BILL REQ. #:  Z-0492.2 

Read first time 01/14/09.   Referred to Committee on Local Government & Housing.

     AN ACT Relating to the implementation of a regional transfer of development rights program; amending RCW 43.362.005 and 43.362.010; and adding new sections to chapter 43.362 RCW.

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

Sec. 1   RCW 43.362.005 and 2007 c 482 s 1 are each amended to read as follows:
     The legislature 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. The legislature finds also that the creation of a regional transfer of development rights marketplace will assist in slowing the conversion of these lands.
     The legislature further finds that transferring development rights is a market-based technique that encourages the voluntary transfer of growth from places where a community would like to see less development, referred to as sending areas, to places where a community would like to see more development, referred to as receiving areas. Under this technique, permanent deed restrictions are placed on the sending area properties to ensure that the land will be used only for approved activities such as farming, forest management, conservation, or passive recreation. Also under this technique, the costs of purchasing the recorded development restrictions are borne by the developers who receive the building credit or bonus.
     The legislature further finds that a successful transfer of development rights program must consider existing affordable housing and economic development programs and policies in designated receiving areas. Counties, cities, and towns that decide to participate in the regional transfer of development rights program for central Puget Sound are encouraged to adopt comprehensive plan policies and development regulations to implement the program that do not compete or conflict with existing comprehensive plan policies and development regulations that require or encourage affordable housing. Participating cities and towns are also encouraged to use the development of receiving areas to maximize opportunities for economic development that supports creation or retention of jobs that exceed the average county wage.
     Participation in a regional transfer of development rights program by counties, cities, and towns should be as simple as possible.
     Accordingly, the legislature has determined 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. A regional transfer of development rights program in the central Puget Sound should be voluntary, incentive-based, and separate, but compatible with existing local transfer of development rights programs. The legislature further finds that additional counties may benefit from participation in a regional transfer of development rights program in the future. Therefore, the regional transfer of development rights program should be established for the central Puget Sound as the first phase of a program that can be expanded to other counties, replicated in other regions, or expanded statewide in the future.

Sec. 2   RCW 43.362.010 and 2007 c 482 s 2 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Receiving area ratio" means the number or character of development rights that are assigned to a development right for use in a receiving area. Development rights in a receiving area may be used at the discretion of the receiving area jurisdiction, including but not limited to additional residential density, additional building height, additional commercial floor area, or to meet regulatory requirements.
     (2) "Sending area ratio" means the number of development rights that a sending area landowner can sell per acre.
     (3) "By-right permitting" means that project applications for permits that use transferable development rights would be subject to administrative review. Administrative review allows a local planning official to approve a project without noticed public hearings.
     (4) "Department" means the department of community, trade, and economic development.
     (((2))) (5) "Downzone" means a revision to the local zoning ordinance that decreases the allowed density of development or other limitations on the size of development in a sending or receiving area.
     (6) "Nongovernmental entities" includes nonprofit or membership organizations with experience or expertise in transferring development rights.
     (((3))) (7) "Receiving areas" for purposes of this chapter are limited to incorporated cities or towns. Receiving areas are those lands that are designated by a city or town in which transferable development rights from the regional program may be used consistent with this chapter.
     (8) "Regional transfer of development rights program" or "regional program" means the regional transfer of development rights program established by section 3 of this act in central Puget Sound, including King, Pierce, Kitsap, and Snohomish counties and the cities and towns within these counties.
     (9) "Sending area" includes those lands that meet conservation criteria as described in section 4 of this act.
     (10) "Transferable development right" means a right to develop one or more residential units in a sending area that can be sold and transferred for use consistent with a receiving ratio adopted for development in a designated receiving area consistent with the regional program.
     (11) "Transfer of development rights" includes methods for protecting land from development by voluntarily removing the development rights from a sending area and transferring them to a receiving area for the purpose of increasing development density or intensity in the receiving area.

