BILL REQ. #:  H-1956.2 

READ FIRST TIME 03/04/03.   

     AN ACT Relating to watershed planning; amending RCW 90.82.040, 90.82.130, 90.82.060, 90.82.090, 90.82.120, and 77.85.050; reenacting and amending RCW 77.85.130; adding new sections to chapter 90.82 RCW; adding new sections to chapter 90.54 RCW; adding a new section to chapter 90.48 RCW; and creating a new section.

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

Sec. 1   RCW 90.82.040 and 2001 c 237 s 2 are each amended to read as follows:
     (1) Once a WRIA planning unit has been initiated under RCW 90.82.060 and a lead agency has been designated, it shall notify the department and may apply to the department for funding assistance for conducting the planning and providing coordination and oversight of the implementation of the plan. Funds shall be provided from and to the extent of appropriations made by the legislature to the department expressly for this purpose.
     (2)(a) Each planning unit that has complied with subsection (1) of this section is eligible to receive watershed planning grants in the following amounts for the first three phases of watershed planning and phase four watershed plan implementation coordination and oversight:
     (i) Initiating governments may apply for an initial organizing grant of up to fifty thousand dollars for a single WRIA or up to seventy-five thousand dollars for a multi-WRIA management area in accordance with RCW 90.82.060(4);
     (ii)(A) A planning unit may apply for up to two hundred thousand dollars for each WRIA in the management area for conducting watershed assessments in accordance with RCW 90.82.070, except that a planning unit that chooses to conduct a detailed assessment or studies under (a)(ii)(B) of this subsection or whose initiating governments choose or have chosen to include an instream flow or water quality component in accordance with RCW 90.82.080 or 90.82.090 may apply for up to one hundred thousand additional dollars for each instream flow and up to one hundred thousand additional dollars for each water quality component included for each WRIA to conduct an assessment on that optional component and for each WRIA in which the assessments or studies under (a)(ii)(B) of this subsection are conducted.
     (B) A planning unit may elect to apply for up to one hundred thousand additional dollars to conduct a detailed assessment of multipurpose water storage opportunities or for studies of specific multipurpose storage projects which opportunities or projects are consistent with and support the other elements of the planning unit's watershed plan developed under this chapter; and
     (iii) A planning unit may apply for up to two hundred fifty thousand dollars for each WRIA in the management area for developing a watershed plan and making recommendations for actions by local, state, and federal agencies, tribes, private property owners, private organizations, and individual citizens, including a recommended list of strategies and projects that would further the purpose of the plan in accordance with RCW 90.82.060 through 90.82.100.
     (b) A planning unit may request a different amount for phase two or phase three of watershed planning than is specified in (a) of this subsection, provided that the total amount of funds awarded do not exceed the maximum amount the planning unit is eligible for under (a) of this subsection. The department shall approve such an alternative allocation of funds if the planning unit identifies how the proposed alternative will meet the goals of this chapter and provides a proposed timeline for the completion of planning. However, the up to one hundred thousand additional dollars in funding for instream flow and water quality components and for water storage assessments or studies that a planning unit may apply for under (a)(ii)(A) of this subsection may be used only for those instream flow, water quality, and water storage purposes.
     (c) By December 1, 2001, or within one year of initiating phase one of watershed planning, whichever occurs later, the initiating governments for each planning unit must inform the department whether they intend to have the planning unit establish or amend instream flows as part of its planning process. If they elect to have the planning unit establish or amend instream flows, the planning unit is eligible to receive one hundred thousand dollars for that purpose in accordance with (a)(ii) of this subsection. If the initiating governments for a planning unit elect not to establish or amend instream flows as part of the unit's planning process, the department shall retain one hundred thousand dollars to carry out an assessment to support establishment of instream flows and to establish such flows in accordance with RCW 90.54.020(3)(a) and chapter 90.22 RCW. The department shall not use these funds to amend an existing instream flow unless requested to do so by the initiating governments for a planning unit.
     (d) In administering funds appropriated for supplemental funding for optional plan components under (a)(ii) of this subsection, the department shall give priority in granting the available funds to proposals for setting or amending instream flows.
     (e) A planning unit may apply for a matching grant for phase four coordination and oversight of watershed plan implementation. A match of ten to twenty-five percent is required and may include financial contributions or in-kind goods and services directly related to coordination and oversight functions. The match can be provided by the planning unit or by the combined commitments from federal agencies, tribal governments, local governments, special districts, or other local organizations. The phase four grant may be up to one hundred thousand dollars for each planning unit for the first three years of implementation. At the end of the three-year period, a two-year extension may be available for up to fifty thousand dollars each year. For planning units that cover more than one WRIA, additional matching funds of up to twenty-five thousand dollars may be available for each additional WRIA per year for the first three years of implementation, and up to twelve thousand five hundred dollars per WRIA per year for each of the fourth and fifth years.
     (3)(a) The department shall use the eligibility criteria in this subsection (3) instead of rules, policies, or guidelines when evaluating grant applications at each stage of the grants program.
     (b) In reviewing grant applications under this subsection (3), the department shall evaluate whether:
     (i) The planning unit meets all of the requirements of this chapter;
     (ii) The application demonstrates a need for state planning funds to accomplish the objectives of the planning process; and
     (iii) The application and supporting information evidences a readiness to proceed.
     (c) In ranking grant applications submitted at each stage of the grants program, the department shall give preference to applications in the following order of priority:
     (i) Applications from existing planning groups that have been in existence for at least one year;
     (ii) Applications that address protection and enhancement of fish habitat in watersheds that have aquatic fish species listed or proposed to be listed as endangered or threatened under the federal endangered species act, 16 U.S.C. Sec. 1531 et seq. and for which there is evidence of an inability to supply adequate water for population and economic growth from:
     (A) First, multi-WRIA planning; and
     (B) Second, single WRIA planning;
     (iii) Applications that address protection and enhancement of fish habitat in watersheds or for which there is evidence of an inability to supply adequate water for population and economic growth from:
     (A) First, multi-WRIA planning; and
     (B) Second, single WRIA planning.
     (d) Except for phase four watershed plan implementation, the department may not impose any local matching fund requirement as a condition for grant eligibility or as a preference for receiving a grant.
     (4) The department may retain up to one percent of funds allocated under this section to defray administrative costs.
     (5) Planning under this chapter should be completed as expeditiously as possible, with the focus being on local stakeholders cooperating to meet local needs.
     (6) Funding provided under this section shall be considered a contractual obligation against the moneys appropriated for this purpose.

