AN ACT Relating to management of state-owned aquatic lands; amending RCW 79.90.465, 79.90.475, 79.90.520, and 79.93.040; and adding a new section to chapter 79.90 RCW.

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

Sec. 1. RCW 79.90.465 and 1984 c 221 s 4 are each amended to read as follows:

The definitions in this section apply throughout chapters 79.90 through 79.96 RCW.

(1) "Water-dependent use" means a use which cannot logically exist in any location but on the water. Examples include, but are not limited to, water-borne commerce; terminal and transfer facilities; ferry terminals; watercraft sales in conjunction with other water-dependent uses; watercraft construction, repair, and maintenance; moorage and launching facilities; aquaculture; log booming; and public fishing piers and parks.

(2) "Water-oriented use" means a use which historically has been dependent on a waterfront location, but with existing technology could be located away from the waterfront. Examples include, but are not limited to, wood products manufacturing, watercraft sales, fish processing, petroleum refining, sand and gravel processing, log storage, and house boats. For the purposes of determining rent under this chapter, water-oriented uses shall be classified as water-dependent uses if the activity either is conducted on state-owned aquatic lands leased on October 1, 1984, or was actually conducted on the state-owned aquatic lands for at least three years before October 1, 1984. If, after October 1, 1984, the activity is changed to a use other than a water-dependent use, the activity shall be classified as a nonwater-dependent use. If continuation of the existing use requires leasing additional state-owned aquatic lands and is permitted under the shoreline management act of 1971, chapter 90.58 RCW, the department may allow reasonable expansion of the water-oriented use.

(3) "Nonwater-dependent use" means a use which can operate in a location other than on the waterfront. Examples include, but are not limited to, hotels, condominiums, apartments, restaurants, retail stores, and warehouses not part of a marine terminal or transfer facility.

(4) "Log storage" means the water storage of logs in rafts or otherwise prepared for shipment in water-borne commerce, but does not include the temporary holding of logs to be taken directly into a vessel or processing facility.

(5) "Log booming" means placing logs into and taking them out of the water, assembling and disassembling log rafts before or after their movement in water-borne commerce, related handling and sorting activities taking place in the water, and the temporary holding of logs to be taken directly into a processing facility. "Log booming" does not include the temporary holding of logs to be taken directly into a vessel.

(6) "Department" means the department of natural resources.

(7) "Port district" means a port district created under Title 53 RCW.

(8) The "real rate of return" means the average for the most recent ten calendar years of the average rate of return on conventional real property mortgages as reported by the federal home loan bank board or any successor agency, minus the average inflation rate for the most recent ten calendar years.

(9) The "inflation rate" for a given year is the percentage rate of change in the previous calendar year's all commodity producer price index of the bureau of labor statistics of the United States department of commerce. If the index ceases to be published, the department shall designate by rule a comparable substitute index.

(10) "Public utility lines" means pipes, conduits, and similar facilities for distribution of water, electricity, natural gas, telephone, other electronic communication, and sewers, including sewer outfall lines.

(11) "Terminal" means a point of interchange between land and water carriers, such as a pier, wharf, or group of such, equipped with facilities for care and handling of cargo and/or passengers.

(12) "State-owned aquatic lands" means those aquatic lands and waterways administered by the department of natural resources or managed under RCW 79.90.475 by a port district. "State-owned aquatic lands" does not include aquatic lands owned in fee by, or withdrawn for the use of, state agencies other than the department of natural resources.

(13) "City" means a city or town created under Title 35 or 35A RCW.

(14) "Marina" means a waterfront facility that provides moorage for recreation vessels, charter vessels, commercial fishing vessels, and water-based aircraft. A marina facility may include fuel docks and associated chandlery activities designed to serve recreational vessels, charter vessels, commercial fishing vessels, and water-based aircraft.

Sec. 2. RCW 79.90.475 and 1984 c 221 s 6 are each amended to read as follows:

Upon request of a port district, the department and port district may enter into an agreement authorizing the port district to manage state-owned aquatic lands ((~~abutting or used in conjunction with and contiguous to uplands owned, leased, or otherwise managed by a port district,~~)) for port purposes as provided in Title 53 RCW. The lands that may be included in a port district aquatic lands management agreement are those state-owned aquatic lands abutting or used in conjunction with and contiguous to uplands owned, leased, or otherwise managed by a port district. If a port district owns or operates a public marina facility within a bay where the distance between the headlands at the entrance to the bay is two miles or less, the state-owned aquatic lands beneath the marina facility shall also be eligible for management by the port district under a management agreement.

((~~Such~~)) A port district aquatic lands management agreement shall include, but not be limited to, provisions defining the specific area to be managed, the term, conditions of occupancy, reservations, periodic review, and other conditions to ensure consistency with the state Constitution and the policies of this chapter. If a port district acquires operating management, lease, or ownership of real property which abuts state-owned aquatic lands currently under lease from the state to a person other than the port district, the port district shall manage such aquatic lands if: (1) The port district acquires the leasehold interest in accordance with state law, or (2) the current lessee and the department agree to termination of the current lease to accommodate management by the port. The administration of aquatic lands covered by a port district aquatic lands management agreement shall be consistent with the aquatic land policies of chapters 79.90 through 79.96 RCW and the implementing ((~~regulations~~)) rules adopted by the department. The administrative procedures for management of the lands shall be those of Title 53 RCW.

