"Sec. 1   RCW 90.38.005 and 1989 c 429 s 1 are each amended to read as follows:
     (1) The legislature finds that:
     (a) Under present physical conditions in the Yakima river basin there is an insufficient supply of ground and surface water to satisfy the present needs of the basin, and that the general health, welfare, and safety of the people of the Yakima river basin depend upon the conservation, management, development, and optimum use of all the basin's water resources;
     (b) ((Pursuant to P.L. 96-162,)) The future competition for water among municipal, domestic, industrial, agricultural, and instream water interests in the Yakima river basin will be intensified by continued population growth, and by changes in climate and precipitation anticipated to reduce the basin's snow pack and thereby reduce the total water supply available to existing water users, instream flows, and carryover storage;
     (c) To address the challenges described in this subsection, congress has enacted several bills to promote Yakima river basin water enhancement, each of which was urged for enactment by this state, the United States ((is now conducting)) has completed a study of ways to provide needed waters through improvements of the federal water project presently existing in the Yakima river basin, and federal, tribal, state, and local cooperators have developed an integrated water resource management plan for improving water supply, habitat, and stream flow conditions in the Yakima river basin;
     (d) As part of the Yakima river basin water enhancement project, the United States department of the interior's bureau of reclamation is now seeking funding to support implementation of the integrated water resource management plan for the Yakima river basin, which was jointly prepared by the Washington state department of ecology and the United States bureau of reclamation and published in a final programmatic environmental impact statement in March 2012;
     (((c))) (e) The interests of the state will be served by developing programs, in cooperation with the United States and the various water users in the basin, that increase the overall ability to manage basin waters in order to better satisfy both present and future needs for water in the Yakima river basin;
     (f) The interests of the state will also be served through coordination of federal and state policies and procedures in order to develop and implement projects within the framework of the integrated water resource management plan for the Yakima river basin. The pace of integrated plan implementation over the long term depends upon adequate funding and is subject to the availability of amounts appropriated for this purpose;
     (g) The October 2012 Framework for Implementation report commissioned by the bureau of reclamation and the department of ecology assumes the state of Washington will continue as a cost-share partner in funding many project elements, along with local governments and other parties;
     (h) The Framework for Implementation report estimates the following costs and benefits of the Yakima integrated plan:
     (i) Capital costs of developing and implementing the plan could total as much as five billion four hundred million dollars over thirty years. Operations and maintenance costs could reach nearly twelve million dollars each year, when all projects are fully operational;
     (ii) Based on a household willingness-to-pay survey, increasing fish populations will have an economic value of five billion to seven billion four hundred million dollars over the next one hundred years;
     (iii) Increasing the reliability of irrigation water during severe drought years will have an economic value of eight hundred million dollars over the next one hundred years; and
     (iv) Improving the municipal and domestic water supply to meet demand created by the existing population, economy, and anticipated growth will have an economic value of four hundred million dollars over the next one hundred years;
     (i) Funding the projects proposed in the Yakima integrated plan is projected to cost the state of Washington two billion five hundred million dollars between 2013 and 2043, which will compete directly with other state capital budget facility needs that address the state's basic, critical health, safety, environmental, and educational needs; and
     (j) Although significant benefits are anticipated to result from the implementation of the Yakima integrated plan, in light of its substantial costs and the state's limited capacity to absorb them within existing resources, there is a need to assess the public's willingness to pay an increase in public utility taxes for the Yakima integrated plan.
     (2) It is the purpose of this chapter, consistent with these findings, to:
     (a) Improve the ability of the state to work with the United States and various water users of the Yakima river basin in a program designed to satisfy both existing rights, and other presently unmet as well as future needs of the basin;
     (b) Establish legislative intent to promote timely and effective implementation of the integrated plan in the Yakima river basin, and to promote the aggressive pursuit of water supply solutions that provide concurrent benefits to both instream and out-of-stream uses in the Yakima river basin as rapidly as possible; and
     (c) Make subject to voter approval an authorization of two billion five hundred million dollars in nondebt-limit general obligation bonds dedicated to developing and implementing Yakima integrated plan projects and imposing a public utilities tax increase that will be used to pay the debt service on the bonds.
     (3) The provisions of this chapter apply only to waters of the Yakima river basin.