Sec. 2   RCW 90.82.130 and 2001 c 237 s 4 are each amended to read as follows:
     (1)(a) Upon completing its proposed watershed plan, the planning unit may approve the proposal by consensus of all of the members of the planning unit or by consensus among the members of the planning unit appointed to represent units of government and a majority vote of the nongovernmental members of the planning unit.
     (b) If the proposal is approved by the planning unit, the unit shall submit the proposal to the counties with territory within the management area. If the planning unit has received funding beyond the initial organizing grant under RCW 90.82.040, such a proposal approved by the planning unit shall be submitted to the counties within four years of the date that funds beyond the initial funding are first drawn upon by the planning unit.
     (c) If the watershed plan is not approved by the planning unit, the planning unit may submit the components of the plan for which agreement is achieved using the procedure under (a) of this subsection, or the planning unit may terminate the planning process.
     (2)(a) The legislative authority of each of the counties with territory in the management area shall provide public notice of and conduct at least one public hearing on the proposed watershed plan submitted under this section. After the public hearings, the legislative authorities of these counties shall convene in joint session to consider the proposal. The counties may approve or reject the proposed watershed plan for the management area, but may not amend it. Approval of such a proposal shall be made by a majority vote of the members of each of the counties with territory in the management area.
     (b) If a proposed watershed plan is not approved, it shall be returned to the planning unit with recommendations for revisions. Approval of such a revised proposal by the planning unit and the counties shall be made in the same manner provided for the original watershed plan. If approval of the revised plan is not achieved, the process shall terminate.
     (3) The planning unit shall not add an element to its watershed plan that creates an obligation unless each of the governments to be obligated has at least one representative on the planning unit and the respective members appointed to represent those governments agree to adding the element that creates the obligation. A member's agreeing to add an element shall be evidenced by a recorded vote of all members of the planning unit in which the members record support for adding the element. If the watershed plan is approved under subsections (1) and (2) of this section and the plan creates obligations: (a) For agencies of state government, the agencies shall adopt by policy, procedures, agreements, or rules the obligations of both state and county governments and procedures or rules implementing the state obligations, the obligations on state agencies are binding upon adoption of the obligations ((into rule)), and the agencies shall take other actions to fulfill their obligations as soon as possible, and should annually review implementation needs with respect to budget and staffing; ((or)) (b) for counties, the obligations are binding on the counties and the counties shall adopt any necessary implementing ordinances and take other actions to fulfill their obligations as soon as possible, and should annually review implementation needs with respect to budget and staffing; or (c) for an organization voluntarily accepting an obligation, the organization must adopt policies, procedures, agreements, rules, or ordinances to implement the plan, and should annually review implementation needs with respect to budget and staffing.
     (4) As used in this section, "obligation" means any action required as a result of this chapter that imposes upon a tribal government, county government, or state government, either: A fiscal impact; a redeployment of resources; or a change of existing policy.
     (5) The rules and policies of a state agency developed and adopted under this section for a plan must be developed and adopted under the negotiated rule-making provisions of RCW 34.05.310(2)(a). The state agency must notify the planning unit regarding such negotiated rule making. The entities to be included in the rule making as affected interests must include, but are not limited to, each member of the planning unit who notifies the agency in writing that he or she wishes to participate in the negotiated rule making and who subsequently participates in it.

