BILL REQ. #:  Z-0360.1 

Read first time 01/14/2005.   Referred to Committee on Economic Development, Agriculture & Trade.

     AN ACT Relating to management of water resources for the mainstem of the Columbia river; amending RCW 43.84.092; reenacting and amending RCW 43.84.092; adding a new chapter to Title 90 RCW; providing effective dates; providing an expiration date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The legislature finds that the Columbia river is a vital economic, cultural, and natural resource to the state and its residents, and that the water of the mainstem of the river provides critical support for municipal and agricultural uses, fish and wildlife habitat, power production, and scenic and recreational uses. While conflict and competition among these uses has prevailed in recent years, the legislature recognizes the need for state action and state investment to reliably secure the economic and natural resource benefits associated with the water of the Columbia river. It is the intent of the legislature to establish a new state water resource management program for the mainstem of the Columbia river in order to meet the water supply needs of growing communities and the local economies on which they depend, and to do so in a manner that protects and enhances the quality of the natural environment, including streamflows necessary for the preservation of environmental values.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of ecology.
     (2) "Mainstem account" means the Columbia river mainstem account.
     (3) "Program" means the Columbia river mainstem water management program.

NEW SECTION.  Sec. 3   (1) The Columbia river mainstem water management program is hereby established. The goals of this water management program are to:
     (a) Meet the water supply needs of growing communities and the local economies on which they depend by providing a timely and affordable supply of water that will allow for new and reliable uses of water from the Columbia river mainstem; and
     (b) Manage water to protect and enhance the quality of the natural environment, including streamflows necessary for the preservation of environmental values by securing and dedicating water to improve streamflows in the river mainstem.
     (2) The objectives of the program are to:
     (a) Improve the reliability of water rights issued by the department between 1980 and 2003 that are subject to minimum instream flows or other mitigation conditions to protect streamflows;
     (b) Improve streamflows during the primary period of fish outmigration on the mainstem; and
     (c) Mitigate for the streamflow impacts of future water right permits as provided by the program.
     (3) The department shall administer the program.

NEW SECTION.  Sec. 4   (1) The department must implement the program by:
     (a) Acquiring water for the Columbia river mainstem through the implementation of water conservation programs, changes in water management with existing water storage and conveyance facilities, the development of new or expanded multipurpose water storage projects, the acquisition of water rights from willing sellers or donors, and other means, as authorized and funded by the legislature for the purposes of the program;
     (b) Securing water acquired under (a) of this subsection in the Columbia river mainstem account under the state trust water right program; and
     (c) Managing the mainstem account to make water available as mitigation to willing applicants and to improve streamflows in the Columbia river mainstem for the benefit of fish.
     (2) Water may be deposited in the mainstem account in accordance with applicable state laws for water right changes, amendments, and transfers, or through government-to-government agreements, contracts, assignments, and other instruments that ensure that a highly reliable and long-term supply of water, in sufficient quantity, is available in the mainstem account to meet identified needs. For the purposes of this chapter, the department may secure water from Canada and other governments to be deposited in, and accounted for, in the mainstem account.
     (3) Two-thirds of the water secured and deposited in the mainstem account shall be allocated as mitigation water for new water uses through a state mitigation program. One-third of the water shall be permanently retained in the mainstem account to improve streamflows.
     (4) The department shall manage water in the mainstem account that is dedicated to improving streamflows in collaboration with the department of fish and wildlife. The department of fish and wildlife shall consult with natural resource managers in tribal governments and federal agencies on how to maximize the benefits to fish from this water.
     (5) The amount of water in the mainstem account shall not govern, be used to regulate, or be a determinative factor in the department's water management decisions for water in rivers that are tributary to the Columbia river.

NEW SECTION.  Sec. 5   (1) The requirements of this section are applicable to any new water uses authorized by the department under this chapter.
     (2) New water uses that would reduce the streamflows of the Columbia river mainstem below Chief Joseph dam during the period of April through August must be mitigated to avoid any reduction in streamflows during this period. Mitigation must be secured and in place before new water uses are authorized under this chapter.
     (3) Applicants for new water right permits may develop their own mitigation proposal, to be included as part of their application, or they may participate in the state's mitigation program by requesting water from the mainstem account. Mitigation proposals developed by an applicant must meet the requirements of subsection (2) of this section. Where an applicant develops their own mitigation proposal, the department must allocate water from the mainstem account to benefit streamflows in the amount of one-half of the mitigation amount.

NEW SECTION.  Sec. 6   (1) An applicant for a new water right permit, or a party seeking mitigation water for their existing water right permit, from the Columbia river mainstem may request water from the mainstem account. If sufficient mitigation water is available in the mainstem account, the department shall enter into an agreement with the requesting party to make mitigation water available consistent with the requirements of this chapter.
     (2) In exchange for mitigation water from the mainstem account, the department shall require and collect an annual payment based on the quantity of mitigation water specified in the agreement. For new permits authorized under this chapter that will rely on mitigation from the mainstem account, the department shall condition these permits to require annual payment for the mitigation. The department shall deposit those payments in the Columbia river mainstem investment account created under section 8 of this act.
     (3) The amount of the annual payment shall be established by rule by the department. In determining the payment rates, the department shall consider the following factors:
     (a) Recovering the state's costs of acquiring water for the mainstem account, including the administrative costs for managing the mainstem account; and
     (b) Ensuring an affordable supply of water to meet economic and community development goals.
     (4) In all cases, the costs of acquiring water dedicated to improving streamflows shall be borne by the public and not by the water user.

