"Sec. 1   RCW 36.70A.070 and 2005 c 360 s 2 are each amended to read as follows:
     The comprehensive plan of a county or city that is required or chooses to plan under RCW 36.70A.040 shall consist of a map or maps, and descriptive text covering objectives, principles, and standards used to develop the comprehensive plan. The plan shall be an internally consistent document and all elements shall be consistent with the future land use map. A comprehensive plan shall be adopted and amended with public participation as provided in RCW 36.70A.140.
     Each comprehensive plan shall include a plan, scheme, or design for each of the following:
     (1) A land use element designating the proposed general distribution and general location and extent of the uses of land, where appropriate, for agriculture, timber production, housing, commerce, industry, recreation, open spaces, general aviation airports, public utilities, public facilities, and other land uses. The land use element shall include population densities, building intensities, and estimates of future population growth. The land use element shall designate, as appropriate, a sufficient quantity of land needed for residential, commercial, and industrial uses. The land use element shall provide for protection of the quality and quantity of ground water used for public water supplies. Wherever possible, the land use element should consider utilizing urban planning approaches that promote physical activity. Where applicable, the land use element shall review drainage, flooding, and storm water run-off in the area and nearby jurisdictions and provide guidance for corrective actions to mitigate or cleanse those discharges that pollute waters of the state, including Puget Sound or waters entering Puget Sound.
     (2) A housing element ensuring the vitality and character of established residential neighborhoods that: (a) Includes an inventory and analysis of existing and projected housing needs that identifies the number of housing units necessary to ((manage)) accommodate projected growth; (b) includes a statement of goals, policies, objectives, and mandatory provisions for the preservation, improvement, and development of housing, including single-family residences; (c) identifies a sufficient quantity of land suitable for meeting the existing and projected housing needs identified in (a) of this subsection, including, but not limited to, government-assisted housing, housing for low-income families, manufactured housing, multifamily housing, and group homes and foster care facilities; and (d) makes adequate provisions for existing and projected needs of all economic segments of the community.
     (3) A capital facilities plan element consisting of: (a) An inventory of existing capital facilities owned by public entities, showing the locations and capacities of the capital facilities; (b) a forecast of the future needs for such capital facilities; (c) the proposed locations and capacities of expanded or new capital facilities; (d) at least a six-year plan that will finance such capital facilities within projected funding capacities and clearly identifies sources of public money for such purposes; and (e) a requirement to reassess the land use element if probable funding falls short of meeting existing needs and to ensure that the land use element, capital facilities plan element, and financing plan within the capital facilities plan element are coordinated and consistent. Park and recreation facilities shall be included in the capital facilities plan element.
     (4) A utilities element consisting of the general location, proposed location, and capacity of all existing and proposed utilities, including, but not limited to, electrical lines, telecommunication lines, and natural gas lines.
     (5) Rural element. Counties shall include a rural element including lands that are not designated for urban growth, agriculture, forest, or mineral resources. The following provisions shall apply to the rural element:
     (a) Growth management act goals and local circumstances. Because circumstances vary from county to county, in establishing patterns of rural densities and uses, a county may consider local circumstances, but shall develop a written record explaining how the rural element harmonizes the planning goals in RCW 36.70A.020 and meets the requirements of this chapter.
     (b) Rural development. The rural element shall permit rural development, forestry, and agriculture in rural areas. The rural element shall provide for a variety of rural densities, uses, essential public facilities, and rural governmental services needed to serve the permitted densities and uses. To achieve a variety of rural densities and uses, counties may provide for clustering, density transfer, design guidelines, conservation easements, and other innovative techniques that will accommodate appropriate rural densities and uses that are not characterized by urban growth and that are consistent with rural character.
     (c) Measures governing rural development. The rural element shall include measures that apply to rural development and protect the rural character of the area, as established by the county, by:
     (i) Containing or otherwise controlling rural development;
     (ii) Assuring visual compatibility of rural development with the surrounding rural area;
     (iii) Reducing the inappropriate conversion of undeveloped land into sprawling, low-density development in the rural area;
     (iv) Protecting critical areas, as provided in RCW 36.70A.060, and surface water and ground water resources; and
     (v) Protecting against conflicts with the use of agricultural, forest, and mineral resource lands designated under RCW 36.70A.170.