NEW SECTION.  Sec. 3   A new section is added to chapter 90.82 RCW to read as follows:
     (1) Upon approval of the watershed plan, the role of the planning unit is to provide coordination and oversight during the implementation of the plan. This may include a number of interrelated activities, such as seeking funding; tracking progress towards implementation milestones; making adjustments to respond to new information and changing conditions; coordinating the many implementation actions being performed by different organizations in the watershed; and responding to local needs and concerns as expressed by elected officials, stakeholders, and the public. Supporting activities also include public outreach and education; long-term monitoring activities and associated research; data management; and program evaluation.
     (2) The planning unit must provide for periodic review of approved watershed plans and consider recommending amendments if needed. A proposed amendment to a plan must be approved by a planning unit and by the county legislative authority or authorities in the same manner prescribed for approving a plan under RCW 90.82.130. Once approved, the obligations voluntarily accepted by implementing agencies become binding as provided in RCW 90.82.130.
     (3) No plan approved under this chapter and no amendment to such a plan approved under this chapter may be amended by the department under RCW 90.54.040(1). This subsection shall not be construed as limiting the authority of the department to adopt instream flows by rule as provided in this chapter or under chapter 90.54 RCW.
     (4) Within one year of accepting funding for plan coordination and oversight, the planning unit must complete a detailed implementation plan. An implementation plan must clearly define coordination and oversight responsibilities; any needed interlocal agreements, rules, or ordinances; specific funding mechanisms; and timelines for carrying out the actions included in the plan. The implementation plan must include coordination of salmon recovery projects with lead entities working under chapter 246, Laws of 1998. Submittal of a detailed implementation plan to the department is a condition for receiving grants for the second and all subsequent years of the phase four grant.