NEW SECTION.  Sec. 3   Subject to the availability of funds appropriated for this specific purpose or another source of funding made available for this purpose, the department shall establish a regional transfer of development rights program in central Puget Sound, including King, Kitsap, Snohomish, and Pierce counties and the cities and towns within these counties. The program must be guided by the Puget Sound regional council's multicounty planning policies adopted under RCW 36.70A.210(7). The regional transfer of development rights program in the central Puget Sound is established as the first phase of a program that can be expanded to other counties, replicated in other regions, or expanded statewide in the future with sufficient funding.
     (1) The purpose of the program is to foster voluntary county, city, and town participation in the program so that interjurisdictional transfers occur between the counties, cities, and towns, including transfers from counties to cities and towns in other counties. Private transactions between buyers and sellers of transferable development rights are allowed and encouraged under this program. In fulfilling the requirements of this chapter, the department shall work with the Puget Sound regional council to implement a regional program.
     (2) The department shall encourage participation by the cities, towns, and counties in the regional program. The regional program shall not be implemented in a manner that negatively impacts existing local programs. The department shall encourage and work to enhance the efforts in any of these counties, cities, or towns to develop local transfer of development rights programs or enhance existing programs.
     (3) Subject to the availability of funds appropriated for this specific purpose or another source of funding made available for this purpose, the department shall do the following to implement a regional transfer of development rights program in central Puget Sound:
     (a) Serve as the central coordinator for state government in the implementation of sections 3 through 7 of this act.
     (b) Offer technical assistance to cities, towns, and counties planning for participation in the regional transfer of development rights program. The department's technical assistance shall:
     (i) Include written guidance for local development and implementation of the regional transfer of development rights program;
     (ii) Include guidance for and encourage permitting or environmental review incentives for developers to participate. Activities may include, but are not limited to, provision for by-right permitting, substantial environmental review of a subarea plan for the receiving area that includes the use of transferable development rights, adoption of a categorical exemption for infill under RCW 43.21C.229 for a receiving area, or adoption of a planned action under RCW 43.21C.240;
     (iii) Provide guidance to counties, cities, and towns to negotiate receiving area ratios and foster private transactions;
     (iv) Provide guidance and encourage planning for receiving areas that do not compete or conflict with existing comprehensive plan policies and development regulations that require or encourage affordable housing;
     (v) Provide guidance and encourage planning for receiving areas that maximizes opportunities for economic development through the creation or retention of jobs that pay above the county average wage; and
     (vi) Discourage adoption of downzones in sending and receiving areas that are solely used to create a transfer of development rights market.
     (c) Work with counties, cities, and towns to inform elected officials, planning commissions, and the public regarding the regional transfer of development rights program. The information provided by the department shall discuss the importance of preserving farmland and farming, and forest land and forestry, to cities and towns and the local economy.
     (d) Based on information provided by the counties, cities, and towns, post on a web site information regarding transfer of development rights transactions and a list of interested buyers and sellers of transferable development rights.
     (e) Coordinate with and provide resources to state and local agencies and stakeholders to provide public outreach.

NEW SECTION.  Sec. 4   (1) Counties shall use the following criteria to guide the designation of sending areas for participation in the regional transfer of development rights program:
     (a) Land designated as agricultural or forest land of long-term commercial significance;
     (b) Land designated rural that is being farmed or managed for forestry; and
     (c) Land whose conservation meets other state and regionally adopted priorities.
     Nothing in these criteria limits a county's authority to designate additional lands as a sending area for conservation under a local county transfer of development rights program.
     (2) Upon purchase of a transferable development right from land designated rural that is being farmed or managed for forestry, a county must include the land from which the right was purchased in any programs it administers for conservation of agricultural land or forest land.
     (3) The designation of receiving areas is limited to incorporated cities or towns. Prior to designating a receiving area, a city or town should have adequate infrastructure planned and funding identified for development in the receiving area at densities consistent with what can be achieved under the local transfer of development rights program. Nothing in this subsection limits a city's, town's, or county's authority to designate additional lands for a receiving area under a local intrajurisdictional transfer of development rights program that is not part of the regional program.
     (4) Cities and towns participating in the regional transfer of development rights program shall have discretion to determine which sending areas they receive development rights from to be used in their designated receiving areas.
     (5) Designation of sending and receiving areas should include a process for public outreach consistent with the public participation requirements in chapter 36.70A RCW.

NEW SECTION.  Sec. 5   (1) To facilitate participation, the department shall develop and adopt by rule terms and conditions of an interlocal agreement for transfers of development rights between counties, cities, and towns. Counties, cities, and towns participating in the regional program have the option of adopting the rule by reference to transfer development rights across jurisdictional boundaries as an alternative to entering into an interlocal agreement under chapter 39.34 RCW.
     (2) This section and the rules adopted under this section shall be deemed to provide an alternative method for the implementation of a regional transfer of development rights program, and shall not be construed as imposing any additional condition upon the exercise of any other powers vested in municipalities.
     (3) Nothing in this section prohibits a county, city, or town from entering into an interlocal agreement under chapter 39.34 RCW to transfer development rights under the regional program.

NEW SECTION.  Sec. 6   (1) Counties, cities, and towns that choose to participate in the regional transfer of development rights program must:
     (a) Enter into an interlocal agreement or adopt a resolution adopting by reference the provisions in the department rule authorized in section 5 of this act; and
     (b) Adopt transfer of development rights policies or implement development regulations that:
     (i) Comply with chapter 36.70A RCW;
     (ii) Designates sending or receiving areas consistent with sections 3 through 7 of this act; and
     (iii) Adopt a sending or receiving area ratio in cooperation with the sending or receiving jurisdiction.
     (2) Cities and towns that choose to participate in the regional transfer of development rights program are encouraged to provide permitting or environmental review incentives for developers to participate. Such incentives may include, but are not limited to, provision for by-right permitting, substantial environmental review of a subarea plan for the receiving area that includes the use of transferable development rights, adoption of a categorical exemption for infill under RCW 43.21C.229 for a receiving area, or adoption of a planned action under RCW 43.21C.240.

NEW SECTION.  Sec. 7   The department will develop quantitative and qualitative performance measures for monitoring the regional transfer of development rights program. The performance measures may address conservation of land and creation of livable communities, as well as other measures identified by the department. The department may require cities, towns, and counties to report on these performance measures biannually. The department shall compile any performance measure information that has been reported by the counties, cities, and towns and post it on a web site.

NEW SECTION.  Sec. 8   Sections 3 through 7 of this act are each added to chapter 43.362 RCW.