Sec. 2   RCW 90.38.010 and 1989 c 429 s 2 are each amended to read as follows:
     ((Unless the context clearly requires otherwise,)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of ecology.
     (2) "Integrated plan" means the Yakima river basin integrated water resource management plan developed through a consensus-based approach by a diverse work group of representatives of the Yakama Nation, federal, state, county, and city governments, environmental organizations, and irrigation districts and for which the final programmatic environmental impact statement was made available for review through public notice published in the federal register (77 FR 12076 (2012)).
     (3) "Net water savings" means the amount of water that through hydrological analysis is determined to be conserved and usable for other purposes without impairing existing water rights, reducing the ability to deliver water, or reducing the supply of water that otherwise would have been available to other water users.
     (((3))) (4) "Trust water right" means that portion of an existing water right, constituting net water savings, that is no longer required to be diverted for beneficial use due to the installation of a water conservation project that improves an existing system. The term "trust water right" also applies to any other water right acquired by the department under this chapter for management in the Yakima river basin trust water rights program.
     (((4))) (5) "Water conservation project" means any project funded to further the purposes of this chapter and that achieves physical or operational improvements of efficiency in existing systems for diversion, conveyance, or application of water under existing water rights.
     (6) "Yakima river basin water enhancement project" means a series of congressional enactments, originally initiated by the United States congress in 1979 under P.L. 96-162, with subsequent federal implementing legislation being passed in 1984 under section 109 of P.L. 98-381 to promote fish passage improvements, and in 1994 under P.L. 103-434, as amended by P.L. 105-62 in 1997 and P.L. 106-372 in 2000, to promote water conservation, water supply, habitat, and stream enhancement improvements in the Yakima river basin.

NEW SECTION.  Sec. 3   A new section is added to chapter 90.38 RCW to read as follows:
     The department is authorized to implement, consistent with this chapter, the integrated plan in the Yakima river basin, through a coordinated effort of affected federal, state, and local agencies and resources, to develop water supply solutions that provide concurrent benefits to both instream and out-of-stream uses, and to address a variety of water resource and ecosystem problems affecting fish passage, habitat functions, and agricultural, municipal, and domestic water supply in the Yakima river basin, consistent with the integrated plan.
     (1) Authorized department actions include, but are not limited to:
     (a) Accepting funds from any entity, public or private, as necessary to implement the objectives of this chapter;
     (b) Assessing, planning, and developing projects under the Yakima river basin integrated water resource management plan, or for any other action designed to provide access to new water supplies within the Yakima river basin, consistent with the integrated plan and including but not limited to: Enhanced water conservation and efficiency measures, water reallocation markets, in-basin surface and groundwater storage facilities, fish passage at existing in-basin reservoirs, structural and operational modifications to existing facilities, habitat protection and restoration, and general watershed enhancements as necessary to implement the objectives of this chapter and the integrated plan; and
     (c) Entering into contracts to ensure the effective delivery of water and to provide for the design and construction of facilities necessary to implement the objectives of the integrated plan and this chapter.
     (2) Consistent with the integrated plan, the goals and objectives of department actions authorized under this chapter include, but are not limited to:
     (a) Protection, mitigation, and enhancement of fish and wildlife through improved water management; improved instream flows; improved water quality; protection, creation, and enhancement of wetlands; improved fish passage, and by other appropriate means of habitat improvement, including the protection and enhancement of natural wetlands, floodplains, and groundwater storage systems;
     (b) Improved water availability and reliability, and improved efficiency of water delivery and use, to enhance basin water supplies for agricultural irrigation, municipal, commercial, industrial, domestic, and environmental water uses;
     (c) Establishment of more efficient water markets and more effective operational and structural changes to manage variability of water supplies and to prepare for the uncertainties of climate change, including but not limited to the facilitation of water banking, water right transfers, dry year options, the voluntary sale and lease of land, water, or water rights from any entity or individual willing to limit or forego water use on a temporary or permanent basis, and any other innovative water allocation tools used to maximize the utility of existing Yakima river basin water supplies, as long as the establishment and use of these tools is consistent with the integrated plan.
     (3) Water supplies secured through the development of new storage facilities or expansion of existing storage facilities made possible with funding from the Yakima integrated plan implementation account created in section 4 of this act, the Yakima integrated plan implementation taxable bond account created in section 5 of this act, and the Yakima integrated plan implementation recovery account created in section 6 of this act must be allocated for out-of-stream uses and to augment instream flows consistent with the Yakima river basin integrated water resource management plan. Water to be made available to benefit out-of-stream uses under this subsection, but not yet appropriated, must be temporarily available to augment instream flows to the extent that it does not impair existing water rights and is consistent with the integrated plan.

