BILL REQ. #:  Z-0953.1 

Prefiled 12/24/2003. Read first time 01/12/2004.   Referred to Committee on Agriculture & Natural Resources.

     AN ACT Relating to the department of natural resources' authority for compensatory mitigation management on state-owned aquatic lands; reenacting and amending RCW 43.79A.040; and adding a new chapter to Title 79 RCW.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that the existing federal and state regulatory framework for wetland mitigation is an important tool used to offset impacts to aquatic resources.
     (2) The legislature further finds that national and state studies have shown that additional measures are needed to ensure the long-term success of compensatory mitigation sites. Because impacts to aquatic resources often take place on state-owned aquatic lands, the department should implement new strategies to ensure that individual compensatory mitigation sites and mitigation bank sites on state-owned aquatic lands are properly planned for and permanently protected.
     (3) The legislature further finds that establishing mitigation banks on state-owned aquatic lands and securing funding for permanent management of compensatory mitigation sites and mitigation bank sites will improve the environmental success of compensatory mitigation through appropriate site selection, long-term management, and consolidation of multiple small mitigation sites into larger, comprehensive mitigation sites.

NEW SECTION.  Sec. 2   (1) "Compensatory mitigation" means the process of restoring, creating, enhancing, or preserving uplands, wetlands, or other aquatic resources for the purposes of compensating for unavoidable adverse impacts that remain after all appropriate and practicable avoidance and minimization has been achieved. "Compensatory mitigation" includes mitigation that:
     (a) Occurs at the same time as, or in advance of, a project's planned environmental impacts;
     (b) Is located in a site either on, near, or distant from the project's impacts; and
     (c) Provides either the same or different biological functions and values as the functions and values impacted by the project.
     (2) "Compensatory mitigation site" means a geographic location where compensatory mitigation takes place.
     (3) "Credit" means a unit of trade representing the increase in the ecological value of the site, as measured by acreage, functions, and/or values, or by some other assessment method.
     (4) "Department" means the department of natural resources.
     (5) "In-lieu compensatory mitigation" means payment to a natural resource management entity for the purpose of conducting compensatory mitigation for project impacts.
     (6) "Mitigation" means the sequential process of avoiding impacts, minimizing impacts, and compensating for remaining unavoidable impacts.
     (7) "Mitigation bank" is a public or private business venture that restores, creates, enhances, or, in exceptional circumstances, preserves natural resources for the purpose of providing compensatory mitigation in advance of authorized impacts to similar resources.
     (8) "Mitigation bank site" means a geographic location where a mitigation bank undertakes restoration, creation, enhancement, and preservation activities.

NEW SECTION.  Sec. 3   The department may accept money, from public or private entities, for the purpose of creating an endowment that generates funds used for the long-term monitoring, maintenance, and management of compensatory mitigation sites and mitigation bank sites, as defined by the regulatory framework and the department, located on state-owned aquatic lands. The amount of money necessary to establish an endowment to cover the costs of long-term monitoring, maintenance, and management must be determined prior to the department assuming management responsibility for each site. The amount of money necessary to establish an endowment is based on the specific conditions of the compensatory mitigation site and the long-term management plan for the site, as approved by state or federal regulators. These moneys must be deposited into the aquatic lands compensatory mitigation endowment account established in section 5 of this act.

NEW SECTION.  Sec. 4   The department is authorized to sell mitigation bank credits from a department mitigation bank on state-owned aquatic lands, upon approval by appropriate federal or state regulatory agencies, or both. The department shall sell the credits for no less than market value. Market value for mitigation bank credits sold by the department must be determined using current market or appraisal techniques, as appropriate.
     Revenue from the sale of mitigation bank credits generated by a department mitigation bank on state-owned aquatic lands must be deposited into the aquatic lands compensatory mitigation endowment account established in section 5 of this act. All moneys received by the department from the sale of mitigation bank credits from a mitigation site on state-owned aquatic lands in excess of the long-term management endowment for that site must be deposited according to RCW 79.90.245 and 79.64.040, and paid to towns according to RCW 79.92.110.

NEW SECTION.  Sec. 5   The aquatic lands compensatory mitigation endowment account is created in the custody of the state treasurer. All receipts from moneys received by the department for the purpose of creating long-term management endowments must be deposited into the account. Expenditures from the account may be used only for the sole purpose of generating revenues for conducting the long-term monitoring, maintenance, and management of compensatory mitigation sites and mitigation bank sites on state-owned aquatic lands. The moneys in the account must be pooled and invested for the benefit of all compensatory mitigation sites and mitigation bank sites that have been established under this chapter. The account must be administered by the state investment board. The principal of the account is irreducible. Disbursements of the interest and investment earnings, less the allocations to the state investment board expense account under RCW 43.33A.160, from the account must be made to the aquatic lands compensatory mitigation management account, created in section 6 of this act, upon authorization of the commissioner of public lands, and the director of the state investment board. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION.  Sec. 6   The aquatic lands compensatory mitigation management account is created in the custody of the state treasurer. All receipts from interest and investment earnings from the aquatic lands compensatory mitigation endowment account created in section 5 of this act and in-lieu compensation payments for completing compensatory mitigation projects on state-owned aquatic lands must be deposited into the account. Expenditures from the account may be used solely by the department for the purpose of developing in-lieu compensatory mitigation and performing long-term monitoring, maintenance, and management of compensatory mitigation sites and mitigation bank sites on state-owned aquatic lands. The moneys in the account shall be pooled and expended for the benefit of all compensatory mitigation sites and mitigation bank sites established under this chapter. Only the commissioner of public lands or the commissioner's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

Sec. 7   RCW 43.79A.040 and 2003 c 403 s 9, 2003 c 313 s 10, 2003 c 191 s 7, 2003 c 148 s 15, 2003 c 92 s 8, and 2003 c 19 s 12 are each reenacted and amended to read as follows:
     (1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.
     (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.
     (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.
     (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington promise scholarship account, the college savings program account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the students with dependents grant account, the basic health plan self-insurance reserve account, the contract harvesting revolving account, the Washington state combined fund drive account, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the fruit and vegetable inspection account, the game farm alternative account, the grain inspection revolving fund, the juvenile accountability incentive account, the law enforcement officers' and fire fighters' plan 2 expense fund, the local tourism promotion account, the produce railcar pool account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the sulfur dioxide abatement account, the children's trust fund, and the ((investing in innovation)) aquatic lands compensatory mitigation management account. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the city and county advance right-of-way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.
     (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 8   Sections 1 through 6 of this act constitute a new chapter in Title 79 RCW.