     (d) Limited areas of more intensive rural development. Subject to the requirements of this subsection and except as otherwise specifically provided in this subsection (5)(d), the rural element may allow for limited areas of more intensive rural development, including necessary public facilities and public services to serve the limited area as follows:
     (i) Rural development consisting of the infill, development, or redevelopment of existing commercial, industrial, residential, or mixed-use areas, whether characterized as shoreline development, villages, hamlets, rural activity centers, or crossroads developments.
     (A) A commercial, industrial, residential, shoreline, or mixed-use area shall be subject to the requirements of (d)(iv) of this subsection, but shall not be subject to the requirements of (c)(ii) and (iii) of this subsection.
     (B) Any development or redevelopment other than an industrial area or an industrial use within a mixed-use area or an industrial area under this subsection (5)(d)(i) must be principally designed to serve the existing and projected rural population.
     (C) Any development or redevelopment in terms of building size, scale, use, or intensity shall be consistent with the character of the existing areas. Development and redevelopment may include changes in use from vacant land or a previously existing use so long as the new use conforms to the requirements of this subsection (5);
     (ii) The intensification of development on lots containing, or new development of, small-scale recreational or tourist uses, including commercial facilities to serve those recreational or tourist uses, that rely on a rural location and setting, but that do not include new residential development. A small-scale recreation or tourist use is not required to be principally designed to serve the existing and projected rural population. Public services and public facilities shall be limited to those necessary to serve the recreation or tourist use and shall be provided in a manner that does not permit low-density sprawl;
     (iii) The intensification of development on lots containing isolated nonresidential uses or new development of isolated cottage industries and isolated small-scale businesses that are not principally designed to serve the existing and projected rural population and nonresidential uses, but do provide job opportunities for rural residents. Rural counties may allow the expansion of small-scale businesses as long as those small-scale businesses conform with the rural character of the area as defined by the local government according to RCW 36.70A.030(((14))) (15). Rural counties may also allow new small-scale businesses to utilize a site previously occupied by an existing business as long as the new small-scale business conforms to the rural character of the area as defined by the local government according to RCW 36.70A.030(((14))) (15). Public services and public facilities shall be limited to those necessary to serve the isolated nonresidential use and shall be provided in a manner that does not permit low-density sprawl;
     (iv) A county shall adopt measures to minimize and contain the existing areas or uses of more intensive rural development, as appropriate, authorized under this subsection. Lands included in such existing areas or uses shall not extend beyond the logical outer boundary of the existing area or use, thereby allowing a new pattern of low-density sprawl. Existing areas are those that are clearly identifiable and contained and where there is a logical boundary delineated predominately by the built environment, but that may also include undeveloped lands if limited as provided in this subsection. The county shall establish the logical outer boundary of an area of more intensive rural development. In establishing the logical outer boundary the county shall address (A) the need to preserve the character of existing natural neighborhoods and communities, (B) physical boundaries such as bodies of water, streets and highways, and land forms and contours, (C) the prevention of abnormally irregular boundaries, and (D) the ability to provide public facilities and public services in a manner that does not permit low-density sprawl;
     (v) For purposes of (d) of this subsection, an existing area or existing use is one that was in existence:
     (A) On July 1, 1990, in a county that was initially required to plan under all of the provisions of this chapter;
     (B) On the date the county adopted a resolution under RCW 36.70A.040(2), in a county that is planning under all of the provisions of this chapter under RCW 36.70A.040(2); or
     (C) On the date the office of financial management certifies the county's population as provided in RCW 36.70A.040(5), in a county that is planning under all of the provisions of this chapter pursuant to RCW 36.70A.040(5).
     (e) Exception. This subsection shall not be interpreted to permit in the rural area a major industrial development or a master planned resort unless otherwise specifically permitted under RCW 36.70A.360 and 36.70A.365.
     (6) A transportation element that implements, and is consistent with, the land use element.
