BILL REQ. #:  H-1134.2 

Read first time 02/01/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to creating clean water jobs through storm water pollution funding; and adding a new chapter to Title 90 RCW.

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

NEW SECTION.  Sec. 1   This act may be known and cited as the "clean water jobs act of 2011."

NEW SECTION.  Sec. 2   (1) The legislature finds that contaminated storm water runoff is a major water pollution problem in the state creating a significant burden on the rivers, aquifers, lakes, and streams across Washington. Mitigating the burdens of storm water and storm water pollution is one of the Puget Sound partnership's top strategic priorities for Puget Sound recovery.
     (2) The legislature finds that activities that address storm water contamination, including building and retrofitting urban, suburban, and rural infrastructure, generate significant job growth, especially in the construction industry and other related trades.
     (3) The legislature recognizes that the burden of storm water pollution is a function of both increased volumes of storm water runoff due to the expansion of impervious surfaces and the toxic substances that pollute the runoff. Local governments address the burdens created by increased impervious surface through storm water utility fees, but it has been difficult to regulate the toxic substances that contaminate storm water runoff and result in nonpoint source pollution.
     (4) The legislature finds that toxic storm water pollutants, including petroleum products, fertilizers, herbicides and pesticides, are responsible for a significant portion of the contaminated runoff going into Puget Sound and other waters of the state.
     (5) The legislature recognizes that a recent Puget Sound partnership analysis shows that future expenditures for required storm water remediation in the Puget Sound region alone will require billions of dollars in new investments. To meet federal storm water permit requirements and complete other storm water project activities necessary to improve water quality recovery goals, more than two hundred fifty million dollars will need to be spent by cities, counties, ports, and the state department of transportation every year.
     (6) The legislature finds that the burden of environmental degradation from toxic storm water pollutants is difficult to offset because the source of pollution is not a single physical point, but occurs wherever the products containing these substances are purchased, consumed, or used. Nonpoint sources pollute storm water through a multitude of pathways. For example, combustion of gasoline, diesel, residual fuel oil, and other petroleum products emit pollutants such as hydrocarbons, polycyclic aromatic hydrocarbons, zinc, and arsenic, which then disperse and deposit on the ground. Oil and grease drip from vehicles and equipment onto roads and parking lots. Even when properly applied, pesticides, herbicides, and fertilizers leave residues that are environmental contaminants. When rainwater flows across impervious surfaces, these contaminants are mobilized and transported to water bodies.
     (7) The legislature finds that surface runoff of fertilizers, pesticides, and herbicides into water bodies changes natural ecosystems by killing or damaging a wide variety of organisms. These substances collect and accumulate in the food chain, becoming more harmful than their ambient concentration would suggest. Fertilizer can also disrupt natural biological communities by increasing plant and microbial growth, damaging natural water ecosystems, and creating new pollution conditions.
     (8) The legislature further finds that the possession of petroleum and petroleum by-products such as asphalt and road oil, lubricants, motor vehicle fuel, and motor diesel fuel, as well as pesticides, herbicides, fertilizers, and other toxic storm water pollutants, directly contributes to storm water contamination. Once these products are present in the state, the immediate, foreseeable, and unavoidable consequences of their distribution and use are emissions and residues that significantly contribute to storm water pollution.
     (9) The legislature finds that the federal government and the state of Washington have identified control of pollutants in storm water runoff through national pollutant discharge elimination system phases I and II municipal storm water permits as a requirement for the state and local jurisdictions. Impacts from the polluted storm water may be prevented or controlled through retrofit projects for existing infrastructure.
     (10) The legislature finds that current resources being devoted to offset the direct burdens of waterways contaminated by toxic storm water pollutants are insufficient to meet existing needs. Existing funding is raised largely by local governments and is disproportionately borne by fees levied on individual developers and property owners.
     (11) Therefore, the legislature determines that imposing a fee on the first possession of toxic storm water pollutants that contribute to nonpoint storm water contamination is an appropriate means of regulation that proportionally allocates the costs of offsetting the burdens that these products place upon the quality of the state's waters.

