Requires each master program provided in the shoreline management act to provide that: (1) An applicant for a proposed development may not be required to mitigate for environmental impacts that are not a direct result of the proposed development;

(2) Environmental mitigation applied to a proposed development must be limited to mitigation measures that are proportional in scope to the environmental impacts that are a direct result of the proposed development; and

(3) The local government administering and enforcing the permit system is responsible for demonstrating that mitigation measures applied to a proposed development satisfies certain master program provisions and must establish a process by which it may consult with federal agencies that require environmental mitigation for a proposed development.