BP BHEAD INT S

AN ACT Relating to financing watershed planning and implementation; amending RCW 86.26.007, 86.26.007, 82.24.027, 82.26.025, and 70.146.030; adding a new section to chapter 39.42 RCW; adding a new section to chapter 43.135 RCW; adding a new section to chapter 43.21A RCW; adding a new chapter to Title 90 RCW; providing an effective date; providing for submission of certain sections of this act to a vote of the people; and declaring an emergency.

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

NEW SECTION. Sec. 1. FINDINGS AND PURPOSE. (1) Washington's waters are critical to the economic and environmental well-being of this state's citizens but the state's water and watersheds are seriously threatened. The legislature finds these problems pose great uncertainty for those who depend on watersheds for their economic and environmental well-being, and that the problems increase the risk of federal or judicial interventions stemming from noncompliance with state law and federal treaties and laws.

(2) The most effective way to plan, manage, and protect the watershed is at the local level, where there is an intimate relationship with the watershed and concern about how the watershed is to be used. A locally based process that incorporates watershed-wide and regional perspectives is best suited to bring competing interests together to resolve their needs in a mutually acceptable manner.

(3) While recognizing the state has a broad-based public interest in water management, a key role of state agencies is to support and complement locally based efforts through technical and financial assistance and coordination of state programs and resource management activities.

(4) The legislature finds that greater emphasis must be placed upon implementation of locally developed watershed plans and that the state should assist such implementation through funding assistance.

(5) In recognition of these findings, the purpose of this chapter is to support a comprehensive and integrated approach to watershed management and to support implementation of locally based watershed plans to benefit the economic and environmental health of watersheds.

NEW SECTION. Sec. 2. DEFINITIONS. The definitions in this section apply throughout this chapter, unless the context clearly requires otherwise.

(1) "Projects" refers to those activities identified within an ongoing or completed watershed plan that would generally qualify for capital budget funding.

(2) "Qualified government entity" means general purpose local governments, federally recognized tribal governments, or a consortium of those two types of governments that have the statutory land use authority to engage in water-related planning and management on a regional basis and that have within their jurisdictions a majority of the population and nonfederal land in the watershed.

(3) "Watershed" means a watershed administrative unit as defined in WAC 222-22-020, or an identified and definable subset of a watershed administrative unit, WRIA as defined in WAC 173-500-040, or a definable subset or combination of watershed administrative units and WRIAs.

NEW SECTION. Sec. 3. FUNDING CRITERIA FOR WATERSHED PLAN IMPLEMENTATION. (1) Ongoing or completed watershed plans under this chapter shall meet each of the following criteria to be eligible for funding under this chapter:

(a) The geographic scope of the watershed plan shall be at a minimum, an identified and definable subset of a watershed administrative unit;

(b) The watershed plan must identify and recommend projects to address, in an integrated and coordinated manner, including one or more of the following: Water quality, water availability, fish habitat, wildlife habitat, flooding, water conservation and reuse, and drinking water;

(c) The watershed plan must include a finance plan for identified projects; watershed plans may rely on formal agreements with other entities to provide nonstate funding for plan implementation;

(d) The watershed plan must provide a mechanism to evaluate the progress and effectiveness of projects and plan implementation;

(e) The watershed plan must be consistent with state and federal law, and shall not conflict with Indian treaties or the beneficial use of existing water rights. The watershed plan must be coordinated and consistent with local, adopted growth management act plans and development regulations. The watershed plan is not to supplant or supercede existing watershed analysis programs and implementing requirements as authorized in state law; and

(f) The ongoing or completed watershed plan must be adopted by the qualified government entity applying for funding.

(2) Priority ranking shall be granted to watershed plans that meet one or more of the following additional criteria:

(a) The geographic scope of a watershed plan includes an entire watershed administrative unit or a WRIA;

(b) The watershed plan is comprehensive in scope, identifying and addressing in an integrated manner one or more of the following: Water quantity, water quality, drinking water, fish habitat, wildlife habitat, flooding, recreation, agricultural or economic development, regional transportation, SEPA and the growth management act integration, and other land use or watershed planning efforts;

(c) The watershed plan is endorsed by a broad-based watershed council or group representing the major interests in the watershed;

(d) The watershed plan has received more than a twenty-five percent commitment of funding or in-kind support from local government, federal agencies, tribal governments, business, or other nonstate sources;

(e) The watershed plan is approved as a habitat conservation plan or is approved as an element of a habitat conservation plan under the terms of the federal endangered species act, or contributes significantly to recovering species listed or proposed for listing under the federal endangered species act or state law under WAC 232‑12‑011, 232-12-014, and 232-12-297 and helps prevent future listings under those laws;

