Read first time 01/29/2003.   Referred to Committee on Fisheries, Ecology & Parks.

     AN ACT Relating to cost-reimbursement agreements between state agencies and permit applicants; and amending RCW 43.21A.690, 43.30.420, 43.70.630, 43.300.080, 70.94.085, 90.03.265, and 43.42.070.

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

Sec. 1   RCW 43.21A.690 and 2000 c 251 s 2 are each amended to read as follows:
     (1) The department may enter into a written cost-reimbursement agreement with a permit applicant ((for a complex project)) to recover from the applicant the reasonable costs incurred by the department in carrying out the requirements of this chapter, as well as the requirements of other relevant laws, as they relate to permit coordination, environmental review, application review, technical studies, and permit processing. The cost-reimbursement agreement shall identify the specific tasks, costs, and schedule for work to be conducted under the agreement. ((For purposes of this section, a complex project is a project for which an environmental impact statement is required under chapter 43.21C RCW.))
     (2) The written cost-reimbursement agreement shall be negotiated with the permit applicant. Under the provisions of a cost- reimbursement agreement, funds from the applicant shall be used by the department to contract with an independent consultant to carry out the work covered by the cost-reimbursement agreement. The department may also use funds provided under a cost-reimbursement agreement to assign current staff to review the work of the consultant, to provide necessary technical assistance when an independent consultant with comparable technical skills is unavailable, and to recover reasonable and necessary direct and indirect costs that arise from processing the permit. The department shall, in developing the agreement, ensure that final decisions that involve policy matters are made by the agency and not by the consultant. The department shall make an estimate of the number of permanent staff hours to process the permits, and shall contract with consultants to replace the time and functions committed by these permanent staff to the project. The billing process shall provide for accurate time and cost accounting and may include a billing cycle that provides for progress payments. Use of cost-reimbursement agreements shall not reduce the current level of staff available to work on permits not covered by cost-reimbursement agreements. The department may not use any funds under a cost-reimbursement agreement to replace or supplant existing funding. The restrictions of chapter 42.52 RCW apply to any cost-reimbursement agreement, and to any person hired as a result of a cost-reimbursement agreement.
     (3) The department may not enter into any new cost-reimbursement agreements on or after July 1, ((2005)) 2007. The department may continue to administer any cost-reimbursement agreement ((which)) that was entered into before July 1, ((2005)) 2007, until the project is completed.

Sec. 2   RCW 43.30.420 and 2000 c 251 s 3 are each amended to read as follows:
     (1) The department may enter into a written cost-reimbursement agreement with a permit or lease applicant ((for a complex project)) to recover from the applicant the reasonable costs incurred by the department in carrying out the requirements of this chapter, as well as the requirements of other relevant laws, as they relate to permit coordination, environmental review, application review, technical studies, and permit or lease processing. The cost-reimbursement agreement shall identify the specific tasks, costs, and schedule for work to be conducted under the agreement. ((For purposes of this section, a complex project is a project for which an environmental impact statement is required under chapter 43.21C RCW.)) An applicant for a lease issued under chapter 79.90 RCW may not enter into a cost-reimbursement agreement under this section for projects conducted under the lease.
     (2) The written cost-reimbursement agreement shall be negotiated with the permit or lease applicant. Under the provisions of a cost-reimbursement agreement, funds from the applicant shall be used by the department to contract with an independent consultant to carry out the work covered by the cost-reimbursement agreement. The department may also use funds provided under a cost-reimbursement agreement to assign current staff to review the work of the consultant, to provide necessary technical assistance when an independent consultant with comparable technical skills is unavailable, and to recover reasonable and necessary direct and indirect costs that arise from processing the permit or lease. The department shall, in developing the agreement, ensure that final decisions that involve policy matters are made by the agency and not by the consultant. The department shall make an estimate of the number of permanent staff hours to process the permits or leases, and shall contract with consultants to replace the time and functions committed by these permanent staff to the project. The billing process shall provide for accurate time and cost accounting and may include a billing cycle that provides for progress payments. Use of cost-reimbursement agreements shall not reduce the current level of staff available to work on permits or leases not covered by cost-reimbursement agreements. The department may not use any funds under a cost-reimbursement agreement to replace or supplant existing funding. The restrictions of chapter 42.52 RCW apply to any cost-reimbursement agreement, and to any person hired as a result of a cost-reimbursement agreement.
     (3) The department may not enter into any new cost-reimbursement agreements on or after July 1, ((2005)) 2007. The department may continue to administer any cost-reimbursement agreement ((which)) that was entered into before July 1, ((2005)) 2007, until the project is completed.