     (a) The transportation element shall include the following subelements:
     (i) Land use assumptions used in estimating travel;
     (ii) Estimated traffic impacts to state-owned transportation facilities resulting from land use assumptions to assist the department of transportation in monitoring the performance of state facilities, to plan improvements for the facilities, and to assess the impact of land-use decisions on state-owned transportation facilities;
     (iii) Facilities and services needs, including:
     (A) An inventory of air, water, and ground transportation facilities and services, including transit alignments and general aviation airport facilities, to define existing capital facilities and travel levels as a basis for future planning. This inventory must include state-owned transportation facilities within the city or county's jurisdictional boundaries;
     (B) Level of service standards for all locally owned arterials and transit routes to serve as a gauge to judge performance of the system. These standards should be regionally coordinated;
     (C) For state-owned transportation facilities, level of service standards for highways, as prescribed in chapters 47.06 and 47.80 RCW, to gauge the performance of the system. The purposes of reflecting level of service standards for state highways in the local comprehensive plan are to monitor the performance of the system, to evaluate improvement strategies, and to facilitate coordination between the county's or city's six-year street, road, or transit program and the department of transportation's six-year investment program. The concurrency requirements of (b) of this subsection do not apply to transportation facilities and services of statewide significance except for counties consisting of islands whose only connection to the mainland are state highways or ferry routes. In these island counties, state highways and ferry route capacity must be a factor in meeting the concurrency requirements in (b) of this subsection;
     (D) Specific actions and requirements for bringing into compliance locally owned transportation facilities or services that are below an established level of service standard;
     (E) Forecasts of traffic for at least ten years based on the adopted land use plan to provide information on the location, timing, and capacity needs of future growth;
     (F) Identification of state and local system needs to meet current and future demands. Identified needs on state-owned transportation facilities must be consistent with the statewide multimodal transportation plan required under chapter 47.06 RCW;
     (iv) Finance, including:
     (A) An analysis of funding capability to judge needs against probable funding resources;
     (B) A multiyear financing plan based on the needs identified in the comprehensive plan, the appropriate parts of which shall serve as the basis for the six-year street, road, or transit program required by RCW 35.77.010 for cities, RCW 36.81.121 for counties, and RCW 35.58.2795 for public transportation systems. The multiyear financing plan should be coordinated with the ((six-year)) ten-year improvement program developed by the department of transportation as required by RCW 47.05.030;
     (C) If probable funding falls short of meeting identified needs, a discussion of how additional funding will be raised, or how land use assumptions will be reassessed to ensure that level of service standards will be met;
     (v) Intergovernmental coordination efforts, including an assessment of the impacts of the transportation plan and land use assumptions on the transportation systems of adjacent jurisdictions;
     (vi) Demand-management strategies;
     (vii) Pedestrian and bicycle component to include collaborative efforts to identify and designate planned improvements for pedestrian and bicycle facilities and corridors that address and encourage enhanced community access and promote healthy lifestyles.
     (b) After adoption of the comprehensive plan by jurisdictions required to plan or who choose to plan under RCW 36.70A.040, local jurisdictions must adopt and enforce ordinances which prohibit development approval if the development causes the level of service on a locally owned transportation facility to decline below the standards adopted in the transportation element of the comprehensive plan, unless transportation improvements or strategies to accommodate the impacts of development are made concurrent with the development. These strategies may include increased public transportation service, ride sharing programs, demand management, and other transportation systems management strategies. For the purposes of this subsection (6) "concurrent with the development" shall mean that improvements or strategies are in place at the time of development, or that a financial commitment is in place to complete the improvements or strategies within six years.
     (c) The transportation element described in this subsection (6), and the six-year plans required by RCW 35.77.010 for cities, RCW 36.81.121 for counties, and RCW 35.58.2795 for public transportation systems, and the ten-year plan required by RCW 47.05.030 for the state, must be consistent.
     (7) An economic development element establishing local goals, policies, objectives, and provisions for economic growth and vitality and a high quality of life. The element shall include: (a) A summary of the local economy such as population, employment, payroll, sectors, businesses, sales, and other information as appropriate; (b) a summary of the strengths and weaknesses of the local economy defined as the commercial and industrial sectors and supporting factors such as land use, transportation, utilities, education, work force, housing, and natural/cultural resources; and (c) an identification of policies, programs, and projects to foster economic growth and development and to address future needs. A city that has chosen to be a residential community is exempt from the economic development element requirement of this subsection.
     (8) A park and recreation element that implements, and is consistent with, the capital facilities plan element as it relates to park and recreation facilities. The element shall include: (a) Estimates of park and recreation demand for at least a ten-year period; (b) an evaluation of facilities and service needs; and (c) an evaluation of intergovernmental coordination opportunities to provide regional approaches for meeting park and recreational demand.
     (9) It is the intent that new or amended elements required after January 1, 2002, be adopted concurrent with the scheduled update provided in RCW 36.70A.130. Requirements to incorporate any such new or amended elements shall be null and void until funds sufficient to cover applicable local government costs are appropriated and distributed by the state at least two years before local government must update comprehensive plans as required in RCW 36.70A.130.

