"NEW SECTION.  Sec. 1   (1) The legislature finds that a key priority of water resource management in the Columbia river basin is the development of new water supplies that includes storage and conservation in order to meet the economic and community development needs of people and the instream flow needs of fish.
     (2) The legislature therefore declares that a Columbia river basin water supply development program is needed, and directs the department of ecology to aggressively pursue the development of water supplies to benefit both instream and out-of-stream uses.

NEW SECTION.  Sec. 2   (1) The Columbia river basin water supply development account is created in the state treasury. The account may receive direct appropriations from the legislature, receipts of any funds pursuant to sections 3 and 4 of this act, or funds from any other sources.
     (2)(a) Expenditures from the Columbia river basin water supply development account may be used to assess, plan, and develop new storage, improve or alter operations of existing storage facilities, implement conservation projects, or any other actions designed to provide access to new water supplies within the Columbia river basin for both instream and out-of-stream uses. Except for the development of new storage projects, there shall be no expenditures from this account for water acquisition or transfers from one water resource inventory area to another without specific legislative authority.
     (b) Two-thirds of the funds placed in the account shall be used to support the development of new storage facilities; the remaining one-third shall be used for the other purposes listed in this section.
     (3)(a) Funds may not be expended from this account for the construction of a new storage facility until the department of ecology evaluates the following:
     (i) Water uses to be served by the facility;
     (ii) The quantity of water necessary to meet those uses;
     (iii) The benefits and costs to the state of meeting those uses, including short-term and long-term economic, cultural, and environmental effects; and
     (iv) Alternative means of supplying water to meet those uses, including the costs of those alternatives and an analysis of the extent to which long-term water supply needs can be met using these alternatives.
     (b) The department of ecology may rely on studies and information developed through compliance with other state and federal permit requirements and other sources. The department shall compile its findings and conclusions, and provide a summary of the information it reviewed.
     (c) Before finalizing its evaluation under the provisions of this section, the department of ecology shall make the preliminary evaluation available to the public. Public comment may be made to the department within thirty days of the date the preliminary evaluation is made public.
     (4) Net water savings achieved through conservation measures funded by the account shall be placed in trust in proportion to the state funding provided to implement a project.
     (5) Net water savings achieved through conservation measures funded by the account developed within the boundaries of the federal Columbia river reclamation project and directed to the Odessa subarea to reduce the use of ground water for existing irrigation is exempt from the provisions of subsection (4) of this section.
     (6) Moneys in the Columbia river basin water supply development account created in this section may be spent only after appropriation.
     (7) Interest earned by deposits in the account will be retained in the account.

NEW SECTION.  Sec. 3   (1)(a) Water supplies secured through the development of new storage facilities made possible with funding from the Columbia river basin water supply development account shall be allocated as follows:
     (i) Two-thirds of active storage shall be available for appropriation for out-of-stream uses; and
     (ii) One-third of active storage shall be available to augment instream flows and shall be managed by the department of ecology. The timing of releases of this water shall be determined by the department of ecology, in cooperation with the department of fish and wildlife and fisheries comanagers, to maximize benefits to salmon and steelhead populations.
     (b) Water available for appropriation under (a)(i) of this subsection but not yet appropriated shall be temporarily available to augment instream flows to the extent that it does not impair existing water rights.
     (2) Water developed under the provisions of this section to offset out-of-stream uses and for instream flows is deemed adequate mitigation for the issuance of new water rights provided for in subsection (1)(a) of this section and satisfies all consultation requirements under state law related to the issuance of new water rights.
     (3) The department of ecology shall focus its efforts to develop water supplies for the Columbia river basin on the following needs:
     (a) Alternatives to ground water for agricultural users in the Odessa subarea aquifer;
     (b) Sources of water supply for pending water right applications;
     (c) A new uninterruptible supply of water for the holders of interruptible water rights on the Columbia river mainstem that are subject to instream flows or other mitigation conditions to protect stream flows; and
     (d) New municipal, domestic, industrial, and irrigation water needs within the Columbia river basin.
     (4) The one-third/two-thirds allocation of water resources between instream and out-of-stream uses established in this section does not apply to applications for changes or transfers of existing water rights in the Columbia river basin.

