BILL REQ. #:  S-3575.1 

Read first time 01/11/12.   Referred to Committee on Transportation.

     AN ACT Relating to pairing required investments in compensatory environmental mitigation, including the mitigation of transportation projects, with existing programs currently referenced in Title 76 RCW that enhance natural environmental functions; amending RCW 47.01.300, 90.74.005, 90.74.010, 90.74.020, and 90.74.030; adding new sections to chapter 90.74 RCW; and adding a new section to chapter 76.09 RCW.

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

Sec. 1   RCW 47.01.300 and 1994 c 258 s 4 are each amended to read as follows:
     The department shall, in cooperation with environmental regulatory authorities:
     (1) Identify and document environmental resources in the development of the statewide multimodal plan under RCW 47.06.040;
     (2) Allow for public comment regarding changes to the criteria used for prioritizing projects under chapter 47.05 RCW before final adoption of the changes by the commission;
     (3) Use an environmental review as part of the project prospectus identifying potential environmental impacts, mitigation, the utilization of the mitigation option provided in section 5 of this act, and costs during the early project identification and selection phase, submit the prospectus to the relevant environmental regulatory authorities, and maintain a record of comments and proposed revisions received from the authorities;
     (4) Actively work with the relevant environmental regulatory authorities during the design alternative analysis process and seek written concurrence from the authorities that they agree with the preferred design alternative selected;
     (5) Develop a uniform methodology, in consultation with relevant environmental regulatory authorities, for submitting plans and specifications detailing project elements that impact environmental resources, and proposed mitigation measures including the mitigation option provided in section 5 of this act, to the relevant environmental regulatory authorities during the preliminary specifications and engineering phase of project development;
     (6) Screen construction projects to determine which projects will require complex or multiple permits. The permitting authorities shall develop methods for initiating review of the permit applications for the projects before the final design of the projects;
     (7) Conduct special prebid meetings for those projects that are environmentally complex; and
     (8) Review environmental considerations related to particular projects during the preconstruction meeting held with the contractor who is awarded the bid.

Sec. 2   RCW 90.74.005 and 1997 c 424 s 1 are each amended to read as follows:
     (1) The legislature finds that:
     (a) The state lacks a clear policy relating to the mitigation of wetlands and aquatic habitat for infrastructure development;
     (b) Regulatory agencies have generally required project proponents to use compensatory mitigation only at the site of the project's impacts and to mitigate narrowly for the habitat or biological functions impacted by a project;
     (c) This practice of considering traditional on-site, in-kind mitigation may provide fewer environmental benefits when compared to innovative mitigation proposals that provide benefits in advance of a project's planned impacts and that restore functions or habitat other than those impacted at a project site; ((and))
     (d) Regulatory decisions on development proposals that attempt to incorporate innovative mitigation measures take an unreasonably long period of time and are subject to a great deal of uncertainty and additional expenses; and
     (e) Greater environmental benefits are achievable through compensatory wetland mitigation when the collective mitigation investments of project proponents is paired with the structure of existing, successful state programs that are designed to enhance and preserve aquatic and riparian functions but are not achieving their maximum, collective benefit due to a lack of funding support. Programs such as the family forest fish passage program have a logical and physical nexus with many underlying projects, especially road projects, and are proven to create a sustained benefit in the aquatic environment at a per-dollar-invested level greater than other mitigation options currently available.
     (2) The legislature therefore declares that it is the policy of the state to authorize innovative mitigation measures by requiring state regulatory agencies to consider mitigation proposals for ((infrastructure)) projects that:
     (a) Are timed, designed, and located in a manner to provide equal or better biological functions and values compared to traditional on-site, in-kind mitigation proposals; or
     (b) Are designed to pair collective mitigation investments with successful state programs that are designed to enhance and preserve aquatic and riparian functions.
     (3) It is the intent of the legislature to authorize local governments to accommodate the goals of this chapter. It is not the intent of the legislature to: (a) Restrict the ability of a project proponent to pursue project specific mitigation; or (b) create any new authority for regulating wetlands or aquatic habitat beyond what is specifically provided for in this chapter.