NEW SECTION.  Sec. 4   A new section is added to chapter 90.38 RCW to read as follows:
     (1) The Yakima integrated plan implementation account is created in the state treasury to receive the proceeds from the sale of nontaxable bonds authorized in section 13 of this act. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only as provided in this section. Interest earned by deposits in the account will be retained in the account.
     (2) Expenditures from the account created in this section may be used to assess, plan, and develop projects under the Yakima river basin integrated water resource management plan or for any other actions designed to provide access to new water supplies within the Yakima river basin for both instream and out-of-stream uses, consistent with the integrated plan and the authorities, goals, and objectives set forth in section 3 of this act.
     (3)(a) Funds may not be expended from the account for the construction of a new storage facility until the department evaluates the following:
     (i) Water uses to be served by the facility;
     (ii) The quantity of water necessary to meet the needs of those uses;
     (iii) The benefits and costs to the state of serving 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 the long-term water supply needs are able to be met using those alternatives.
     (b) The department may rely on studies and information developed through compliance with other state and federal 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 subsection, the department 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) In addition to subsection (3) of this section, the department may not expend funds from the account inconsistent with the provisions of sections 8 and 9 of this act.
     (5) For water supplies developed under the integrated plan to support future municipal and domestic water needs, the department shall give preference to other entities in managing water service contracts. Where the department determines that the management of such contracts by other entities is not feasible or suitable, the department may enter into water service contracts with applicants receiving water from the program to recover all or a portion of the cost of developing water supplies made possible with funding from the account created in this section. The department may deny an application if the applicant does not enter into a water service contract. Revenue collected from water service contracts must be deposited into the Yakima integrated plan implementation recovery account created in section 6 of this act. The department may adopt rules describing the methodology as to how charges will be established and direct costs recovered for water supply developed under the Yakima river basin integrated water resource management plan implementation program.

NEW SECTION.  Sec. 5   A new section is added to chapter 90.38 RCW to read as follows:
     (1) The Yakima integrated plan implementation taxable bond account is created in the state treasury to receive the proceeds from the sale of taxable bonds authorized in section 13 of this act. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only as provided in this section. Interest earned by deposits in the account will be retained in the account.
     (2) Expenditures from the account created in this section may be used to assess, plan, and develop projects under the Yakima river basin integrated water resource management plan or for any other actions designed to provide access to new water supplies within the Yakima river basin for both instream and out-of-stream uses, consistent with the integrated plan and the authorities, goals, and objectives set forth in section 3 of this act.
     (3)(a) Funds may not be expended from the account for the construction of a new storage facility until the department evaluates the following:
     (i) Water uses to be served by the facility;
     (ii) The quantity of water necessary to meet the needs of those uses;
     (iii) The benefits and costs to the state of serving 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 the long-term water supply needs are able to be met using those alternatives.
     (b) The department may rely on studies and information developed through compliance with other state and federal 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 subsection, the department 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) In addition to subsection (3) of this section, the department may not expend funds from the account inconsistent with the provisions of sections 8 and 9 of this act.
     (5) For water supplies developed under the integrated plan to support future municipal and domestic water needs, the department shall give preference to other entities in managing water service contracts. Where the department determines that the management of such contracts by other entities is not feasible or suitable, the department may enter into water service contracts with applicants receiving water from the program to recover all or a portion of the cost of developing water supplies made possible with funding from the account created in this section. The department may deny an application if the applicant does not enter into a water service contract. Revenue collected from water service contracts must be deposited into the Yakima integrated plan implementation recovery account created in section 6 of this act. The department may adopt rules describing the methodology as to how charges will be established and direct costs recovered for water supply developed under the Yakima river basin integrated water resource management plan implementation program.