Sec. 4   RCW 90.82.060 and 2001 c 229 s 1 are each amended to read as follows:
     (1) Planning conducted under this chapter must provide for a process to allow the local citizens within a WRIA or multi-WRIA area to join together in an effort to: (a) Assess the status of the water resources of their WRIA or multi-WRIA area; and (b) determine how best to manage the water resources of the WRIA or multi-WRIA area to balance the competing resource demands for that area within the parameters under RCW 90.82.120.
     (2) Watershed planning under this chapter may be initiated for a WRIA only with the concurrence of: (a) All counties within the WRIA; (b) the largest city or town within the WRIA unless the WRIA does not contain a city or town; and (c) the water supply utility obtaining the largest quantity of water from the WRIA or, for a WRIA with lands within the Columbia Basin project, the water supply utility obtaining from the Columbia Basin project the largest quantity of water for the WRIA. To apply for a grant for organizing the planning unit as provided for under RCW 90.82.040(2)(a), these entities shall designate the entity that will serve as the lead agency for the planning effort and indicate how the planning unit will be staffed.
     (3) Watershed planning under this chapter may be initiated for a multi-WRIA area only with the concurrence of: (a) All counties within the multi-WRIA area; (b) the largest city or town in each WRIA unless the WRIA does not contain a city or town; and (c) the water supply utility obtaining the largest quantity of water in each WRIA.
     (4) If entities in subsection (2) or (3) of this section decide jointly and unanimously to proceed, they shall invite all tribes with reservation lands within the management area.
     (5) The entities in subsection (2) or (3) of this section, including the tribes if they affirmatively accept the invitation, constitute the initiating governments for the purposes of this section.
     (6) The organizing grant shall be used to organize the planning unit and to determine the scope of the planning to be conducted. In determining the scope of the planning activities, consideration shall be given to all existing plans and related planning activities. The scope of planning must include water quantity elements as provided in RCW 90.82.070, and may include water quality elements as contained in RCW 90.82.090, habitat elements as contained in RCW 90.82.100, and instream flow elements as contained in RCW 90.82.080. The initiating governments shall work with state government, other local governments within the management area, and affected tribal governments, in developing a planning process. The initiating governments may hold public meetings as deemed necessary to develop a proposed scope of work and a proposed composition of the planning unit. In developing a proposed composition of the planning unit, the initiating governments shall provide for representation of a wide range of water resource interests.
     (7) Each state agency with regulatory or other interests in the WRIA or multi-WRIA area to be planned shall assist the local citizens in the planning effort to the greatest extent practicable, recognizing any fiscal limitations. In providing such technical assistance and to facilitate representation on the planning unit, state agencies may organize and agree upon their representation on the planning unit. Such technical assistance must only be at the request of and to the extent desired by the planning unit conducting such planning. The number of state agency representatives on the planning unit shall be determined by the initiating governments in consultation with the governor's office.
     (8) As used in this section, "lead agency" means the entity that coordinates staff support of its own or of other local governments and receives grants under RCW 90.82.130 for developing and for implementation coordination and oversight of a watershed plan.

NEW SECTION.  Sec. 5   A new section is added to chapter 90.82 RCW to read as follows:
     The state's water laws contain provisions, such as those in section 15, chapter . . ., Laws of 2003 (section 15 of SHB 1338), that grant greater flexibility in the use of water rights in watersheds or WRIA's for which certain comprehensive plans have been approved and that grant further flexibility as elements of the plans are implemented and the objectives of those elements are achieved. Sections 6 and 7 of this act identify the components of a watershed plan approved under this chapter that are needed to secure that flexibility for water use within a WRIA. Developing plans that satisfy the requirements of sections 6 and 7 of this act is not required for all planning conducted under this chapter. Developing, approving, and implementing such plans are simply means of receiving the authority to use this increased flexibility within a WRIA.

NEW SECTION.  Sec. 6   A new section is added to chapter 90.82 RCW to read as follows:
     Each plan developed under this chapter to satisfy the objectives of section 5 of this act must contain strategies for achieving the following water resource objectives:
     (1) Providing sufficient water for productive agriculture;
     (2) Providing sufficient water for commercial, industrial, and residential use; and
     (3) Providing sufficient water for instream flows.
     Such a plan must include timelines for achieving these three objectives and interim milestones for measuring progress in achieving the objectives. Such a plan must also identify the state and local administrative approvals and permits that must be secured to achieve these objectives.