(f) Watershed plan implementation and monitoring includes a volunteer component that incorporates training and other support for volunteer efforts;

(g) The watershed plan contributes significantly to resolving water resource issues in basins closed to new water withdrawals, watersheds chronically impacted by droughts, and watersheds with significant water quality impairment;

(h) The watershed plan includes significant water conservation measures or water reuse measures;

(i) The watershed plan is integrated with a comprehensive flood hazard management plan that has been updated in the last five years and has been made an optional element of the local government's growth management act comprehensive plan;

(j) The watershed plan is developed under chapter 400-12 WAC in the Puget Sound basin; and

(k) The watershed plan is cost-effective.

(3) The interagency committee for outdoor recreation shall adopt rules pursuant to chapter 34.05 RCW to implement this chapter.

NEW SECTION. Sec. 4. APPLICATION FOR FUNDING. Those qualified governmental entities applying to the interagency committee for outdoor recreation for funding under this chapter shall:

(1) Submit a watershed plan document detailing how it meets the criteria specified in section 3 of this act;

(2) Provide a list of prioritized projects within the watershed plan for which funding is sought with estimates for costs and time of completion for each project; and

(3) Provide evidence of the twenty-five percent match requirement.

NEW SECTION. Sec. 5. STATE REVIEW. (1) The interagency committee for outdoor recreation shall convene an interagency team whose duty is to review and evaluate watershed plans submitted for funding consideration. The interagency team shall create a prioritized list of watershed plans and funding recommendations based on how well they meet the funding criteria outlined in section 3 of this act. The interagency team shall consist of nine members with a representative from each of the following:

(a) The department of agriculture;

(b) The department of ecology;

(d) The department of health;

(e) The department of community, trade, and economic development;

(f) The department of transportation;

(g) The department of natural resources;

(h) The state conservation commission; and

(i) The Puget Sound water quality action team.

(2) The interagency committee for outdoor recreation shall convene a watershed plan implementation panel to review the prioritized list of watershed plans created by the interagency team. Based on this list, the panel shall make formal, prioritized funding recommendations to the governor to assist with implementing watershed plans.

(3) The thirteen-member watershed plan implementation panel shall consist of a citizen from each of the nine congressional districts in the state, a representative each from city and county governments, and two representatives from tribal governments. Members of the panel shall have expertise in issues related to watershed planning. The panel shall, upon request of the interagency committee for outdoor recreation, also advise the interagency committee for outdoor recreation on program rules, policies, and procedures. The director of the interagency committee for outdoor recreation shall appoint the members of the panel who may serve a maximum term of three years. Citizen members of the panel shall receive reimbursement for their travel expenses as provided in RCW 43.03.050 and 43.03.060.

(4) State funding for projects that are part of the implementation of a watershed plan shall total no more than seventy-five percent of project costs. The local match may include a proportionate share of watershed plan costs and project design costs. The maximum amount of state funding a watershed plan may receive per biennium shall total no more than four million dollars, which must be expended to implement projects in priority order as identified within the watershed plan. Funding shall be prioritized to those watershed plans not eligible under other state funding programs, including but not limited to programs funded by the public works assistance account in RCW 43.155.050, the water quality account in RCW 70.146.030, referendum 26 funds in the state and local improvements revolving account in RCW 43.83A.030, referendum 38 funds in the state and local improvements revolving account in RCW 43.83B.030, referendum 39 funds in the state and local improvements revolving account, waste disposal facilities in RCW 43.99F.030, the water pollution control revolving fund in RCW 90.50A.020, and the Washington wildlife recreation program.

NEW SECTION. Sec. 6. GOVERNOR APPROVAL. (1) Before October 1st of each even-numbered year, the panel shall submit to the governor a prioritized list of watershed plans and projects contained within those watershed plans for funding under this chapter.

NEW SECTION. Sec. 7. LEGISLATIVE APPROVAL. (1) The legislature may remove watershed plans from the list recommended by the governor, but may not add watershed plans and projects contained within those watershed plans to the list recommended by the governor.

(2) With the exception of plans funded under section 8 of this act that do not require legislative approval or the specific lists of watershed plans, the interagency committee for outdoor recreation shall not sign contracts or otherwise financially obligate funds for watershed plans as provided in this chapter before the legislature has appropriated funds from the watershed resources account created in section 9 of this act for a specific list of watershed plans.

NEW SECTION. Sec. 8. EARLY ACTION PROJECTS. (1) For watershed plans funded for the biennium ending June 30, 1999, the interagency committee for outdoor recreation shall follow the procedures outlined in sections 3 through 5 of this act and submit a prioritized list of watershed plans to the governor by April 5, 1998.