NEW SECTION.  Sec. 6   A new section is added to chapter 90.38 RCW to read as follows:
     (1) The Yakima integrated plan implementation recovery account is created in the state treasury. All receipts from direct appropriations from the legislature, moneys directed to the account pursuant to this chapter, or moneys directed to the account from any other sources must be deposited in the account. The account is intended to fund projects using revenues from water service contracts as authorized in this chapter. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only as provided in this section. Interest earned by deposits in the account will be retained in the account.
     (2) Expenditures from the account created in this section may be used to assess, plan, and develop projects under the Yakima river basin integrated water resource management plan or for any other actions designed to provide access to new water supplies within the Yakima river basin for both instream and out-of-stream uses, consistent with the integrated plan and the authorities, goals, and objectives set forth in section 3 of this act.
     (3)(a) Funds may not be expended from the account for the construction of a new storage facility until the department evaluates the following:
     (i) Water uses to be served by the facility;
     (ii) The quantity of water necessary to meet the needs of those uses;
     (iii) The benefits and costs to the state of serving 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 the long-term water supply needs are able to be met using those alternatives.
     (b) The department may rely on studies and information developed through compliance with other state and federal 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 subsection, the department 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) In addition to subsection (3) of this section, the department may not expend funds from the account inconsistent with the provisions of sections 8 and 9 of this act.
     (5) For water supplies developed under the integrated plan to support future municipal and domestic water needs in the Yakima basin, the department shall give preference to other entities in managing water service contracts. Where the department determines that the management of such contracts by other entities is not feasible or suitable, the department may enter into water service contracts with applicants receiving water from the program to recover all or a portion of the cost of developing water supplies made possible with funding from the account created in this section. The department may deny an application if the applicant does not enter into a water service contract. Revenue collected from water service contracts must be deposited into the Yakima integrated plan implementation recovery account created in this section. The department may adopt rules describing the methodology as to how charges will be established and direct costs recovered for water supply developed under the Yakima river basin integrated water resource management plan implementation program.

NEW SECTION.  Sec. 7   A new section is added to chapter 90.38 RCW to read as follows:
     The Yakima integrated plan implementation revenue account is created in the state treasury. Deposits to the account must include the tax revenues directed to the account under RCW 82.16.020(3) and any other revenues directed to the account by the legislature. Expenditures from the account created in this section may be used to assess, plan, and develop projects under the integrated plan or for any other actions designed to provide access to new water supplies within the Yakima river basin for both instream and out-of-stream uses, consistent with the integrated plan and the authorities, goals, and objectives set forth in section 3 of this act including, but not limited to, payment of principal and interest on bonds issued under section 13 of this act. Moneys in the account must be transferred to the nondebt-limit general fund bond retirement account as required by section 16 of this act. Interest earned by deposits in the account will be retained in the account.

NEW SECTION.  Sec. 8   A new section is added to chapter 90.38 RCW to read as follows:
     (1) The department may not expend any funding on a capital project from the Yakima integrated plan implementation account created in section 4 of this act, the Yakima integrated plan implementation taxable bond account created in section 5 of this act, the Yakima integrated plan implementation recovery account created in section 6 of this act, or as any other part of the department's implementation of the integrated plan under section 3 of this act until the department has received at least an equal amount of funding for that project from federal or other nonstate sources.
     (2) The office of financial management must report to the house of representatives and senate capital budget committees as nonstate funding is received for projects that are related to the integrated plan.

NEW SECTION.  Sec. 9   A new section is added to chapter 90.38 RCW to read as follows:
     (1) The department may not expend any funding on a capital project from the Yakima integrated plan implementation account created in section 4 of this act, the Yakima integrated plan implementation taxable bond account created in section 5 of this act, the Yakima integrated plan implementation recovery account created in section 6 of this act, or as any other part of the department's implementation of the integrated plan under section 3 of this act in excess of the cost estimate for the project provided by the department under section 12 of this act.
     (2) Any costs in excess of the cost estimate for the project provided by the department under section 12 of this act must be borne by the residents of the Yakima river basin.