NEW SECTION.  Sec. 7   A new section is added to chapter 90.82 RCW to read as follows:
     The strategies developed under this chapter to satisfy the objectives of section 6(3) of this act must include, but are not limited to, the identification of:
     (1) How stream flows that satisfy the instream flows established by rule in the WRIA are to be achieved;
     (2) Timelines for achieving these stream flows;
     (3) How progress is to be measured for achieving the flows and interim milestones for measuring that progress;
     (4) How any limiting factors regarding stream flows or water supply that have been identified for salmon in analyses conducted under RCW 77.85.060 are to be overcome;
     (5) How progress in overcoming these limiting factors is to be measured and interim milestones for measuring that progress; and
     (6) How the strategies developed under this section are to be coordinated with the activities and habitat project lists of lead entities and committees conducted and developed under RCW 77.85.050.

NEW SECTION.  Sec. 8   A new section is added to chapter 90.82 RCW to read as follows:
     The department and all other state agencies shall do their utmost to grant, within the discretion they have under other statutes, the approvals and permits needed to implement any plan approved under this chapter. State agencies and divisions within the department shall identify to the director of the department instances in which granting such approvals or permits is not within their authority and the changes in statute that would allow them to grant the approvals. By December 31, 2003, and by December 31st of each year thereafter, the director of the department shall report to the appropriate standing committees of the legislature and to the governor on the statutory changes that would be necessary to provide the state agency approvals and permits identified under this section.

NEW SECTION.  Sec. 9   A new section is added to chapter 90.54 RCW to read as follows:
     (1) The state's water laws contain provisions, such as those in section 15, chapter . . ., Laws of 2003 (section 15 of SHB 1338), that grant greater flexibility in the use of water rights in watersheds for which certain comprehensive plans have been adopted and that grant further flexibility as elements of the plans are implemented and the objectives of those elements are achieved. This section identifies the components of a watershed plan adopted under this chapter that are needed to secure that flexibility for water use within a watershed. Developing plans that satisfy the requirements of this section is not required for a watershed, however, developing, approving, and implementing such plans are means of receiving the authority to use this increased flexibility within a watershed.
     (2) When a comprehensive water resource program is developed in segments under RCW 90.54.040(1) to develop a watershed plan that satisfies the objectives of subsection (1) of this section, the watershed planning shall be conducted through local planning groups that represent at least the diversity of interests required for planning conducted under chapter 90.82 RCW. Any plan developed under this section shall include, but is not limited to, the water supply and use assessment and strategies for future use required for planning conducted under chapter 90.82 RCW by RCW 90.82.070 and the following:
     (a) Strategies for achieving the water resource objectives listed in section 6 of this act;
     (b) Timelines for achieving each of the objectives listed in section 6 of this act and interim milestones for measuring progress in achieving the objectives;
     (c) The state and local administrative approvals and permits that must be secured to achieve the objectives listed in section 6 of this act;
     (d) The elements of the strategies listed in section 7 of this act; and
     (e) An identification of the state and local administrative approvals and permits that must be secured to achieve the objectives listed in section 6 of this act.
     (3) The department and all other state agencies shall do their utmost to grant, within the discretion they have under other statutes, the approvals and permits needed to implement any plan approved under this section. State agencies and divisions within the department shall identify to the director of the department instances in which granting such approvals or permits is not within their authority and the changes in statute that would allow them to grant the approvals. The director shall include within the report required by section 8 of this act the director's recommendations for changes in statutes from those identified under this section.

NEW SECTION.  Sec. 10   A new section is added to chapter 90.54 RCW to read as follows:
     The authority granted by RCW 90.54.040(1) for the department to develop a comprehensive water resource program in segments shall not be used to amend, rescind, or augment any plan or amendment approved under chapter 90.82 RCW except with regard to establishing instream flows by rule.