Sec. 3   RCW 90.74.010 and 1997 c 424 s 2 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Mitigation" means sequentially avoiding impacts, minimizing impacts, or compensating for remaining unavoidable impacts.
     (2) "Compensatory mitigation" means the restoration, creation, enhancement, or preservation of uplands, wetlands, or other aquatic resources for the purposes of compensating for unavoidable adverse impacts that remain after all appropriate and practicable avoidance and minimization has been achieved. "Compensatory mitigation" includes mitigation that:
     (a) Occurs at the same time as, or in advance of, a project's planned environmental impacts;
     (b) Is located in a site either on, near, or distant from the project's impacts; and
     (c) Provides either the same or different biological functions and values as the functions and values impacted by the project.
     (3) "Infrastructure development" means an action that is critical for the maintenance or expansion of an existing infrastructure feature such as a highway, rail line, airport, marine terminal, utility corridor, harbor area, or hydroelectric facility and is consistent with an approved land use planning process. This planning process may include the growth management act, chapter 36.70A RCW, or the shoreline management act, chapter 90.58 RCW, in areas covered by those chapters.
     (4) "Mitigation plan" means a document or set of documents developed through joint discussions between a project proponent and environmental regulatory agencies that describe the unavoidable wetland or aquatic resource impacts of ((the)) a proposed infrastructure development or minor project and the proposed compensatory mitigation for those impacts.
     (5) "Project proponent" means a public or private entity responsible for preparing a mitigation plan.
     (6) "Watershed" means an area identified as a state of Washington water resource inventory area under WAC 173-500-040 as it exists on ((July 27, 1997)) the effective date of this section.
     (7) "Minor project" means a development project that requires the completion of compensatory mitigation that does not meet the definition of "infrastructure development."

Sec. 4   RCW 90.74.020 and 1997 c 424 s 3 are each amended to read as follows:
     (1) Project proponents may use a mitigation plan to propose compensatory mitigation within a watershed. A mitigation plan shall:
     (a) Contain provisions that guarantee the long-term viability of the created, restored, enhanced, or preserved habitat, including assurances for protecting any essential biological functions and values defined in the mitigation plan;
     (b) Contain provisions for long-term monitoring of any created, restored, or enhanced mitigation site; and
     (c) Be consistent with the local comprehensive land use plan and any other applicable planning process in effect for the development area, such as an adopted subbasin or watershed plan.
     (2)(a) The departments of ecology and fish and wildlife may not limit the scope of options in a mitigation plan to areas on or near the project site, or to habitat types of the same type as contained on the project site. The departments of ecology and fish and wildlife shall fully review and give due consideration to compensatory mitigation proposals that improve the overall biological functions and values of the watershed or bay and accommodate the mitigation needs of the infrastructure development or minor project, including proposals or portions of proposals that incorporate the mitigation option set forth in section 5 of this act.
     (b) The departments of ecology and fish and wildlife are not required to grant approval to a mitigation plan that the departments find does not provide equal or better biological functions and values within the watershed or bay.
     (3) When making a permit or other regulatory decision under the guidance of this chapter, the departments of ecology and fish and wildlife shall consider whether the mitigation plan provides equal or better biological functions and values, compared to the existing conditions, for the target resources or species identified in the mitigation plan. This consideration shall be based upon the following factors:
     (a) The relative value of the mitigation for the target resources, in terms of the quality and quantity of biological functions and values provided;
     (b) The compatibility of the proposal with the intent of broader resource management and habitat management objectives and plans, such as existing resource management plans, watershed plans, critical areas ordinances, the forest practices habitat conservation plan, the forestry riparian easement program, the forest practices board's acquisition program for riparian open space and critical habitat, programs to provide public cost assistance to small forest landowners associated with the road maintenance and abandonment processes, and shoreline master programs;
     (c) The ability of the mitigation to address scarce functions or values within a watershed;
     (d) The benefits of the proposal to broader watershed landscape, including the benefits of connecting various habitat units or providing population-limiting habitats or functions for target species;
     (e) The benefits of early implementation of habitat mitigation for projects that provide compensatory mitigation in advance of the project's planned impacts; and
     (f) The significance of any negative impacts to nontarget species or resources.
     (4) A mitigation plan may be approved through a memorandum of agreement between the project proponent and either the department of ecology or the department of fish and wildlife, or both.