NEW SECTION.  Sec. 4   (1) The department of ecology may enter into voluntary regional agreements for the purpose of providing new water for out-of-stream use, streamlining the application process, and protecting instream flow.
     (2) Such agreements shall ensure that:
     (a) For water rights issued from the Columbia river mainstem, there is no negative impact on Columbia river mainstem instream flows in the months of July and August as a result of the new appropriations issued under the agreement;
     (b) For water rights issued from the lower Snake river mainstem, there is no negative impact on Snake river mainstem instream flows from April through August as a result of the new appropriations issued under the agreement; and
     (c) Efforts are made to harmonize such agreements with watershed plans adopted under the authority of chapter 90.82 RCW that are applicable to the area covered by the agreement.
     (3) The protection of instream flow as set forth in subsection (2) of this section is adequate for purposes of mitigating instream flow impacts resulting from any appropriations for out-of-stream use made under a voluntary regional agreement, and the only applicable consultation provisions under state law regarding instream flow impacts shall be those set forth in subsection (4) of this section.
     (4) Before executing a voluntary agreement under this section, the department of ecology shall:
     (a) Provide a sixty-day period for consultation with county legislative authorities and watershed planning groups with jurisdiction over the area where the water rights included in the agreement are located, the department of fish and wildlife, and affected tribal governments, and federal agencies. The department of fish and wildlife shall provide written comments within that time period. The consultation process for voluntary regional agreements developed under the provisions of this section is deemed adequate for the issuance of new water rights provided for in this section and satisfies all consultation requirements under state law related to the issuance of new water rights; and
     (b) Provide a thirty-day public review and comment period for a draft agreement, and publish a summary of any public comments received. The thirty-day review period shall not begin until after the department of ecology has concluded its consultation under (a) of this subsection and the comments that have been received by the department are made available to the public.
     (5) The provisions of subsection (4) of this section satisfy all applicable consultation requirements under state law.
     (6) The provisions of this section and any voluntary regional agreements developed under such provisions may not be relied upon by the department of ecology as a precedent, standard, or model that must be followed in any other voluntary regional agreements.
     (7) Nothing in this section may be interpreted or administered in a manner that precludes the processing of water right applications under chapter 90.03 or 90.44 RCW that are not included in a voluntary regional agreement.
     (8) Nothing in this section may be interpreted or administered in a manner that impairs or diminishes a valid water right or a habitat conservation plan approved for purposes of compliance with the federal endangered species act.
     (9) The department of ecology shall monitor and evaluate the water allocated to instream and out-of-stream uses under this section, evaluate the program, and provide an interim report to the appropriate committees of the legislature by June 30, 2008. A final report shall be provided to the appropriate committees of the legislature by June 30, 2011.
     (10) If the department of ecology executes a voluntary agreement under this section that includes water rights appropriated from the lower Snake river mainstem, the department shall develop aggregate data in accordance with the provisions of section 6 of this act for the lower Snake river mainstem.
     (11) Any agreement entered into under this section shall remain in full force and effect through the term of the agreement regardless of the expiration of this section.
     (12) The definitions in this subsection apply to this section and section 6 of this act, and may only be used for purposes of implementing these sections.
     (a) "Columbia river mainstem" means all water in the Columbia river within the ordinary high water mark of the main channel of the Columbia river between the border of the United States and Canada and the Bonneville dam, and all ground water within one mile of the high water mark.
     (b) "Lower Snake river mainstem" means all water in the lower Snake river within the ordinary high water mark of the main channel of the lower Snake river from the head of Ice Harbor pool to the confluence of the Snake and Columbia rivers, and all ground water within one mile of the high water mark.
     (13) This section expires June 30, 2012.