Sec. 10   RCW 90.38.900 and 1989 c 429 s 7 are each amended to read as follows:
     The policies and purposes of this chapter shall not be construed as replacing or amending the policies or the purposes for which funds available under chapter 43.83B ((or)), 43.99E, or 90.90 RCW may be used within or without the Yakima river basin.

Sec. 11   RCW 90.38.902 and 1989 c 429 s 9 are each amended to read as follows:
     (1) Nothing in this chapter shall authorize the impairment of, or operate to impair, any existing water rights.
     (2) Nothing in this chapter may be construed to limit, impair, waive, abrogate, or diminish:
     (a) Any treaty or other rights of the Yakama Nation;
     (b) Any powers, rights, or authorities conferred upon irrigation districts under existing law;
     (c) Any rights or jurisdictions of the United States, the state of Washington, or other person or entity over waters in the Yakima river basin.

NEW SECTION.  Sec. 12   A new section is added to chapter 90.38 RCW to read as follows:
     (1) By December 1, 2015, and by December 1st of every odd-numbered year thereafter, and in compliance with RCW 43.01.036, the department, in consultation with the United States bureau of reclamation, the Yakama Nation, Yakima river basin local governments, and key basin stakeholders, shall provide a Yakima river basin integrated water resource management plan implementation status report to the legislature and to the governor.
     (2) The report must include, at a minimum:
     (a) A description of measures that have been funded and implemented in the Yakima river basin and their effectiveness in meeting the objectives of this act;
     (b) A project funding list that represents the state's percentage cost share to implement the integrated plan measures for the current biennium;
     (c) Cost estimates for individual projects in subsequent biennia of sufficient detail to implement the intent of section 9 of this act;
     (d) A description of progress toward concurrent realization of the integrated plan's fish passage, watershed enhancement, and water supply goals; and
     (e) An annual summary of all associated costs to develop and implement projects within the framework of the integrated plan for the Yakima river basin.
     (3) This section expires December 31, 2045.

NEW SECTION.  Sec. 13   A new section is added to chapter 90.38 RCW to read as follows:
     For the purpose of providing funds for the department's implementation of the integrated plan in the Yakima river basin under section 3 of this act, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of two billion five hundred million dollars, or as much thereof as may be required, to finance the projects and all costs incidental thereto. Bonds authorized in this section may be sold at such price as the state finance committee shall determine. No bonds authorized in this section may be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds.

NEW SECTION.  Sec. 14   A new section is added to chapter 43.99G RCW to read as follows:
     It is the intent of the legislature that the proceeds of the new bonds authorized in section 13 of this act will be appropriated in phases over fifteen biennia, beginning with the 2013-2015 biennium. This is not intended to limit the legislature's ability to appropriate bond proceeds if the full amount authorized in section 13 of this act has not been appropriated after fifteen biennia. The authorization to issue bonds contained in section 13 of this act does not expire until the full authorization has been issued and appropriated.

NEW SECTION.  Sec. 15   A new section is added to chapter 43.99G RCW to read as follows:
     The proceeds from the sale of the bonds authorized in section 13 of this act shall be deposited in the Yakima integrated plan implementation taxable bond account created in section 5 of this act. If the state finance committee determines that a portion of the amount authorized in section 13 of this act may be issued as nontaxable bonds in compliance with federal internal revenue service rules and regulations pertaining to the use of nontaxable bond proceeds, the proceeds of such nontaxable bonds shall be transferred to the Yakima integrated plan implementation account created in section 4 of this act in lieu of any deposit otherwise provided by this section. The state treasurer shall submit written notice to the director of financial management if it is determined that any such transfer to the Yakima integrated plan implementation account is necessary. Moneys in the account may be spent only after appropriation. The proceeds shall be used exclusively for the purposes specified in section 13 of this act and for the payment of expenses incurred in the issuance and sale of the bonds. These proceeds shall be administered by the office of financial management, subject to legislative appropriation.

