Finds that current concern over the rapid and increasing loss of rural, agricultural, and forested land has led to the exploration of creative approaches to preserving these important lands.

Finds also that the creation of a regional transfer of development rights marketplace will assist in slowing the conversion of these lands.

Determines that it is good public policy to build upon existing transfer of development rights programs, pilot projects, and private initiatives that foster effective use of transferred development rights through the creation of a market-based program that focuses on the central Puget Sound region.

Requires the department to submit recommendations, findings, and legislative recommendations according to the following schedule: (1) By December 1, 2007, the department shall submit a report to the governor and appropriate committees of the legislature on the progress of the regional transfer of development rights program. The report must also include identification of other candidate transfer of development areas and proposals to modify grant criteria for local governments;

(2) By December 1, 2008, the department shall submit a final report to the governor and the appropriate committees of the legislature on the progress of the regional transfer of development rights program; and

(3) By December 1, 2008, the department shall submit findings and legislative recommendations, including draft legislation if needed to implement the recommendations and strategies identified in the final report, to the appropriate committees of the legislature.