NEW SECTION.  Sec. 5   (1) To support the development of new water supplies in the Columbia river and to protect instream flow, the department of ecology shall work with all interested parties, including interested county legislative authorities and watershed planning groups, adjacent to the Columbia river, and affected tribal governments, to develop a Columbia river water supply inventory and a long-term water supply and demand forecast. The inventory must include:
     (a) A list of conservation projects that have been implemented under this chapter and the amount of water conservation they have achieved; and
     (b) A list of potential water supply and storage projects in the Columbia river basin, including estimates of:
     (i) Cost per acre-foot;
     (ii) Benefit to fish and other instream needs;
     (iii) Benefit to out-of-stream needs; and
     (iv) Environmental and cultural impacts.
     (2) The department of ecology shall complete the first Columbia river water supply inventory by November 15, 2006, and shall update the inventory annually thereafter.
     (3) The department of ecology shall complete the first Columbia river long-term water supply and demand forecast by November 15, 2006, and shall update the report every five years thereafter.

NEW SECTION.  Sec. 6   (1) In order to better understand current water use and instream flows in the Columbia river mainstem, the department of ecology shall establish and maintain a Columbia river mainstem water resources information system that provides the information necessary for effective mainstem water resource planning and management.
     (2) To accomplish the objective in subsection (1) of this section, the department of ecology shall use information compiled by existing local watershed planning groups, federal agencies, the Bonneville power administration, irrigation districts, conservation districts in the basin, and other available sources. The information shall include:
     (a) The total aggregate quantity of water rights issued under state permits and certificates and filed under state claims on the Columbia river mainstem and for ground water within one mile of the mainstem; and
     (b) The total aggregate volume of current water use under these rights as metered and reported by water users under current law.
     (3) The department of ecology shall publish the aggregate data on the department's web site no later than June 30, 2009, and shall periodically update the data.
     (4) For purposes of this section, the definition of Columbia river mainstem in section 4(12) of this act shall apply and the use of the definition is solely limited to the purpose of collecting data to meet the information requirements of this section.

Sec. 7   2005 c 488 s 332 (uncodified) is amended to read as follows:
FOR THE DEPARTMENT OF ECOLOGY
     Columbia River Initiative (06-2-010)

     The appropriation in this section is subject to the following conditions and limitations:
     (1) $6,000,000 is provided solely for feasibility studies related to off-mainstem storage projects and impacts of changing operations at the Potholes reservoir, and grant funding for the purchase and installation of water measuring devices.
     (2) Of the amount appropriated in this section, $10,000,000 ((may not be expended prior to enactment of state legislation that establishes the policy requirements for a new water resources and water rights management program for the Columbia river mainstem. If such legislation is not enacted prior to June 30, 2006, this amount shall lapse)) is provided to begin implementation of the Columbia river basin water supply development program in sections 2 through 6 of this act. Within this amount, the department shall support, to the extent that projects are ready to proceed and to the extent that resources allow, the following water supply projects, including, but not limited to: Storage development or storage enhancement projects, projects that provide surface water supply for the Odessa subarea within the boundaries of the Columbia basin federal reclamation project, projects that enhance water supplies for the Walla Walla and Yakima rivers through exchanges and other methods, and investments resulting in water use efficiency. The department shall report progress under this section to the appropriate committees of the legislature by December 1, 2006.

Appropriation:
     State Building Construction Account--State . . . . . . . . . . . . $16,000,000

     Prior Biennia (Expenditures) . . . . . . . . . . . . $0
     Future Biennia (Projected Costs) . . . . . . . . . . . . $52,610,000
          TOTAL . . . . . . . . . . . . $68,610,000

Sec. 8   RCW 43.84.092 and 2005 c 514 s 1106, 2005 c 353 s 4, 2005 c 339 s 23, 2005 c 314 s 110, 2005 c 312 s 8, and 2005 c 94 s 2 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     (a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the Columbia river basin water supply development account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the education legacy trust account, the election account, the emergency reserve fund, The Evergreen State College capital projects account, the federal forest revolving account, the freight mobility investment account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, the high-occupancy toll lanes operations account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public works assistance account, the Puyallup tribal settlement account, the real estate appraiser commission account, the regional transportation investment district account, the resource management cost account, the rural Washington loan fund, the site closure account, the small city pavement and sidewalk account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation infrastructure account, the transportation partnership account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 9   Sections 1 through 6 of this act constitute a new chapter in Title 90 RCW.

NEW SECTION.  Sec. 10   This act takes effect July 1, 2006.

NEW SECTION.  Sec. 11   If specific authority to issue general obligation bonds of at least two hundred million dollars for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2006, in a bond authorization act, this act is null and void."