Sec. 3   RCW 43.70.630 and 2000 c 251 s 4 are each amended to read as follows:
     (1) The department may enter into a written cost-reimbursement agreement with a permit applicant ((for a complex project)) to recover from the applicant the reasonable costs incurred by the department in carrying out the requirements of this chapter, as well as the requirements of other relevant laws, as they relate to permit coordination, environmental review, application review, technical studies, and permit processing.
The cost-reimbursement agreement shall identify the specific tasks, costs, and schedule for work to be conducted under the agreement. ((For purposes of this section, a complex project is a project for which an environmental impact statement is required under chapter 43.21C RCW.))
     (2) The written cost-reimbursement agreement shall be negotiated with the permit applicant. Under the provisions of a cost-reimbursement agreement, funds from the applicant shall be used by the department to contract with an independent consultant to carry out the work covered by the cost-reimbursement agreement. The department may also use funds provided under a cost-reimbursement agreement to assign current staff to review the work of the consultant, to provide necessary technical assistance when an independent consultant with comparable technical skills is unavailable, and to recover reasonable and necessary direct and indirect costs that arise from processing the permit. The department shall, in developing the agreement, ensure that final decisions that involve policy matters are made by the agency and not by the consultant. The department shall make an estimate of the number of permanent staff hours to process the permits, and shall contract with consultants to replace the time and functions committed by these permanent staff to the project. The billing process shall provide for accurate time and cost accounting and may include a billing cycle that provides for progress payments. Use of cost-reimbursement agreements shall not reduce the current level of staff available to work on permits not covered by cost-reimbursement agreements. The department may not use any funds under a cost-reimbursement agreement to replace or supplant existing funding. The restrictions of chapter 42.52 RCW apply to any cost-reimbursement agreement, and to any person hired as a result of a cost-reimbursement agreement.
     (3) The department may not enter into any new cost-reimbursement agreements on or after July 1, ((2005)) 2007. The department may continue to administer any cost-reimbursement agreement ((which)) that was entered into before July 1, ((2005)) 2007, until the project is completed.

Sec. 4   RCW 43.300.080 and 2000 c 251 s 5 are each amended to read as follows:
     (1) The department may enter into a written cost-reimbursement agreement with a permit applicant ((for a complex project)) to recover from the applicant the reasonable costs incurred by the department in carrying out the requirements of this chapter, as well as the requirements of other relevant laws, as they relate to permit coordination, environmental review, application review, technical studies, and permit processing. The cost-reimbursement agreement shall identify the specific tasks, costs, and schedule for work to be conducted under the agreement. ((For purposes of this section, a complex project is a project for which an environmental impact statement is required under chapter 43.21C RCW.))
     (2) The written cost-reimbursement agreement shall be negotiated with the permit applicant. Under the provisions of a cost-reimbursement agreement, funds from the applicant shall be used by the department to contract with an independent consultant to carry out the work covered by the cost-reimbursement agreement. The department may also use funds provided under a cost-reimbursement agreement to assign current staff to review the work of the consultant, to provide necessary technical assistance when an independent consultant with comparable technical skills is unavailable, and to recover reasonable and necessary direct and indirect costs that arise from processing the permit. The department shall, in developing the agreement, ensure that final decisions that involve policy matters are made by the agency and not by the consultant. The department shall make an estimate of the number of permanent staff hours to process the permits, and shall contract with consultants to replace the time and functions committed by these permanent staff to the project. The billing process shall provide for accurate time and cost accounting and may include a billing cycle that provides for progress payments. Use of cost-reimbursement agreements shall not reduce the current level of staff available to work on permits not covered by cost-reimbursement agreements. The department may not use any funds under a cost-reimbursement agreement to replace or supplant existing funding. The restrictions of chapter 42.52 RCW apply to any cost-reimbursement agreement, and to any person hired as a result of a cost-reimbursement agreement.
     (3) The department may not enter into any new cost-reimbursement agreements on or after July 1, ((2005)) 2007. The department may continue to administer any cost-reimbursement agreement ((which)) that was entered into before July 1, ((2005)) 2007, until the project is completed.