NEW SECTION.  Sec. 16   A new section is added to chapter 43.99G RCW to read as follows:
     (1) The nondebt-limit general fund bond retirement account created in RCW 43.99M.030 shall be used for the payment of the principal of and interest on the bonds authorized in section 13 of this act.
     (2)(a) The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount needed in the ensuing twelve months to meet the bond retirement and interest requirements. On each date on which any interest or principal and interest payment is due, the state treasurer shall withdraw from any tax revenues placed in the Yakima integrated plan implementation revenue account created in section 7 of this act and deposit in the nondebt-limit general fund bond retirement account an amount equal to the amount certified by the state finance committee to be due on the payment date.
     (b) If the amount of tax revenues on deposit in the Yakima integrated plan implementation revenue account is insufficient to make the bond payment amount due, the state treasurer shall withdraw from any general state revenues received in the state treasury and deposit in the nondebt-limit general fund bond retirement account the additional amount required to provide sufficient funds for the bond payment amount then due.
     (3) Bonds issued under section 13 of this act shall state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due.
     (4) The owner and holder of each of the bonds or the trustee for the owner and holder of any of the bonds may by mandamus or other appropriate proceeding require the transfer and payment of funds as directed in this section.

NEW SECTION.  Sec. 17   A new section is added to chapter 43.99G RCW to read as follows:
     The legislature may provide additional means for raising moneys for the payment of the principal of and interest on the bonds authorized in section 13 of this act, and section 16 of this act shall not be deemed to provide an exclusive method for the payment.

NEW SECTION.  Sec. 18   A new section is added to chapter 43.99G RCW to read as follows:
     The bonds authorized in section 13 of this act shall be a legal investment for all state funds or funds under state control and for all funds of any other public body.

Sec. 19   RCW 82.16.020 and 2011 1st sp.s. c 48 s 7033 are each amended to read as follows:
     (1) There is levied and there shall be collected from every person a tax for the act or privilege of engaging within this state in any one or more of the businesses herein mentioned. The tax shall be equal to the gross income of the business, multiplied by the rate set out after the business, as follows:
     (a) Express, sewerage collection, and telegraph businesses: Three and six-tenths percent;
     (b) Light and power business: Three and sixty-two one-hundredths percent;
     (c) Gas distribution business: Three and six-tenths percent;
     (d) Urban transportation business: Six-tenths of one percent;
     (e) Vessels under sixty-five feet in length, except tugboats, operating upon the waters within the state: Six-tenths of one percent;
     (f) Motor transportation, railroad, railroad car, and tugboat businesses, and all public service businesses other than ones mentioned above: One and eight-tenths of one percent;
     (g) Water distribution business: Four and seven-tenths percent.
     (2) An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section.
     (3)(a) At the beginning of every other state fiscal year, and except as provided in (b) of this subsection, the combined tax rate under subsections (1)(g) and (2) of this section for a water distribution business shall be increased by fifteen percent. The biennial rate adjustment under this subsection (3) is compounded with any previous rate adjustment under this subsection (3). The rate adjustment occurs every other July 1st beginning July 1, 2016, and ending July 1, 2050.
     (b) The biennial rate increase is twelve percent beginning with the July 1, 2026, adjustment.
     (c) Starting July 1, 2052, the tax rate for a water distribution business is equal to the combined rate under subsections (1)(g) and (2) of this section.
     (d) Revenue derived from the rate increase under this subsection (3) in excess of the combined tax rate under subsections (1)(g) and (2) of this section for a water distribution business must be deposited into the Yakima integrated plan implementation revenue account created in section 7 of this act.
     (4)(a) Twenty percent of the moneys collected under subsection (1) of this section on water distribution businesses and sixty percent of the moneys collected under subsection (1) of this section on sewerage collection businesses shall be deposited in the public works assistance account created in RCW 43.155.050: PROVIDED, That during the fiscal year 2011, twenty percent of the moneys collected under subsection (1) of this section on water distribution businesses and sixty percent of the moneys collected under subsection (1) of this section on sewerage collection businesses must be deposited in the general fund for general purpose expenditures.
     (b) This subsection does not apply to taxes collected under subsection (3) of this section.

