"NEW SECTION.  Sec. 4   (1) The legislature finds that many sewage treatment facilities in the Puget Sound watershed manage excess capacity not by building extra containment facilities or minimizing passive introductions, but by allowing raw and untreated human sewage and storm drain collections to flow directly into the Puget Sound. This practice, although destructive to the Puget Sound's ecosystem, is a legal activity and an accepted practice under the national pollution discharge elimination system permit held by most sewage treatment facilities.
     (2) The legislature further finds that recent years have brought with them significant investments in the health of Puget Sound, both by the state, federal government, tribal governments, nonprofit organizations, and the business community. These investments have come in the form of policy initiatives, financial contributions, and countless hours of volunteer labor.
     (3) The legislature further finds that although sewage treatment facilities may be technically allowed to discharge untreated sewage into the Puget Sound, that does not mean that the entities responsible for the facilities should be entitled to receive recognition as a Puget Sound partner, and the benefits that come with the designation, while actively embracing policies that result in a significant undermining of the investments made to restore the health of Puget Sound.
     (4) Therefore, it is the intent of the legislature to avoid the creation of a mechanism that rewards sewage treatment facilities for operating in a way that is destructive to the health of Puget Sound, and to send a strong message to sewage treatment facilities that there is a difference between how they are legally permitted to operate and how they should choose to operate as good neighbors to a treasured and imperiled aquatic ecosystem.

Sec. 5   RCW 90.71.340 and 2007 c 341 s 16 are each amended to read as follows:
     (1) The legislature intends that fiscal incentives and disincentives be used as accountability measures designed to achieve consistency with the action agenda by:
     (a) Ensuring that projects and activities in conflict with the action agenda are not funded;
     (b) Aligning environmental investments with strategic priorities of the action agenda; and
     (c) Using state grant and loan programs to encourage consistency with the action agenda.
     (2) The council shall adopt measures to ensure that funds appropriated for implementation of the action agenda and identified by proviso or specifically referenced in the omnibus appropriations act pursuant to RCW 43.88.030(1)(g) are expended in a manner that will achieve the intended results. In developing such performance measures, the council shall establish criteria for the expenditure of the funds consistent with the responsibilities and timelines under the action agenda, and require reporting and tracking of funds expended. The council may adopt other measures, such as requiring interagency agreements regarding the expenditure of provisoed or specifically referenced Puget Sound funds.
     (3) The partnership shall work with other state agencies providing grant and loan funds or other financial assistance for projects and activities that impact the health of the Puget Sound ecosystem under chapters 43.155, 70.105D, 70.146, 77.85, 79.105, 79A.15, 89.08, and 90.50A RCW to, within the authorities of the programs, develop consistent funding criteria that prohibits funding projects and activities that are in conflict with the action agenda.
     (4)(a)(i) The partnership shall develop a process and criteria by which entities that consistently achieve outstanding progress in implementing the action agenda are designated as Puget Sound partners.
     (ii) No public entity may be named a Puget Sound partner if that entity operates a sewage treatment system and:
     (A) Has as a condition of its national pollution discharge elimination system permit, or other government approval of its operations, a provision to discharge untreated sewage into the Puget Sound during storm events; and
     (B) Has actually discharged more than one million gallons of untreated sewage in any one hour, either lawfully or unlawfully, into the Puget Sound within the previous five years.
     (b) State agencies shall work with the partnership to revise their grant, loan, or other financial assistance allocation criteria to create a preference for entities designated as Puget Sound partners for funds allocated to the Puget Sound basin, pursuant to RCW 43.155.070, 70.105D.070, 70.146.070, 77.85.130, 79.105.150, 79A.15.040, 89.08.520, and 90.50A.040. This process shall be developed on a timeline that takes into consideration state grant and loan funding cycles.
     (5) Any entity that receives state funds to implement actions required in the action agenda shall report biennially to the council on progress in completing the action and whether expected results have been achieved within the time frames specified in the action agenda."