NEW SECTION.  Sec. 11   A new section is added to chapter 90.48 RCW to read as follows:
     This section applies to any work conducted by the department for determining or allocating total maximum daily loads for approval by the United States environmental protection agency under the federal clean water act (33 U.S.C. Sec. 1251 et seq.). The department shall design its work schedule and plan for conducting such activities in a manner that facilitates the involvement of watershed planning units conducting planning under RCW 90.82.090. As a minimum, the department shall:
     (1) Schedule its work so that the involvement of planning units under subsection (3) of this section is possible under the work schedules established or likely to be established for the units to implement RCW 90.82.090;
     (2) Arrange its longer-term work schedule in a way that allows initiating governments to know that their choice to require a water quality component under RCW 90.82.090 or to initiate planning under RCW 90.82.060(7) would include the involvement of their planning unit under subsection (3) of this section; and
     (3) Designate the planning units conducting planning under RCW 90.82.090 as the local advisory bodies to be used, consistent with section 12 of this act, when the department conducts total maximum daily load activities in any portion of the area for which the unit is conducting such planning. This requirement does not apply to activities regarding an allocation of total maximum daily load for a body of water if the allocation is submitted by the department to the United States environmental protection agency for approval under the federal clean water act before or within six months of the effective date of this section.

NEW SECTION.  Sec. 12   A new section is added to chapter 90.82 RCW to read as follows:
     A planning unit conducting planning under RCW 90.82.090 may choose to assign the responsibility of being the local advisory body for total maximum daily load activities under section 11 of this act to: The members of the planning unit, as a whole, except those representing state agencies; some portion of the membership of the planning unit, other than the members representing state agencies; or any combination it may choose of its membership, other than state agency representatives, and any additional individuals it may choose who agree to participate.

Sec. 13   RCW 90.82.090 and 1998 c 247 s 5 are each amended to read as follows:
     If the initiating governments choose to include a water quality component, the watershed plan shall include the following elements:
     (1) An examination based on existing studies conducted by federal, state, and local agencies of the degree to which legally established water quality standards are being met in the management area;
     (2) An examination based on existing studies conducted by federal, state, and local agencies of the causes of water quality violations in the management area, including an examination of information regarding pollutants, point and nonpoint sources of pollution, and pollution-carrying capacities of water bodies in the management area. The analysis shall take into account seasonal stream flow or level variations, natural events, and pollution from natural sources that occurs independent of human activities;
     (3) An examination of the legally established characteristic uses of each of the nonmarine bodies of water in the management area;
     (4) An examination of any total maximum daily load established for nonmarine bodies of water in the management area((, unless a total maximum daily load process has begun in the management area as of the date the watershed planning process is initiated under RCW 90.82.060));
     (5) An examination of existing data related to the impact of fresh water on marine water quality;
     (6) A recommended approach for implementing the total maximum daily load established for achieving compliance with water quality standards for the nonmarine bodies of water in the management area((, unless a total maximum daily load process has begun in the management area as of the date the watershed planning process is initiated under RCW 90.82.060)); and
     (7) Recommended means of monitoring by appropriate government agencies whether actions taken to implement the approach to bring about improvements in water quality are sufficient to achieve compliance with water quality standards.
     This chapter does not obligate the state to undertake analysis or to develop strategies required under the federal clean water act (33 U.S.C. Sec. 1251 et seq.). This chapter does not authorize any planning unit, lead agency, or local government to adopt water quality standards or total maximum daily loads under the federal clean water act.