No rent shall be due the state for the use of state-owned aquatic lands managed under this section for water-dependent or water-oriented uses. If a port district manages state-owned aquatic lands under this section and either leases or otherwise permits any person to use such lands, the rental fee attributable to such aquatic land only shall be comparable to the rent charged lessees for the same or similar uses by the department: PROVIDED, That a port district need not itemize for the lessee any charges for state-owned aquatic lands improved by the port district for use by carriers by water. If a port leases state-owned aquatic lands to any person for nonwater-dependent use, eighty-five percent of the revenue attributable to the rent of the state-owned aquatic land only shall be paid to the state.

Upon application for a management agreement, and so long as the application is pending and being diligently pursued, no rent shall be due the department for the lease by the port district of state-owned aquatic lands included within the application for water-dependent or water-oriented uses.

The department and representatives of the port industry shall develop a proposed model management agreement which shall be used as the basis for negotiating the management agreements required by this section. The model management agreement shall be reviewed and approved by the board of natural resources.

NEW SECTION. Sec. 3. A new section is added to chapter 79.90 RCW to read as follows:

(1) Upon request of a city, the department and city may enter into an agreement authorizing the city to manage state-owned aquatic lands for the purpose of operating a publicly owned marina. The lands that may be included in a city aquatic lands management agreement are those state-owned aquatic lands abutting or used in conjunction with and contiguous to uplands owned, leased, or otherwise managed by a city. All state-owned aquatic lands beneath any publicly owned marina developed or maintained by a city are eligible for management by the city under a management agreement.

A city aquatic lands management agreement shall include, but not be limited to, provisions defining the specific area to be managed, the term, conditions of occupancy, reservations, periodic review, and other conditions to ensure consistency with the state Constitution and the policies of this chapter. If a city acquires operating management, lease, or ownership of real property that abuts state-owned aquatic lands currently under lease from the state to a person other than the city, the city shall manage the aquatic lands if: (a) The city acquires the leasehold interest in accordance with state law, or (b) the current lessee and the department agree to termination of the current lease to accommodate management by the city. The administration of aquatic lands covered by a city aquatic lands management agreement shall be consistent with the aquatic land policies of chapters 79.90 through 79.96 RCW and the implementing rules adopted by the department. The administrative procedures for management of the lands shall be those of Title 35 or 35A RCW, whichever is appropriate.

No rent is due the state for the use of state-owned aquatic lands managed under this section for water-dependent or water-oriented uses. If a city manages state-owned aquatic lands under this section and either leases or otherwise permits any person to use the lands, the rental fee attributable to the aquatic land only shall be comparable to the rent charged lessees for the same or similar uses by the department. If a city leases state-owned aquatic lands to any person for nonwater-dependent use, eighty-five percent of the revenue attributable to the rent of the state-owned aquatic land only shall be paid to the state.

Upon application for a management agreement, and so long as the application is pending and being diligently pursued, no rent is due the department for the lease by the city of state-owned aquatic lands included within the application for water-dependent or water-oriented uses.

The department and representatives of the association of Washington cities shall develop a proposed model management agreement that shall be used as the basis for negotiating the management agreements required by this section. The model management agreement shall be reviewed and approved by the board of natural resources.

(2) A city that operates a publicly owned marina within the territorial limits of a port district shall obtain the approval of the port commission prior to applying to the department for a management agreement. A city with marina facilities in existence on the effective date of this act may enter into a management agreement for those facilities without port commission approval.

Sec. 4. RCW 79.90.520 and 1991 c 64 s 1 are each amended to read as follows:

The manager shall, by rule, provide for an administrative review of any aquatic land rent proposed to be charged. The rules shall require that the lessee or applicant for release file a request for review within thirty days after the manager has notified the lessee or applicant of the rent due. For leases issued by the department, the final authority for the review rests with the board of natural resources. For leases managed under RCW 79.90.475, the final authority for the review rests with the appropriate port commission. For leases managed under section 3 of this act, the final authority for the review rests with the appropriate city legislative authority. If the request for review is made within thirty days after the manager's final determination as to the rental, the lessee may pay rent at the preceding year's rate pending completion of the review, and shall pay any additional rent or be entitled to a refund, with interest thirty days after announcement of the decision. The interest rate shall be fixed, from time to time, by rule adopted by the board of natural resources and shall not be less than six percent per annum. Nothing in this section abrogates the right of an aggrieved party to pursue legal remedies. For purposes of this section, "manager" is the department except where state-owned aquatic lands are managed by a port district or a city, in which case "manager" is the appropriate port district or city.

Sec. 5. RCW 79.93.040 and 1984 c 221 s 21 are each amended to read as follows:

If the United States government has established pierhead lines within a waterway created under the laws of this state at any distance from the boundaries established by the state, structures may be constructed in that strip of waterway between the waterway boundary and the nearest pierhead line only with the consent of the department of natural resources and upon such plans, terms, and conditions and for such term as determined by the department. However, no permit shall extend for a period longer than thirty years.

The department may cancel any permit upon sixty days' notice for a substantial breach by the permittee of any of the permit conditions.

If a waterway is within the territorial limits of a port district, the duties assigned by this section to the department may be exercised by the port commission of such port district as provided in RCW 79.90.475. If a waterway is within the territorial limits of a city, the duties assigned by this section to the department may be exercised by the city as provided in section 3 of this act.

Nothing in this section shall confer upon, create, or recognize in any abutting owner any right or privilege in or to any strip of waterway abutting any street and between prolongations of the lines of such street, but the control of and the right to use such strip is hereby reserved to the state of Washington, except as authorized by RCW 79.90.475 and section 3 of this act.