NEW SECTION.  Sec. 3   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise:
     (1) "Department" means the department of ecology.
     (2) "Low-impact development" means a storm water management and land use strategy applied at the parcel, subdivision, or drainage area level, that emphasizes conservation and use of on-site natural features integrated with engineered, small scale hydrologic controls to more closely mimic predevelopment hydrologic functions.
     (3) "Pesticide" means any product required to be registered under the federal insecticide, fungicide, and rodenticide act, 7 U.S.C. Sec. 136 et seq., as it exists on the effective date of this section.
     (4) "Fertilizer" means all commercial fertilizers required to be registered prior to distribution in the state under the provisions of chapter 15.54 RCW.
     (5) "Herbicide" means any product intended to prevent, destroy, repel, or mitigate any weed, and which is required to be registered under the federal insecticide, fungicide, and rodenticide act, 7 U.S.C. Sec. 136 et seq., as it exists on the effective date of this section.
     (6) "Petroleum product" means any plant condensate, lubricating oil, crankcase motor oil, gasoline, aviation fuel, kerosene, diesel motor fuel, benzol, fuel oil, residual fuel, asphalt base, liquefied or liquefiable gases, such as butane, ethane, and propane, and every other product derived from the refining of crude oil, but the term does not include crude oil.
     (7) "Possession" means the act of taking control of a substance subject to the fee imposed in section 5 of this act within this state, whether the person taking control does so by bringing, receiving, creating, or extracting the petroleum product in this state, and includes both actual and constructive possession. "Actual possession" occurs when the person with control obtains physical possession. "Constructive possession" occurs when the person with control does not obtain physical possession.
     (8) "Retrofit" means renovation or improvements associated with and constructed adjacent to or near an existing site, subdivision, or development in order to reduce or eliminate municipal storm water runoff to receiving water bodies.
     (9) "Storm water facilities" includes, but is not limited to, ponds, biofiltration swales, storm water treatment tanks, detention vaults, oil water separators, dry wells, catch basins, and filters.
     (10) "Toxic storm water pollutant" means petroleum products, pesticides, herbicides, and fertilizers. It also includes other substances that are determined by rule by the department to be significant contributors to the contamination of surface water runoff.

NEW SECTION.  Sec. 4   (1) The storm water pollution account is created in the state treasury. All receipts from the storm water pollution fee must be deposited into the account. Moneys in the account may be spent only after appropriation to the department for activities or projects that mitigate or prevent contamination of storm water by toxic storm water pollutants.
     (2)(a) Of the moneys appropriated to the department in the omnibus and capital appropriations acts for storm water grant programs the department may spend no more than four percent for its administrative costs. The department must distribute the remaining moneys annually as provided in (b) of this subsection.
     (b)(i) Seventy-five thousand dollars must be provided to each local government that is subject to the national pollutant discharge elimination system phase I or phase II municipal storm water requirements for the purpose of addressing contamination of storm water by toxic storm water pollutants.
     (ii) Eleven million dollars must be provided to the Washington state department of transportation and may be used only to fund transportation infrastructure projects that address toxic storm water pollution related to transportation infrastructure through the implementation of the department of transportation's national pollutant discharge elimination system programs permitted under the national pollution discharge elimination system. These moneys may not be used for construction of storm water facilities associated with new road construction or new road alignment construction, but may be used for construction that adds to or replaces an existing roadway.
     (iii) Three million dollars must be provided as grants to a nonprofit organization or organizations that develop storm water prevention and treatment technologies, and assist businesses and governmental entities in testing, monitoring, adopting, and implementing new practices and technologies that will cost-effectively reduce the impact of toxic storm water pollution.
     (iv)(A) Forty-five percent of the moneys remaining after allocation under (b)(i), (ii), and (iii) of this subsection (2) must be distributed annually by the department through grants to local governments covered by national pollutant discharge elimination system municipal phase I or phase II permits. The grants must be used to fund local government projects or activities that mitigate or prevent contamination from toxic storm water pollutants or the recontamination by toxic storm water pollutants of receiving waters previously remediated under federal or state-approved activities. To be eligible, local governments must provide fifty percent of project or activity costs in matching funds from other nonstate fund sources.
     (B) To qualify for funding under this subsection (2)(b)(iv), the applicant must demonstrate:
     (I) That the project or activity will address contamination of surface waters by toxic storm water pollutants covered under this chapter;
     (II) The water quality outcomes planned for the project or activity; and
     (III) For capital improvement project proposals greater than one million dollars, that at least fifteen percent of the labor hours will be performed by apprentices.
     (v)(A) Forty-five percent of the moneys remaining after allocation under (b)(i), (ii), and (iii) of this subsection (2) must be allocated annually by the department through grants to local governments for retrofit projects that address contamination of storm water by toxic storm water pollutants, or projects that directly reduce emissions that result in air deposition of toxins from storm water pollutants. The grants for retrofit projects must be prioritized for projects that utilize low-impact development retrofit strategies; except that grants may be awarded for other retrofit projects if the site does not lend itself to low-impact development techniques or if other retrofit techniques are shown to be more effective in terms of addressing water quality problems associated with the site or the receiving water body.
     (B) To qualify for funding, the applicant must demonstrate:
     (I) That the project or activity will address contamination of waterways by toxic storm water pollutants covered under this chapter;
     (II) The water quality outcomes planned for the project or activity; and
     (III) For capital improvement project proposals greater than one million dollars, that at least fifteen percent of the labor hours will be performed by apprentices.
     (vi) Ten percent of the moneys remaining after distributions have been made under (b)(i), (ii), and (iii) of this subsection (2) must be distributed to projects eligible under (b)(iv) or (v) of this subsection (2). These moneys should be allocated to the highest priority projects based upon ecological and water quality benefits as determined by the department, and may be allocated to meet the matching requirements under (b)(iv) of this subsection (2) to local governments that demonstrate economic hardship in meeting the matching requirement.
     (3) In consultation with stakeholders, the department must develop criteria for administering the program and ranking projects for funding based on water quality benefits. In developing criteria applicable to projects in the Puget Sound basin, the department must consult with the Puget Sound partnership to ensure the grants awarded will be consistent with the prioritization of the 2020 action agenda. All activities or projects approved for funding must demonstrate the potential to achieve clear ecological or water quality benefits. The department must endeavor to distribute the moneys within each geographic region of the state in proportion to the severity of impacts to waterways from contamination by toxic storm water pollutants.