Sec. 2   RCW 36.70A.090 and 1990 1st ex.s. c 17 s 9 are each amended to read as follows:
     A comprehensive plan should provide for innovative land use management techniques, including, but not limited to, density bonuses, cluster housing, planned unit developments, mixed-use development, accessory dwelling units, and the transfer of development rights.

NEW SECTION.  Sec. 3   A new section is added to chapter 36.70A RCW to read as follows:
     (1) A county and one or more of its cities, or two or more counties sharing a common border and their cities, may adopt countywide planning policies or multicounty planning policies establishing subregions in order to address housing and employment markets that cross jurisdictional boundaries. Policies adopted under this section may include, but are not limited to:
     (a) Policies that reallocate among the counties and cities in the subregion the population growth established for each local government under RCW 36.70A.110;
     (b) Policies that provide for a sufficient number of housing units to accommodate the existing housing needs and projected population growth in the subregion; and
     (c) Policies that provide for sufficient land suitable for development to meet the needs for commercial and industrial growth in the subregion.
     (2) The local governments within the subregion may use the countywide planning policies or multicounty planning policies, interlocal agreements under chapter 39.34 RCW, or any other appropriate mechanism to implement the policies established under subsection (1) of this section.

Sec. 4   RCW 36.70A.110 and 2004 c 206 s 1 are each amended to read as follows:
     (1) In accordance with the requirements of this section, each county that is required or chooses to plan under RCW 36.70A.040 shall designate an urban growth area or areas within which urban growth shall be encouraged and outside of which growth can occur only if it is not urban in nature. Each city that is located in such a county shall be included within an urban growth area. An urban growth area may include more than a single city. An urban growth area may include territory that is located outside of a city only if such territory already is characterized by urban growth whether or not the urban growth area includes a city, or is adjacent to territory already characterized by urban growth, or is a designated new fully contained community as defined by RCW 36.70A.350.
     (2) Based upon the growth management population projection made for the county by the office of financial management, the county and each city within the county shall include areas and densities sufficient to permit the urban growth that is projected to occur in the county or city for the succeeding twenty-year period, except for those urban growth areas contained totally within a national historical reserve.
     Each urban growth area shall permit urban densities and shall include greenbelt and open space areas. In the case of urban growth areas contained totally within a national historical reserve, the city may restrict densities, intensities, and forms of urban growth as determined to be necessary and appropriate to protect the physical, cultural, or historic integrity of the reserve. An urban growth area determination may include a reasonable land market supply factor and shall permit a range of urban densities and uses. In determining this market factor, cities and counties may consider local circumstances. Cities and counties have discretion in their comprehensive plans to make many choices about accommodating growth.
     Within one year of July 1, 1990, each county that as of June 1, 1991, was required or chose to plan under RCW 36.70A.040, shall begin consulting with each city located within its boundaries and each city shall propose the location of an urban growth area. Within sixty days of the date the county legislative authority of a county adopts its resolution of intention or of certification by the office of financial management, all other counties that are required or choose to plan under RCW 36.70A.040 shall begin this consultation with each city located within its boundaries. The county shall attempt to reach agreement with each city on the location of an urban growth area within which the city is located. If such an agreement is not reached with each city located within the urban growth area, the county shall justify in writing why it so designated the area an urban growth area. A city may object formally with the department over the designation of the urban growth area within which it is located. Where appropriate, the department shall attempt to resolve the conflicts, including the use of mediation services.
     (3) Counties planning under RCW 36.70A.040 with populations of at least one hundred seventy-five thousand must:
     (a) Consult and cooperate with each city within an urban growth area proposed for modification prior to and concurrent with actions to modify the urban growth area within which the city or cities are located; and
     (b) Report to the appropriate committees of the house of representatives and the senate by December 1, 2007, on the implementation of, and any impediments related to, the requirements of (a) of this subsection.
     (4) Urban growth should be located first in areas already characterized by urban growth that have adequate existing public facility and service capacities to serve such development, second in areas already characterized by urban growth that will be served adequately by a combination of both existing public facilities and services and any additional needed public facilities and services that are provided by either public or private sources, and third in the remaining portions of the urban growth areas. Urban growth may also be located in designated new fully contained communities as defined by RCW 36.70A.350.
