling the processing of water right applications that address water supply needs.

Creation of New Accounts. The watershed restoration and enhancement account, the watershed restoration and enhancement taxable bond account and the watershed restoration and enhancement bond account are created. Expenditures from the accounts may be used to assess, plan, and develop projects with priority given to projects in watersheds developing WRE plans. It is the intent of the Legislature to appropriate $300 million for projects until June 30, 2033.

EFFECT OF CHANGES MADE BY AGRICULTURE, WATER, NATURAL RESOURCES & PARKS COMMITTEE (First Substitute): Building Permits, Subdivisions, GMA. Provides that, when issuing building permits, an applicant showing evidence of adequate water supply in certain WRIAs must meet certain provisions. Establishes that, if water supply is to be provided by a permit-exempt groundwater withdrawal, the applicant's compliance with the statute and with applicable instream flow rules is sufficient in determining appropriate provisions for water supply for a subdivision, dedication, or short subdivision. Provides that, for the purposes of complying with the GMA relating to surface and groundwater resources, a county or city may rely on or refer to applicable minimum instream flow rules adopted by Ecology. Provides that development regulations must ensure that proposed water uses are consistent with the permit-exempt groundwater statute and with applicable rules when making building permit and subdivision decisions.

WRE Committees and WRE Plans. Lists the WRIAs in which Ecology must establish WRE committees, adds a representative from an irrigation district, publicly owned water purveyor, and a representative from the local residential construction industry to each WRE committee, and changes the date that WRE plans must be developed to June 30, 2021. Provides that potential impacts on a closed water body and potential impairment to an instream flow for domestic—rather than domestic or commercial—permit-exempt groundwater withdrawals may be allowed under a WRE plan. Establishes that WRE plan recommendations may include standards for water use quantities that are more or less than 950 gallons per day per connection for domestic use. Establishes that modification of fees or water use quantities may not be applied unless authorized by rules.

Permit-Exempt Wells in Certain WRIAs. Changes the fee to $500, with $350 transmitted to Ecology, and establishes that fee revenues must be used within the WRIA in which the fee originated. Changes the maximum annual average withdrawal to 950 gallon per day per connection for domestic use only. Provides that, upon the issuance of a drought emergency order, Ecology may curtail these exempt groundwater withdrawals to no more than 350 gallons per day per connection for indoor use only. Establishes that the provisions related to domestic permit-exempt groundwater withdrawals in the bill only applies to new domestic groundwater withdrawals in certain WRIAs and does not restrict permit-exempt groundwater withdrawals for other uses.

Duties. Removes the requirement that Ecology must initiate rulemaking in at least one WRIA every four years in basins where instream flow rules do not exist. Requires that Ecology purchase and provide meters to be used in the pilot project.

Joint Legislative Task Force. Establishes that one cochair of the Joint Legislative Task Force must be a member of the majority caucus and one must be a member of the minority caucus and establishes that recommendations must be made by a 60 percent majority of the members on the committee. Provides that Ecology may issue water right permit decisions for up to five water resource mitigation pilot projects.

Creation of New Accounts and Appropriation. Removes the bond authorization authority. Expenditures from the accounts may be used to assess, plan, and develop projects with priority given to projects in watersheds developing WRE plans. Provides that the Legislature intends to appropriate $300 million for projects until June 30, 2033.

Staff Summary of Public Testimony on Original Bill: The committee recommended a different version of the bill than what was heard. CON: The Hirst decision has had a negative impact and affected property values. The gallon limitation would be onerous. The limitation on outside watering will have adverse effects on families that want to have a garden. The cost of the permit to use water will be hard on families. Landowners are asking the local government to rezone their property because the landowner cannot get water. The Legislature needs to maintain oversight over agency rules. The WRE committee should have a property owner on the committee. This bill will not solve the problems around the Hirst decision. There needs to be a long-term solution that can be enforced. All water users should share in the costs of hydrologic studies. There is a need for more reservoirs. Domestic groundwater use may not be consumptive and could, in some situations, improve instream flows. Consideration needs to be given to the full hydrologic cycle and the benefits of onsite water recharge. There needs to be options for indoor and outdoor water use. Development needs to be matched with legally available water so that senior water rights are protected and there is not undue harm. Mitigation for water must be considered in the comprehensive plan. Withdrawals should not impair senior water rights and fishery resources. Mitigation should be fully implemented to offset impairment. The use of out of kind mitigation would undermine stream flow restoration. The bill does not adequately protect stream flows. This bill does not have a compliance mechanism and the timeline for adopting new instream flow rules is too long.

OTHER: This bill provides a framework to address the specific challenges from the Hirst decision, but also looking at ensuring healthy streams into the future. This bill focuses on the Hirst decision challenges and streamflow challenges facing the state. This bill attempts to provide a structure for addressing the long-term sustainability of the state's shared water resources. The bill is trying to establish a pathway for comprehensive basin-wide programs that can make improvements to stream flows and habitat, by investing in projects. The bill provides for resource managers in each basin to make improvements that are unique in each basin. The bill is looking to provide a structure to provide a legal supply of water for rural landowners. This bill clarifies that Ecology's instream flow rules regulate water availability and reduces uncertainty for local governments and landowners.