NEW SECTION.  Sec. 5   (1) Beginning July 1, 2011, a storm water pollution fee is charged on the first possession of the following substances: Petroleum products, pesticides, herbicides, and fertilizers for the purpose of offsetting the burden of funding projects and activities that redress state water pollution caused by the presence of such substances in storm water runoff. The fee is equal to one percent of the wholesale value of the toxic storm water pollutant.
     (2) The fee must be collected by the department. Fees must be collected quarterly and must be deposited in the storm water pollution account created in section 4 of this act.
     (3) The department may adopt rules to identify additional toxic storm water pollutants to be subject to the fee in subsection (1) of this section that are determined to be significant contributors to the contamination of storm water runoff in the state. The department may amend the rules, as deemed necessary, to delete or add toxic storm water pollutants, but may not add substances by a rule amendment more than once in a twenty-four month period.
     (4) The department may enter into agreements with other state agencies to facilitate the most efficient collection of the fee.

NEW SECTION.  Sec. 6   (1) The storm water pollution fee charged in this chapter does not apply to the following:
     (a) Any possession of fuel carried into this state in the fuel tank for the motive power of any airplane, ship, truck, or other vehicle;
     (b) Any successive possession of a toxic storm water pollutant for which the fee was previously paid and which has not been remanufactured or reprocessed in any matter, other than repackaging or recycling for beneficial reuse, since the fee was paid; and
     (c) Any possession of a toxic storm water pollutant by a person under circumstances where the product is used, or is to be used, for a personal or domestic purpose by that person or a relative of, or person residing in the same dwelling as, that person. This exemption does not apply to any possession by a person of a toxic storm water pollutant if the product is used or is to be used for a business purpose.
     (2) Any person claiming an exemption under subsection (1)(b) of this section must maintain records to document that the storm water pollution fee was paid.

NEW SECTION.  Sec. 7   A credit against the storm water pollution fee charged in this chapter is allowed for:
     (1) Fees paid under this chapter on the possession of any toxic storm water pollutant that is subsequently exported for sale outside this state;
     (2) Fees paid under this chapter on the possession of fuel carried from this state in the fuel tank of any airplane, ship, truck, or other vehicle.

NEW SECTION.  Sec. 8   By December 1, 2013, and every two years thereafter, the department and the Puget Sound partnership must report to the governor and the appropriate committees of the legislature on the progress of the program, the water quality and other environmental quality outcomes of the storm water projects funded under this chapter, and the suitability of the levels of allocations from the storm water pollution account specified in section 4 of this act.

NEW SECTION.  Sec. 9   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. 10   Sections 1 through 8 of this act constitute a new chapter in Title 90 RCW.