     (((4))) (5) In general, cities are the units of local government most appropriate to provide urban governmental services. In general, it is not appropriate that urban governmental services be extended to or expanded in rural areas except in those limited circumstances shown to be necessary to protect basic public health and safety and the environment and when such services are financially supportable at rural densities and do not permit urban development.
     (((5))) (6) On or before October 1, 1993, each county that was initially required to plan under RCW 36.70A.040(1) shall adopt development regulations designating interim urban growth areas under this chapter. Within three years and three months of the date the county legislative authority of a county adopts its resolution of intention or of certification by the office of financial management, all other counties that are required or choose to plan under RCW 36.70A.040 shall adopt development regulations designating interim urban growth areas under this chapter. Adoption of the interim urban growth areas may only occur after public notice; public hearing; and compliance with the state environmental policy act, chapter 43.21C RCW, and RCW 36.70A.110. Such action may be appealed to the appropriate growth management hearings board under RCW 36.70A.280. Final urban growth areas shall be adopted at the time of comprehensive plan adoption under this chapter.
     (((6))) (7) Each county shall include designations of urban growth areas in its comprehensive plan.
     (((7))) (8) An urban growth area designated in accordance with this section may include within its boundaries urban service areas or potential annexation areas designated for specific cities or towns within the county.

NEW SECTION.  Sec. 5   (1) Population in western Washington is growing and will continue to grow. Models indicate that the central Cascades region can expect a doubling of the population within the next one hundred years.
     (2) The growth management act has used large lot zoning to discourage residential development of rural and resource lands. However, historical entitlement of smaller lots coupled with rapidly increasing real estate values have led to widespread development of nonurban lots of a variety of sizes, locations, and zoning categories. This problem is exacerbated by recent trends in the timber industry, resulting in ownership changes, accelerated harvesting regimes, and likely conversion of many properties to residential development in the near term. It is reasonable to assume that under a one hundred-year timeframe all nonurban lots are likely to be developed.
     (3) The increase in nonurban development has disproportionate undesirable impacts to landscape and watershed integrity, environmental functions, economic viability of resource lands, and public costs.
     (4) Additional approaches to managing rural growth are needed. Success will likely not come from a single strategy; rather, a multifaceted approach is required. Implementation of a region-wide or statewide transfer of development rights program could play a major role in finding a solution.
     (5) The most important component in building a successful transfer of development rights program is creating adequate receiving area capacity. Accommodating dramatic population growth while meeting resource conservation goals over the next one hundred years will require greatly increasing receiving area capacity. It is a regional goal to direct growth to urban areas, and therefore it is a priority to develop this receiving capacity primarily in urban areas. In addition, the potential for additional receiving areas in appropriate nonurban areas is being explored concurrently.

NEW SECTION.  Sec. 6   A new section is added to chapter 36.70A RCW to read as follows:
     (1) A county planning under RCW 36.70A.040 that meets the criteria in subsection (2) of this section may designate no more than one rural village in the rural area outside of limited areas of more intensive rural development established pursuant to RCW 36.70A.070(5)(d). For the purposes of this section, "rural village" is defined as a compact, environmentally friendly rural development created using transfer of development rights. Rural villages will be located in the rural area, and shall coexist with traditional rural land uses such as farming and forestry. Rural villages are not urban growth, nor are they lands "characterized by urban growth" for purposes of citing adjacent or nearby lands as new urban growth areas pursuant to RCW 36.70A.110(2).
     (2) Under this chapter, a county may designate a rural village in the rural area outside of limited areas of more intensive rural development established pursuant to RCW 36.70A.070(5)(d) as follows:
     (a) Residential Development. The rural village may contain fifty to three hundred fifty dwelling units and may include single-family detached or attached housing, multifamily housing, and accessory dwelling units. The maximum allowable lot size for single-family detached units is seven thousand square feet within a rural village.
     (b) Nonresidential Development. The rural village may include nonresidential development that is designed to serve the village population and nearby existing and projected rural residents.
     (c) Development Right Transfers. All rural village nonresidential square footage or dwelling units that exceed base zoning shall require the transfer or purchase of development rights from designated land within the rural area or natural resource lands ("sending areas") as follows:
     (i) For the purposes of this section, one transferable development right shall be allocated for each unrealized dwelling unit permitted by applicable development regulations, as calculated on a gross basis (allowed density x gross acreage of the property). In determining how these development rights transfer to the rural village, the county may consider local circumstances, but is encouraged to provide incentives to transfer or purchase development rights from existing nonconforming lots and authorize the transfer or purchase of development rights from larger properties that will provide landscape scale conservation benefits consistent with RCW 36.70A.011 and reduce transactions and acquisition costs helping to make the end product more affordable.