Sec. 14   RCW 90.82.120 and 1998 c 247 s 8 are each amended to read as follows:
     (1) Watershed planning developed and approved under this chapter shall not contain provisions that: (a) Are in conflict with existing state statutes, federal laws, or tribal treaty rights; (b) impair or diminish in any manner an existing water right evidenced by a claim filed in the water rights claims registry established under chapter 90.14 RCW or a water right certificate or permit; (c) require a modification in the basic operations of a federal reclamation project with a water right the priority date of which is before June 11, 1998, or alter in any manner whatsoever the quantity of water available under the water right for the reclamation project, whether the project has or has not been completed before June 11, 1998; (d) affect or interfere with an ongoing general adjudication of water rights; (e) modify or require the modification of any waste discharge permit issued under chapter 90.48 RCW; (f) except as provided in RCW 77.85.050(1)(c), modify or require the modification of activities or actions taken or intended to be taken under a habitat restoration work schedule developed under chapter 246, Laws of 1998; or (g) modify or require the modification of activities or actions taken to protect or enhance fish habitat if the activities or actions are: (i) Part of an approved habitat conservation plan and an incidental take permit, an incidental take statement, a management or recovery plan, or other cooperative or conservation agreement entered into with a federal or state fish and wildlife protection agency under its statutory authority for fish and wildlife protection that addresses the affected habitat; or (ii) part of a water quality program adopted by an irrigation district under chapter 87.03 RCW or a board of joint control under chapter 87.80 RCW. This subsection (1)(g) applies as long as the activities or actions continue to be taken in accordance with the plan, agreement, permit, or statement. Any assessment conducted under RCW 90.82.070, 90.82.090, or 90.82.100 shall take into consideration such activities and actions and those taken under the forest practices rules, including watershed analysis adopted under the forest practices act, chapter 76.09 RCW.
     (2) Watershed planning developed and approved under this chapter shall not change existing local ordinances or existing state rules or permits, but may contain recommendations for changing such ordinances or rules.
     (3) Notwithstanding any other provision of this chapter, watershed planning shall take into account forest practices rules under the forest practices act, chapter 76.09 RCW, and shall not create any obligations or restrictions on forest practices additional to or inconsistent with the forest practices act and its implementing rules, whether watershed planning is approved by the counties or the department.

Sec. 15   RCW 77.85.050 and 1999 sp.s. c 13 s 11 are each amended to read as follows:
     (1)(a) Counties, cities, and tribal governments must jointly designate, by resolution or by letters of support, the area for which a habitat project list is to be developed and the lead entity that is to be responsible for submitting the habitat project list. No project included on a habitat project list shall be considered mandatory in nature and no private landowner may be forced or coerced into participation in any respect. The lead entity may be a county, city, conservation district, special district, tribal government, or other entity.
     (b) The lead entity shall establish a committee that consists of representative interests of counties, cities, conservation districts, tribes, environmental groups, business interests, landowners, citizens, volunteer groups, regional fish enhancement groups, and other habitat interests. The purpose of the committee is to provide a citizen-based evaluation of the projects proposed to promote salmon habitat. The technical review team may provide the lead entity with organizational models that may be used in establishing the committees.
     (c) The committee shall compile a list of habitat projects, establish priorities for individual projects, define the sequence for project implementation, and submit these activities as the habitat project list. In any WRIA for which watershed planning is being conducted by a planning unit under RCW 90.82.100, the committee and the lead entity shall share their information regarding the WRIA with the planning unit, and the committee and the lead entity shall consult with the planning unit in preparing and in adding activities to the habitat project list for that WRIA. The committee shall also identify potential federal, state, local, and private funding sources.
     (2) The area covered by the habitat project list must be based, at a minimum, on a WRIA, combination of WRIAs, or any other area as agreed to by the counties, cities, and tribes in resolutions or in letters of support meeting the requirements of this subsection. Preference will be given to projects in an area that contain a salmon species that is listed or proposed for listing under the federal endangered species act.
     (3) The lead entity shall submit the habitat project list to the technical review team in accordance with procedures adopted by the board.

