BILL REQ. #:  H-3731.1 

Prefiled 01/06/10. Read first time 01/11/10.   Referred to Committee on Agriculture & Natural Resources.

     AN ACT Relating to a water quality trading and banking program; adding a new section to chapter 90.48 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   (1) It is the intent of the legislature that the state should implement practical water quality trading and banking that values multiple ecosystem services, is based on achieving net improvements to ecosystem health, and is watershed-based.
     (2) It is the policy of the legislature that water quality trading and banking should strive to:
     (a) Achieve early pollutant load reductions;
     (b) Reduce the cost of total maximum daily loads implementation and overall federal clean water act compliance;
     (c) Act as an incentive for voluntary reductions in and above what would otherwise be required;
     (d) Offset future discharge of pollutants;
     (e) Achieve greater environmental benefit, including habitat improvements; and
     (f) Combine ecological services for multiple benefits, including habitat improvements.

NEW SECTION.  Sec. 2   A new section is added to chapter 90.48 RCW to read as follows:
     (1) By December 31, 2011, the department shall develop and implement a water quality trading and banking program as a means, at the option of a regulated entity, of achieving water quality objectives and standards in this state in lieu of other technology or water quality-based requirements. The department shall develop the program in a manner that complies with state and federal water quality rules and regulations and promotes economic efficiency.
     (2) In developing the water quality trading and banking program, the department shall place a priority on trades that improve the water quality within watersheds and on the following pollutants or conditions:
     (a) Nitrogenous and phosphorous compounds commonly referred to as nutrients;
     (b) Sediment;
     (c) Temperature;
     (d) Biological oxygen demand; and
     (e) Chemical oxygen demand.
     (3) The department shall:
     (a) Develop a procedure to assist persons entering into an agreement to offset, trade, or bank quantities of pollutants or portions of assimilative capacity of receiving waters under this section in a manner that results in any or all of the following: A net reduction of pollutants; a net increase in ecological function within watersheds; assistance in meeting water quality standards; or implementation of total maximum daily load allocations;
     (b) Provide oversight and administration of agreements entered into under this section;
     (c) Minimize administrative and technical requirements in order to encourage and facilitate trading and banking under this section;
     (d) Emphasize practical procedures for pollutant trading that may be implemented using reasonable estimations and engineering judgment commensurate with reasonable assurances for load allocations; and
     (e) Allow for the banking and future credit taking by counties where water quality improvements occur that exceed pollutant reductions otherwise required as a load or waste load allocation of a total maximum daily load. Credit taking includes a waiver of administrative or procedural requirements of national pollutant discharge elimination system municipal storm water permits, including but not limited to tracking, recordkeeping, and training.
     (4) To aid in meeting its obligations under this section, the department may select two or more pilot projects or case studies from volunteer participating counties to pilot the application of water quality trades and banking.
     (5) The department shall seek any approvals, waivers, or authorizations from the United States environmental protection agency necessary to implement the water quality trading and banking program.
     (6) The department may seek federal funding to support the water quality trading and banking program.
     (7) This section may not be construed to allow any activity expressly prohibited by federal law or regulation.

NEW SECTION.  Sec. 3   This act may be known and cited as the watershed improvement through water quality trading and banking act.