(2) The governor may remove watershed plans from the list recommended by the panel, but may not add watershed plans and projects contained within those watershed plans to the list recommended by the panel. The governor shall forward his approved list of watershed plans to the interagency committee for outdoor recreation by May 1, 1998, for funding implementation. Only those watershed plans with funding recommendations from the governor shall receive grants under this chapter.

NEW SECTION. Sec. 9. BOND AUTHORIZATION. (1) For the purpose of providing funds for programs and projects to address water quantity, water quality, flooding, and fisheries habitat, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of two hundred fifty-eight million dollars or so much thereof as may be required to finance the implementation of watershed plans that meet the criteria outlined in section 5 of this act, and all costs incidental thereto. No bonds authorized by this section may be offered for sale without prior legislative appropriation of the net proceeds of sale of bonds.

(2) The proceeds from the sale of bonds authorized by this section shall be deposited in the watershed resources account created in the state treasury. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for the purposes specified in this chapter and for payment of the expenses incurred in the issuance and sale of the bonds.

(3) The proceeds from the sale of bonds deposited in the watershed resources account of the general fund under the terms of this chapter shall be administered by the interagency committee for outdoor recreation subject to legislative appropriation. The interagency committee for outdoor recreation may use or permit the use of any funds derived from the sale of bonds authorized under this section by direct expenditures and by grants or loans to public bodies, including grants to public bodies as matching funds for federal, local, and other funds that may be available on a matching basis. The interagency committee for outdoor recreation may use up to three percent of the proceeds from the sale of these bonds to evaluate projects and administer grants.

(4) The state finance committee is authorized to prescribe the form, terms, conditions, prices, and covenants of the bonds, the time or times of sale of all or any portion of them, and the conditions and manner of their sale and issuance.

(5) The state general obligation bond retirement fund shall be used for the payment of the principal of and interest on the bonds authorized in this section.

(6) The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount needed in the ensuing fiscal year to meet the bond retirement and interest requirements. On each date that any interest or interest and principal payment is due, the state treasurer shall withdraw from any general state revenues received in the state treasury and deposit it in the general obligation bond retirement fund an amount equal to the amount certified by the state finance committee to be due on the payment date.

(7) The bonds issued under subsection (1) of this section shall state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due.

(8) The legislature may provide additional means for raising moneys for the payment of the principal and interest of the bonds authorized in this section, and this section shall not be deemed to provide an exclusive method for such payment.

(9) The bonds authorized in this section are a legal investment for all state funds or for funds under state control and for all funds of any other public body.

NEW SECTION. Sec. 10. EXEMPTION FROM STATUTORY DEBT LIMIT. The bonds authorized in this chapter are exempt from the statutory limitations of indebtedness under RCW 39.42.060.

NEW SECTION. Sec. 11. EXEMPTION FROM INITIATIVE 601 EXPENDITURE LIMIT. Funds transferred or expended under sections 9 and 15 of this act shall not be considered a money transfer under RCW 43.135.035(4) nor an expenditure subject to the expenditure limit established under RCW 43.135.025.

NEW SECTION. Sec. 12. CAPTIONS NOT LAW. Captions used in this chapter do not constitute any part of the law.

NEW SECTION. Sec. 13. A new section is added to chapter 39.42 RCW to read as follows:

The bonds authorized in chapter 90.-- RCW (sections 1 through 12 of this act) are exempt from the statutory limitations of indebtedness under RCW 39.42.060.

NEW SECTION. Sec. 14. A new section is added to chapter 43.135 RCW to read as follows:

Funds transferred or expended under sections 9 and 15 of this act shall not be considered a money transfer under RCW 43.135.035(4) nor an expenditure subject to the expenditure limit established under RCW 43.135.025.

Sec. 15. RCW 86.26.007 and 1997 c . . . s 16 (section 16 of this act) are each amended to read as follows:

Sec. 16. RCW 86.26.007 and 1996 c 283 s 903 are each amended to read as follows:

The flood control assistance account is hereby established in the state treasury. At the beginning of the 1997-99 fiscal biennium and each biennium thereafter the state treasurer shall transfer from the general fund to the flood control assistance account an amount of money which, when combined with money remaining in the account from the previous biennium, will equal four million dollars. Moneys in the flood control assistance account may be spent only after appropriation for purposes specified under this chapter ((~~or, during the 1995-97 biennium,~~)) and for state and local response and recovery costs associated with federal emergency management agency (FEMA) disasters ((number 1079 (November/December 1995 storms), FEMA disaster number 1100 (February 1996 floods), and for prior biennia disaster recovery costs. To the extent that moneys in the flood control assistance account are not appropriated during the 1995-97 fiscal biennium for flood control assistance, the legislature may direct their transfer to the state general fund)).

