READ FIRST TIME 02/05/14.   

     AN ACT Relating to developing a water quality trading program in Washington; adding a new section to chapter 89.08 RCW; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that water quality trading is an innovative approach adopted in at least seventeen other states that can lead to a more efficient achievement of water quality goals. The premise of water quality trading is based on the fact that certain sources in a given watershed can have very different costs to control the same pollutant. Trading programs allow facilities facing higher pollution control costs to meet their regulatory obligations by purchasing environmentally equivalent or superior pollution reductions from another source at a lower cost. This trading achieves the same water quality improvement at lower overall cost.
     (2) The legislature further finds that the United States environmental protection agency has been supportive of water quality trading programs since 1993 when it issued an initial document called the National Water Quality Trading Policy. With this publication, the environmental protection agency sent a clear signal of federal support for this innovative, market-based approach to improving water quality.
     (3) The legislature further finds that water quality trading is, and should remain, a voluntary option that regulated point sources can use to meet the discharge limits in their national pollutant discharge elimination system permits.
     (4) The legislature recognizes that setting up a water quality trading program can be a complex task that needs to be transparent, must have real, accountable deductions in pollution inputs, must be defensible, and must be enforceable. A water quality trading program may not be suitable for many watersheds in the state. However, the legislature also finds that the state of Washington should explore the option as a tool for achieving water quality goals and investigate whether this tool is viable given the specific, local water quality concerns facing Washington's water bodies.
     (5) The legislature further recognizes that the department of ecology has produced a draft water quality trading framework that enables trading in Washington and that to date a major barrier to trading is a lack of interested credit purchasers.

NEW SECTION.  Sec. 2   A new section is added to chapter 89.08 RCW to read as follows:
     (1) The state conservation commission, in partnership with the department of ecology, shall build upon the report on conservation markets produced pursuant to chapter 133, Laws of 2008 and explore whether there are potential buyers and sellers in Washington watersheds for a water quality trading program. Specifically, the state conservation commission should examine watersheds in which total maximum daily loads have been produced, and assess whether there are potential buyers, or permit holders, and sellers of credit to support a water quality trading program consistent with the water quality trading framework developed by the department of ecology.
     (2) The state conservation commission must coordinate with Indian tribes, the department of agriculture and other state agencies, local governments, and other interested stakeholders in completing the assessment and report required by this section. Prior to finalizing the assessment and report, the state conservation commission must ensure that the department of ecology concurs with its determination of whether or not there is the potential for a viable water quality trading program.
     (3) The state conservation commission must report its findings to the legislature consistent with RCW 43.01.036 by October 31, 2017.      
     (4) This section expires June 30, 2018.