Sec. 16   RCW 77.85.130 and 2000 c 107 s 102 and 2000 c 15 s 1 are each reenacted and amended to read as follows:
     (1) The salmon recovery funding board shall develop procedures and criteria for allocation of funds for salmon habitat projects and salmon recovery activities on a statewide basis to address the highest priorities for salmon habitat protection and restoration. To the extent practicable the board shall adopt an annual allocation of funding. The allocation should address both protection and restoration of habitat, and should recognize the varying needs in each area of the state on an equitable basis. The board has the discretion to partially fund, or to fund in phases, salmon habitat projects. The board may annually establish a maximum amount of funding available for any individual project, subject to available funding. No projects required solely as a mitigation or a condition of permitting are eligible for funding.
     (2)(a) In evaluating, ranking, and awarding funds for projects and activities the board shall give preference to projects that:
     (i) Are based upon the limiting factors analysis identified under RCW 77.85.060;
     (ii) Provide a greater benefit to salmon recovery based upon the stock status information contained in the department of fish and wildlife salmonid stock inventory (SASSI), the salmon and steelhead habitat inventory and assessment project (SSHIAP), and any comparable science-based assessment when available;
     (iii) Will benefit listed species and other fish species; and
     (iv) Will preserve high quality salmonid habitat.
     (b) In evaluating, ranking, and awarding funds for projects and activities the board shall also give consideration to projects that:
     (i) Are the most cost-effective;
     (ii) Have the greatest matched or in-kind funding; and
     (iii) Will be implemented by a sponsor with a successful record of project implementation.
     (3) The board may reject, but not add, projects from a habitat project list submitted by a lead entity for funding. After January 1, 2004, the board shall not provide funding for any project in a WRIA for which planning is being conducted under RCW 90.82.100 unless the lead entity as well as the planning unit for the WRIA under chapter 90.82 RCW both certify that the consultation required by RCW 77.85.050(1)(c) has been conducted for the project.
     (4) For fiscal year 2000, the board may authorize the interagency review team to evaluate, rank, and make funding decisions for categories of projects or activities or from funding sources provided for categories of projects or activities. In delegating such authority the board shall consider the review team's staff resources, procedures, and technical capacity to meet the purposes and objectives of this chapter. The board shall maintain general oversight of the team's exercise of such authority.
     (5) The board shall seek the guidance of the technical review team to ensure that scientific principles and information are incorporated into the allocation standards and into proposed projects and activities. If the technical review team determines that a habitat project list complies with the critical pathways methodology under RCW 77.85.060, it shall provide substantial weight to the list's project priorities when making determinations among applications for funding of projects within the area covered by the list.
     (6) The board shall establish criteria for determining when block grants may be made to a lead entity or other recognized regional recovery entity consistent with one or more habitat project lists developed for that region. Where a lead entity has been established pursuant to RCW 77.85.050, the board may provide grants to the lead entity to assist in carrying out lead entity functions under this chapter, subject to available funding. The board shall determine an equitable minimum amount of funds for each region, and shall distribute the remainder of funds on a competitive basis.
     (7) The board may waive or modify portions of the allocation procedures and standards adopted under this section in the award of grants or loans to conform to legislative appropriations directing an alternative award procedure or when the funds to be awarded are from federal or other sources requiring other allocation procedures or standards as a condition of the board's receipt of the funds. The board shall develop an integrated process to manage the allocation of funding from federal and state sources to minimize delays in the award of funding while recognizing the differences in state and legislative appropriation timing.
     (8) The board may award a grant or loan for a salmon recovery project on private or public land when the landowner has a legal obligation under local, state, or federal law to perform the project, when expedited action provides a clear benefit to salmon recovery, and there will be harm to salmon recovery if the project is delayed. For purposes of this subsection, a legal obligation does not include a project required solely as a mitigation or a condition of permitting.
     (9) The board may condition a grant or loan to include the requirement that property may only be transferred to a federal agency if the agency that will acquire the property agrees to comply with all terms of the grant or loan to which the project sponsor was obligated. Property acquired or improved by a project sponsor may be conveyed to a federal agency, but only if the agency agrees to comply with all terms of the grant or loan to which the project sponsor was obligated.

NEW SECTION.  Sec. 17   Headings used in this act are not any part of the law.