NEW SECTION.  Sec. 5   A new section is added to chapter 90.74 RCW to read as follows:
     (1) A project proponent may opt to satisfy, with the approval of the department of ecology or the department of fish and wildlife, all or a portion of the compensatory mitigation requirements for an infrastructure development or a minor project through the inclusion in the development or project's corresponding mitigation plan a required monetary payment to the riparian and aquatic resources enhancement account created in section 6 of this act.
     (2) The amount of the required payments to the riparian and aquatic resources enhancement account must be determined by the joint discussions among the project proponent and the environmental regulatory agencies consistent with the guidance of RCW 90.74.020. The project proponent and the environmental regulatory agencies may decide if required payments to the riparian and aquatic resources enhancement account are to be made as one lump sum or as a commitment for a series of payments over time.
     (3) Payments to the riparian and aquatic resources enhancement account may only be used to offset other compensatory mitigation requirements of the infrastructure development or minor project. Payments may not be required that are additive to other compensatory mitigation requirements.

NEW SECTION.  Sec. 6   A new section is added to chapter 90.74 RCW to read as follows:
     (1) The riparian and aquatic resources enhancement account is created in the custody of the state treasurer. All receipts from payments made by project proponents pursuant to a mitigation plan entered into under this chapter must be deposited into the account. The account may also receive direct legislative appropriations and accept nonstate grant payments and private donations. Only the forest practices board may authorize expenditures from the account in a manner consistent with section 8 of this act. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.
     (2)(a) Expenditures from the account may be used only as contributing or additive funds for state programs that contribute to ecosystem services, as that term is defined in RCW 76.09.020, by forwarding the enhancement or preservation of riparian and aquatic resources and are not to be considered substitute or replacement funds for other funding directed or committed to a program. These state programs include, but are not limited to:
     (i) Incentives to landowners to provide additional conservation measures recommended through the adaptive management program outlined in the forest practices rules, as that term is defined in RCW 76.09.020;
     (ii) The forestry riparian easement program established in RCW 76.13.120;
     (iii) The program required to be established by the forest practices board under RCW 76.09.040 that acquires conservation easements for land that is riparian open space or critical habitat for threatened or endangered species; and
     (iv) Programs to provide public cost assistance to small forest landowners associated with the road maintenance and abandonment processes referenced in RCW 76.09.410(2).
     (b) The decision as to which qualifying programs receive contributing funding from the riparian and aquatic resources enhancement account must be made by the forest practices board. However, the forest practices board must seek input from the department of ecology, the department of fish and wildlife, or other state or federal environmental regulatory agencies in an attempt to match funding with projects that satisfy the guidance for compensatory mitigation projects under RCW 90.74.020.
     (3) To the degree practicable, the forest practices board must direct expenditures from the riparian and aquatic resources enhancement account to riparian and aquatic resources projects and programs located in specific watersheds based on the proportion of mitigation plans located in each specific watershed that contain requirements under section 5 of this act for payments by project proponents to the riparian and aquatic resources enhancement account.
     (4) The forest practices board may retain up to five percent of the funds in the riparian and aquatic resources enhancement account for the department of natural resources to use as reimbursement for administrative costs of the riparian and aquatic resources enhancement account.

Sec. 7   RCW 90.74.030 and 1997 c 424 s 4 are each amended to read as follows:
     (1) In making regulatory decisions relating to wetland or aquatic resource mitigation, the departments of ecology and fish and wildlife shall, at the request of the project proponent, follow the guidance of ((RCW 90.74.005 through 90.74.020)) this chapter.
     (2) If the department of ecology or the department of fish and wildlife receives multiple requests for review of mitigation plans, each department may schedule its review of these proposals to conform to available budgetary resources.

NEW SECTION.  Sec. 8   A new section is added to chapter 76.09 RCW to read as follows:
     (1) As part of the responsibilities of the board set forth in this chapter, it must serve as the entity responsible for authorizing expenditures from the riparian and aquatic resources enhancement account created in section 6 of this act. However, the board's authority over the riparian and aquatic resources enhancement account is limited to identifying and directing expenditures. This section does not give the board the authority to change or dictate how programs funded by the riparian and aquatic resources enhancement account are administered.
     (2) The board may adopt rules, if deemed necessary, outlining its administration of the riparian and aquatic resources enhancement account.