NEW SECTION.  Sec. 7   (1) Where mitigation that meets the requirements of section 5(2) of this act is secured, the department must:
     (a) Issue permits that could be exercised during periods of drought in lieu of existing water right permits and certificates that are subject to interruption when streamflows on the mainstem are below adopted minimum instream flows; and
     (b) Process pending and future applications for new water right permits for the mainstem of the Columbia river.
     (2) Water users seeking drought permits under subsection (1)(a) of this section must submit an application by December 31, 2008.
     (3) All applications for new water rights under this chapter will be processed in accordance with RCW 90.03.250 through 90.03.330 and other applicable provisions of law. For applications where mitigation that meets the requirements of section 5(2) of this act is secured, the department may process those applications ahead of previously filed applications for which mitigation is not secured.

NEW SECTION.  Sec. 8   (1) The Columbia river mainstem investment account is hereby created in the state treasury. All receipts from Columbia river-related mitigation agreements entered into by the department under this chapter and any other money appropriated by the legislature must be deposited into the account. Money in the account may be spent only after appropriation.
     (2) Expenditures from the account may be used only for the purposes of this chapter, including, but not limited to, the following:
     (a) Site evaluation, feasibility, environmental studies, design and engineering, and construction of off-channel storage facilities, including aquifer storage facilities;
     (b) Activities and investments necessary to acquire water from conservation projects;
     (c) Infrastructure evaluation, feasibility, environmental evaluation, design and engineering, and construction modifying existing storage facilities to provide additional capacity;
     (d) Installation and monitoring streamflow and water measurement devices;
     (e) Administration of the Columbia river water management program and compliance activities associated with the program;
     (f) Acquisition of water through agreements with other governments or federal agencies;
     (g) Acquisition of existing state water rights from willing sellers; and
     (h) Bond issuance, sales, and debt service.

Sec. 9   RCW 43.84.092 and 2003 c 361 s 602, 2003 c 324 s 1, 2003 c 150 s 2, and 2003 c 48 s 2 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury 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) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     (a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the Columbia river mainstem investment account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the election account, the emergency reserve fund, The Evergreen State College capital projects account, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public works assistance account, the Puyallup tribal settlement account, the regional transportation investment district account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (b) 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 aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

Sec. 10   RCW 43.84.092 and 2004 c 242 s 60 are each amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury 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) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     (a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the Columbia river mainstem investment account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the election account, the emergency reserve fund, The Evergreen State College capital projects account, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public works assistance account, the Puyallup tribal settlement account, the regional transportation investment district account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (b) 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 aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 11   (1) The department shall adopt rules as necessary to implement the program. Rules must be consistent with this chapter and with other applicable laws.
     (2) The department shall establish a monitoring program to track conditions relevant to the effectiveness of the program, including, but not limited to, the condition of streamflows in the mainstem, and the number, types, and quantities of water uses approved under this chapter.
     (3) The department shall implement a compliance program, consistent with RCW 90.03.605, to ensure compliance with the requirements of this chapter. The department shall appoint one or more water masters for the Columbia river mainstem to provide local technical assistance, and to conduct other necessary compliance actions.

NEW SECTION.  Sec. 12   The department shall prepare a biennial report on the status of the program. The report shall be transmitted to the appropriate standing committees of the legislature and the governor by December 31st of even-numbered years. The report shall include, but not be limited to, information and evaluation of the status of the mainstem account, the number, types, and quantities of authorized new uses of water, the number and amount of payments collected under the program, a summary of compliance monitoring and enforcement activities on the Columbia river mainstem, including water use measurement and reporting, the streamflow conditions in the mainstem and in the primary tributaries to the Columbia river, and the current and anticipated future conditions of water supplies in the mainstem account and how those water supplies correspond to current and anticipated future water needs.

NEW SECTION.  Sec. 13   Ten years after the effective date of this section, and every ten years thereafter, the department shall conduct a formal review of the effectiveness of the program. The review shall include independent evaluations of the economic and scientific information that provide the premises of the program. As part of the biennial report required by section 12 of this act, the department shall notify the governor and legislature of the timing and proposed process for the formal review and shall request funding to conduct the necessary independent reviews as part of their biennial budget request to the governor. Upon completion of the review, the department shall prepare and transmit a report of the findings of the review, including any recommendations for legislative changes to the program.

NEW SECTION.  Sec. 14   Nothing in this act may be interpreted or administered in a manner that impairs or diminishes a valid water right, including rights established under state law and rights established under federal law.

NEW SECTION.  Sec. 15   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 16   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately, except for section 9 of this act which takes effect July 1, 2005, and section 10 of this act which takes effect July 1, 2006.

NEW SECTION.  Sec. 17   Section 9 of this act expires July 1, 2006.

NEW SECTION.  Sec. 18   Sections 1 through 8 and 11 through 16 of this act constitute a new chapter in Title 90 RCW.