Modernizes the functionality of the state environmental policy act.

Requires the department of ecology to: (1) Increase the rule-based categorical exemptions to the state environmental policy act and update the environmental checklist;

(2) Update, but not decrease, the thresholds for all other project actions;

(3) Create a categorical exemption for projects designed to restore natural wildlife or fishery habitats or serve as environmental mitigation for other projects;

(4) Propose methods for integrating the state environmental policy act process with provisions of the growth management act; and

(5) Convene an advisory committee to assist in updating the environmental checklist and updating the thresholds for other project actions.

Allows counties, cities, and towns to recover reasonable expenses incurred in the preparation of a nonproject environmental impact statement.

Allows money in the growth management planning and environmental review fund to be used to make loans to local governments for certain purposes.