     (ii) At least one-half of the development rights included in a rural village shall be transferred from the rural area, with any remainder coming from resource lands.
     (iii) Each development right transferred from an existing rural lot nonconforming as to minimum lot size or density shall be given a 0.25 development rights bonus when used within a rural village.
     (d) Conservation Easements. Development rights purchased or transferred from sending area properties shall be extinguished with conservation easements held jointly by a nonprofit organization and the relevant local government. The conservation easement shall permanently restrict development of the property, but shall allow for typical rural land uses, including agriculture and working forestry. A stewardship fund established by endowment, contractually established annual homeowners association fees, or a perpetual resale fee shall be created for the sending area property to ensure capacity for stewardship of conservation easement lands held in fee by the homeowners association of the rural village, and to monitor and enforce the conservation easement for all sending lands by the responsible parties.
     (e) Siting Criteria. A county shall establish the criteria for siting a rural village in the rural element of its comprehensive plan. The criteria shall be in keeping with local circumstances, RCW 36.70A.070(5)(c), and favor sites with limited visual impacts, proximity to existing transportation networks, limited need for service improvements, affordability of housing in the rural village, and appropriate environmental characteristics.
     (f) Designation. A rural village shall be designated in the rural element of the comprehensive plan. The regulations governing its development, including location of sending areas, shall be included in the county's development regulations. The rural village must comply with all relevant development regulations, including critical areas regulations and transportation concurrency requirements. The county may adopt level of service or concurrency standards to address the consolidation of traffic that will result from a rural village.
     (g) Boundaries. Clear boundaries shall be delineated for each rural village and shall not be expanded. Boundaries shall be buffered from surrounding land uses by physical barriers (e.g., river or undeveloped bluff) or a swath of permanently conserved land at least two hundred fifty feet wide. Boundary delineations shall maintain and integrate riparian buffers required under previous land use designation, or as required by existing critical areas designation, whichever is greater. A conservation easement restricting development in this buffer shall be held jointly by a nonprofit organization and the relevant local government.
     (h) Public Services and Public Facilities.
     (i) Public services and public facilities shall be limited to those necessary to serve the rural village and shall be provided in a manner that does not permit low-density sprawl. For the purposes of this section, "public services and public facilities" shall not include public schools or school facilities.
     (ii) New or improved infrastructure necessary to serve the rural village shall be provided or applicable impact fees paid. New or improved infrastructure may be provided by the applicant, the county, or by a public-private partnership.
     (iii) Transportation.
     (A) Multimodal site planning shall be implemented and may include, but is not limited to, neighborhood circulators; bicycle paths; and park and ride, community vanpool, and carshare parking spaces.
     (B) A pedestrian or nonmotorized transportation network of trails or walkways should connect residences to services and open space within and adjacent to the rural village. Walkways are pedestrian lanes that provide people with space to travel within the public right-of-way that is separated from roadway vehicles. They also provide places for children to walk, run, skate, ride bikes, and play. These facilities also improve mobility for pedestrians and provide access for all types of pedestrian travel. Walkways should be part of every new and renovated facility and every effort should be made to retrofit streets that currently do not have sidewalks. Walkways may be constructed of asphalt, crushed stone, or other materials if they are properly maintained and accessible as well as firm, stable, and slip-resistant.
     (C) Road capacity exists to accommodate the projected needs of the village population and it shall meet county standards. Necessary roadway improvements may include safety enhancements, site access projects, signage revisions, and traffic facility flow and management tools.
     (D) Counties shall develop innovative road standards for rural villages that are compatible with rural character and minimize impervious surfaces and storm water runoff.
     (E) Rural villages are not to be gated communities. Legal instruments shall be recorded granting to the general public the right to access and utilize the transportation facilities described in (h)(iii)(A) through (D) of this subsection.
     (iv) Water rights. A community water system shall be appropriately sized to serve the rural village and shall rely on existing water law to obtain adequate water rights. Such water system shall incorporate efficiency and conservation measures designed to reduce water usage.
     (v) Wastewater treatment. Counties are encouraged to authorize innovative techniques for wastewater treatment in rural villages, including, but not limited to, membrane bioreactor systems. Greywater reuse for flushing, irrigation, and other appropriate uses should be authorized.
