"Sec. 1   RCW 90.84.030 and 1998 c 248 s 4 are each amended to read as follows:
     (1) Subject to the requirements of this chapter, the department, through a collaborative process, shall adopt rules for:
     (((1))) (a) Certification, operation, and monitoring of wetlands mitigation banks. The rules shall include procedures to assure that:
     (((a))) (i) Priority is given to banks providing for the restoration of degraded or former wetlands;
     (((b))) (ii) Banks involving the creation and enhancement of wetlands are certified only where there are adequate assurances of success and that the bank will result in an overall environmental benefit; and
     (((c))) (iii) Banks involving the preservation of wetlands or associated uplands are certified only when the preservation is in conjunction with the restoration, enhancement, or creation of a wetland, or in other exceptional circumstances as determined by the department consistent with this chapter;
     (((2))) (b) Determination and release of credits from banks. Procedures regarding credits shall authorize the use and sale of credits to offset adverse impacts and the phased release of credits as different levels of the performance standards are met;
     (((3))) (c) Public involvement in the certification of banks, using existing statutory authority;
     (((4))) (d) Coordination of governmental agencies, including early notification of the local government where the bank is located;
     (((5))) (e) Establishment of criteria for determining service areas for each bank in accordance with subsection (2) of this section;
     (((6))) (f) Performance standards; and
     (((7))) (g) Long-term management, financial assurances, and remediation for certified banks.
     (2) The criteria for determining service areas under subsection (1)(e) of this section shall include a requirement that restricts the maximum extent of the service area of a wetlands mitigation bank to the water resource inventory area (WRIA) as established under chapter 173-500 WAC in which the bank is located except where a service area may include parts of other WRIAs if it is ecologically defensible and appropriate.
     (3) Before adopting rules under this chapter, the department shall submit the proposed rules to the appropriate standing committees of the legislature. By January 30, 1999, the department shall submit a report to the appropriate standing committees of the legislature on its progress in developing rules under this chapter.

Sec. 2   RCW 90.84.040 and 1998 c 248 s 5 are each amended to read as follows:
     (1) The department may certify only those banks that meet the requirements of this chapter. The department may not certify a bank without local approval of the bank. Certification shall be accomplished through a banking instrument.
     (2) The local jurisdiction in which the bank is located has final approval over the certification of the mitigation bank. If the local government approves the bank, it shall be signatory to the banking instrument.
     (((2))) (3) State agencies and local governments may approve use of credits from a bank for any mitigation required under a permit issued or approved by that state agency or local government to compensate for the proposed impacts of a specific public or private project."