Sec. 17. RCW 82.24.027 and 1986 c 3 s 12 are each amended to read as follows:

There is hereby levied and there shall be collected by the department of revenue from the persons mentioned in and in the manner provided by this chapter, an additional tax upon the sale, use, consumption, handling, possession, or distribution of cigarettes in an amount equal to the rate of four mills per cigarette.

The moneys collected under this section shall be deposited in the water quality account under RCW 70.146.030 ((~~through June 30, 2021, and in the general fund thereafter~~)).

Sec. 18. RCW 82.26.025 and 1986 c 3 s 14 are each amended to read as follows:

(1) In addition to the taxes imposed under RCW 82.26.020, there is levied and there shall be collected a tax upon the sale, use, consumption, handling, or distribution of all tobacco products in this state at the rate of sixteen and three-fourths percent of the wholesale sales price of such tobacco products. Such tax shall be imposed at the time the distributor (a) brings, or causes to be brought, into this state from without the state tobacco products for sale, (b) makes, manufactures, or fabricates tobacco products in this state for sale in this state, or (c) ships or transports tobacco products to retailers in this state, to be sold by those retailers.

(2) The moneys collected under this section shall be deposited in the water quality account under RCW 70.146.030 ((~~through June 30, 2021, and in the general fund thereafter~~)).

NEW SECTION. Sec. 19. A new section is added to chapter 43.21A RCW to read as follows:

WATER RESOURCE ADMINISTRATION ACCOUNT. The water resource administration account is hereby created in the state treasury. Moneys deposited in the account shall be administered by the department of ecology and are subject to legislative appropriation. Moneys in the account may be used for watershed-related activities, including but not limited to:

(1) State agency programs in support of local watershed planning and implementation efforts;

(2) Water resource data management programs;

(3) Administration of the water right permit processing program;

(4) Basin assessments;

(5) Setting of instream flows;

(6) Programs that promote water conservation;

(7) Implementation of the Puget Sound water quality action plan; and

(8) Salmon recovery programs.

Sec. 20. RCW 70.146.030 and 1996 c 37 s 2 are each amended to read as follows:

(1) The water quality account is hereby created in the state treasury. Moneys in the account may be used only in a manner consistent with this chapter. Moneys deposited in the account shall be administered by the department of ecology and shall be subject to legislative appropriation. Moneys placed in the account shall include tax receipts as provided in RCW 82.24.027, 82.26.025, and 82.32.390, principal and interest from the repayment of any loans granted pursuant to this chapter, and any other moneys appropriated to the account by the legislature.

(2) The department may use or permit the use of any moneys in the account to make grants or loans to public bodies, including grants to public bodies as cost-sharing moneys in any case where federal, local, or other funds are made available on a cost-sharing basis, for water pollution control facilities and activities, or for purposes of assisting a public body to obtain an ownership interest in water pollution control facilities and/or to defray a part of the payments made by a public body to a service provider under a service agreement entered into pursuant to RCW 70.150.060, within the purposes of this chapter and for related administrative expenses. No more than three percent of the moneys deposited in the account may be used by the department to pay for the administration of the grant and loan program authorized by this chapter.

(3) Beginning with the biennium ending June 30, 1997, the department shall present a biennial progress report on the use of moneys from the account to the chairs of the senate committee on ways and means and the house of representatives committee on appropriations. The first report is due June 30, 1996, and the report for each succeeding biennium is due December 31 of the odd-numbered year. The report shall consist of a list of each recipient, project description, and amount of the grant, loan, or both.

(4) ((~~During the fiscal biennium ending June 30, 1997,~~)) Moneys in the account may be transferred by the legislature to the water right permit processing account and the water resource administration account.

NEW SECTION. Sec. 21. Sections 1 through 12 of this act constitute a new chapter in Title 90 RCW.

NEW SECTION. Sec. 22. The secretary of state shall submit sections 1 through 15 and 21 of this act to the people for their adoption and ratification, or rejection, at the general election to be held in this state on the Tuesday next succeeding the first Monday in November 1997, in accordance with the provisions of section 3, Article VIII of the Constitution of the state of Washington, as amended, and section 1, Article II of the Constitution of the state of Washington as amended, and the laws adopted to facilitate the operation thereof.

NEW SECTION. Sec. 23. Sections 16 through 20 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect July 1, 1997.