     (vi) Storm water management. Counties should authorize innovative techniques for storm water management, including, but not limited to, bioswales and other natural storm water management systems and alternative uses for storm water that encourage water reuse, groundwater infiltration, or both.
     (i) Open Space. The rural village shall contain community open space. Uses of this open space may include, but are not limited to, community gathering space, village green, park, or rural resource use. A portion of the open space must function as a village green or gathering place able to accommodate the population of the rural village.
     (j) Green Building. All rural villages shall meet the national association of home builders gold level green building guidelines. Equivalent or more stringent green building standards may be substituted for this requirement (e.g., leadership in energy and environmental design, green globes, or other recognized green building standards).
     (k) Native Vegetation. Disturbance of some native vegetation is likely unavoidable in the development of rural villages. However, maintaining forest cover and other native vegetation is important to the health of watersheds and the Puget Sound. Thus, to the maximum extent possible, clearing of native vegetation shall be avoided or mitigated.
     (i) The disturbance of native plants and forest cover on the development site shall be minimized.
     (ii) Disturbance of the development site shall be mitigated via on-site or off-site restoration or replanting of an area roughly equivalent in size to the cleared area via a fee paid to a qualified government or nonprofit land management organization.
     (iii) Native plant species for landscaping of nonlawn areas of private residences shall be used. Public rights-of-way, street planting strips, and common areas shall be replanted with a regionally appropriate native plant community and structure.
     (l) Design Standards. A county shall include in its development regulations design standards to protect the rural character of the area. At a minimum these design standards should address the following:
     (i) Utilities;
     (ii) Roadways and transportation;
     (iii) Visual impacts (e.g., protecting view sheds along roadways, ridgelines, hillsides, etc.); and
     (iv) Lighting and the preservation of dark skies.
     (m) Notice on Title. Each county designating a rural village pilot project shall require that all plats, short plats, development permits, and building permits issued for development activities within a rural village demonstration project contain a notice that the subject property is located in a rural area where a variety of traditional rural activities may occur that may generate sights, sounds, and smells associated with farming, forestry, and other traditional rural uses. In addition, the notice for lands within a rural village demonstration project shall advise that services in rural areas are often limited and consist of rural governmental services rather than urban governmental services. The notice shall run with the land.
     (3) A county may not issue groundwater well permits for any groundwater uses except stock-watering purposes, or agricultural industrial purposes allowed under RCW 90.44.050 on properties from which development rights have been sold or transferred (sending sites).
     (4) Any county intending to designate a rural village demonstration project shall notify the department. The department shall ensure that a maximum of three demonstration projects may be established under this section. Any county choosing to withdraw a demonstration project shall notify the department and the department may accept an alternate project.
     (5) The department shall report to the appropriate committees of the legislature annually on the progress of any rural villages established under this section. Additionally, the department shall prepare a final report to be submitted no later than December 1, 2012, on the efficacy of this section in accomplishing the purposes of RCW 36.70A.011. In preparing this report, the department shall consult with sending and receiving area landowners, project developers, builders, the county, and any other interested individuals or organizations. The report shall:
     (a) Review the county adopted policies and regulations to enable rural village demonstration projects for consistency with the goals of section 5 of this act and RCW 36.70A.011;
     (b) Provide pertinent information on the permitting and development of the rural village demonstration projects;
     (c) Provide a project-specific analysis for each demonstration project looking at the effect of the rural village on the following:
     (i) Rural population capacity including the impacts of the transfers from resource lands;
     (ii) Land disturbance and impervious surfaces;
     (iii) Water resources and watershed health; and
     (iv) Wildlife habitat; and
     (d) Recommend whether additional rural villages should be authorized and, if so, whether changes should be made to this section to foster the purposes of rural villages and rural lands as described in section 5 of this act, RCW 36.70A.011, and 36.70A.070(5).
     (6) The authority of a county meeting the criteria of subsection (2) of this section to designate a rural village in its development regulations terminates on December 31, 2009, unless a county has notified the department, pursuant to subsection (4) of this section, of its intent to designate a rural village. Any rural village designated under this authority shall be available for the approved uses as long as the rural village is in compliance with the conditions of approval adopted by the county.
     (7) This section applies to counties that are located within the Puget Sound regional council's planning area.
     (8) This section is intended to further the purposes of RCW 36.70A.070(5)(c), and should in no way be interpreted to alter the requirements therein."