Sec. 5   RCW 70.94.085 and 2000 c 251 s 6 are each amended to read as follows:
     (1) An authority may enter into a written cost-reimbursement agreement with a permit applicant ((for a complex project)) to recover from the applicant the reasonable costs incurred by the authority in carrying out the requirements of this chapter, as well as the requirements of other relevant laws, as they relate to permit coordination, environmental review, application review, technical studies, and permit processing. The cost-reimbursement agreement shall identify the specific tasks, costs, and schedule for work to be conducted under the agreement. ((For purposes of this section, a complex project is a project for which an environmental impact statement is required under chapter 43.21C RCW.))
     (2) The written cost-reimbursement agreement shall be negotiated with the permit applicant. Under the provisions of a cost-reimbursement agreement, funds from the applicant shall be used by the air pollution control authority to contract with an independent consultant to carry out the work covered by the cost-reimbursement agreement. The air pollution control authority may also use funds provided under a cost-reimbursement agreement to assign current staff to review the work of the consultant, to provide necessary technical assistance when an independent consultant with comparable technical skills is unavailable, and to recover reasonable and necessary direct and indirect costs that arise from processing the permit. The air pollution control authority shall, in developing the agreement, ensure that final decisions that involve policy matters are made by the agency and not by the consultant. The air pollution control authority shall make an estimate of the number of permanent staff hours to process the permits, and shall contract with consultants to replace the time and functions committed by these permanent staff to the project. The billing process shall provide for accurate time and cost accounting and may include a billing cycle that provides for progress payments. Use of cost-reimbursement agreements shall not reduce the current level of staff available to work on permits not covered by cost-reimbursement agreements. The air pollution control authority may not use any funds under a cost-reimbursement agreement to replace or supplant existing funding. The provisions of chapter 42.52 RCW apply to any cost-reimbursement agreement, and to any person hired as a result of a cost-reimbursement agreement. Members of the air pollution control authority's board of directors shall be considered as state officers, and employees of the air pollution control authority shall be considered as state employees, for the sole purpose of applying the restrictions of chapter 42.52 RCW to this section.
     (3) An air pollution control authority may not enter into any new cost-reimbursement agreements on or after July 1, ((2005)) 2007. The ((department [authority])) authority may continue to administer any cost-reimbursement agreement ((which)) that was entered into before July 1, ((2005)) 2007, until the project is completed.

Sec. 6   RCW 90.03.265 and 2000 c 251 s 7 are each amended to read as follows:
     Any applicant for a new withdrawal or a change, transfer, or amendment of a water right pending before the department, may initiate a cost-reimbursement agreement with the department to provide expedited review of the application. A cost-reimbursement agreement may only be initiated under this section if the applicant agrees to pay for, or as part of a cooperative effort agrees to pay for, the cost of processing his or her application and all other applications from the same source of supply which must be acted upon before the applicant's request because they were filed prior to the date of when the applicant filed. The department shall use the process established under RCW 43.21A.690 for entering into cost-reimbursement agreements((, except that it is not necessary for an environmental impact statement to be filed as a prerequisite for entering into a cost-reimbursement agreement under this section)).

Sec. 7   RCW 43.42.070 and 2002 c 153 s 8 are each amended to read as follows:
     (1) The office may coordinate negotiation and implementation of a written agreement among the project applicant, the office, and participating permit agencies to recover from the project applicant the reasonable costs incurred by the office in carrying out the provisions of RCW 43.42.050(2) and 43.42.060(2) and by participating permit agencies in carrying out permit processing tasks specified in the agreement.
     (2) The office may coordinate negotiation and implementation of a written agreement among the project applicant, the office, and participating permit agencies to recover from the project applicant the reasonable costs incurred by outside independent consultants selected by the office and participating permit agencies to perform permit processing tasks.
     (3) Outside independent consultants may only bill for the costs of performing those permit processing tasks that are specified in a cost- reimbursement agreement under this section. The billing process shall provide for accurate time and cost accounting and may include a billing cycle that provides for progress payments.
     (4) The office shall adopt a policy to coordinate cost- reimbursement agreements with outside independent consultants. Cost- reimbursement agreements coordinated by the office under this section must be based on competitive bids that are awarded for each agreement from a prequalified consultant roster.
     (5) Independent consultants hired under a cost-reimbursement agreement((,)) shall report directly to the permit agency. The office shall assure that final decisions are made by the permit agency and not by the consultant.
     (6) The office shall develop procedures for determining, collecting, and distributing cost reimbursement for carrying out the provisions of this chapter.
     (7) For a cost-reimbursement agreement, the office and participating permit agencies shall negotiate a work plan and schedule for reimbursement. Prior to distributing scheduled reimbursement to the agencies, the office shall verify that the agencies have met the obligations contained in their work plan.
     (8) Prior to commencing negotiations with the project applicant for a cost-reimbursement agreement, the office shall request work load analyses from each participating permitting agency. These analyses shall be available to the public. The work load of a participating permit agency may only be modified with the concurrence of the agency and if there is both good cause to do so and no significant impact on environmental review.
     (9) The office shall develop guidance to ensure that, in developing cost-reimbursement agreements, conflicts of interest are eliminated.
     (10) For project permit processes that it coordinates, the office shall coordinate the negotiation of all cost-reimbursement agreements executed under RCW 43.21A.690, 43.30.420, 43.70.630, 43.300.080, and 70.94.085. The office and the permit agencies shall be signatories to the agreements. Each permit agency shall manage performance of its portion of the agreement.
     (11) If a permit agency or the project applicant foresees, at any time, that it will be unable to meet its obligations under the cost- reimbursement agreement, it shall notify the office and state the reasons. The office shall notify the participating permit agencies and the project applicant and, upon agreement of all parties, adjust the schedule, or, if necessary, coordinate revision of the work plan.