Sec. 20   RCW 43.84.092 and 2013 c 251 s 3 and 2013 c 96 s 3 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 aeronautics account, the aircraft search and rescue account, the Alaskan Way viaduct replacement project account, the budget stabilization account, the capital vessel replacement account, 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 cleanup settlement account, the Columbia river basin water supply development account, the Columbia river basin taxable bond water supply development account, the Columbia river basin water supply revenue recovery account, the common school construction fund, the county arterial preservation account, the county criminal justice assistance account, the deferred compensation administrative account, the deferred compensation principal account, the department of licensing services 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 Interstate 405 express toll lanes operations account, the education construction fund, the education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety fund, the high occupancy toll lanes operations account, the hospital safety net assessment fund, 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 marine resources stewardship trust account, the medical aid account, the mobile home park relocation fund, the motor vehicle fund, the motorcycle safety education account, the multimodal transportation account, the municipal criminal justice assistance account, the natural resources deposit account, the oyster reserve land account, the pension funding stabilization 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 Puget Sound capital construction account, the Puget Sound ferry operations account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural mobility grant program account, the rural Washington loan fund, the site closure account, the skilled nursing facility safety net trust fund, the small city pavement and sidewalk account, the special category C 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 state patrol highway account, the state route number 520 civil penalties account, the state route number 520 corridor account, the state wildlife account, 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 toll facility bond retirement 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, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' 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 economic development commission 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 administration account, the water pollution control revolving fund, ((and)) the Western Washington University capital projects account, the Yakima integrated plan implementation account, the Yakima integrated plan implementation recovery account, the Yakima integrated plan implementation revenue account, and the Yakima integrated plan implementation taxable bond 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, the state university permanent fund, and the state reclamation revolving account shall be allocated to their respective beneficiary accounts.
     (b) Any state agency that has independent authority over accounts or funds not statutorily required to be held in the state treasury that deposits funds into a fund or account in the state treasury pursuant to an agreement with the office of the state treasurer shall receive its proportionate share of earnings based upon each account's or fund's average daily balance for the period.
     (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.

Sec. 21   RCW 43.84.092 and 2013 c 251 s 4 and 2013 c 96 s 4 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 aeronautics account, the aircraft search and rescue account, the Alaskan Way viaduct replacement project account, the budget stabilization account, the capital vessel replacement account, 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 cleanup settlement account, the Columbia river basin water supply development account, the Columbia river basin taxable bond water supply development account, the Columbia river basin water supply revenue recovery account, the Columbia river crossing project account, the common school construction fund, the county arterial preservation account, the county criminal justice assistance account, the deferred compensation administrative account, the deferred compensation principal account, the department of licensing services 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 Interstate 405 express toll lanes operations account, the education construction fund, the education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety fund, the high occupancy toll lanes operations account, the hospital safety net assessment fund, 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 marine resources stewardship trust account, the medical aid account, the mobile home park relocation fund, the motor vehicle fund, the motorcycle safety education account, the multimodal transportation account, the municipal criminal justice assistance account, the natural resources deposit account, the oyster reserve land account, the pension funding stabilization 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 Puget Sound capital construction account, the Puget Sound ferry operations account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural mobility grant program account, the rural Washington loan fund, the site closure account, the skilled nursing facility safety net trust fund, the small city pavement and sidewalk account, the special category C 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 state patrol highway account, the state route number 520 civil penalties account, the state route number 520 corridor account, the state wildlife account, 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 toll facility bond retirement 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, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' 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 economic development commission 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 administration account, the water pollution control revolving fund, ((and)) the Western Washington University capital projects account, the Yakima integrated plan implementation account, the Yakima integrated plan implementation recovery account, the Yakima integrated plan implementation revenue account, and the Yakima integrated plan implementation taxable bond 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, the state university permanent fund, and the state reclamation revolving account shall be allocated to their respective beneficiary accounts.
     (b) Any state agency that has independent authority over accounts or funds not statutorily required to be held in the state treasury that deposits funds into a fund or account in the state treasury pursuant to an agreement with the office of the state treasurer shall receive its proportionate share of earnings based upon each account's or fund's average daily balance for the period.
     (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. 22   Section 20 of this act expires if the requirements set out in section 7, chapter 36, Laws of 2012 are met.

NEW SECTION.  Sec. 23   Section 21 of this act takes effect if the requirements set out in section 7, chapter 36, Laws of 2012 are met.

NEW SECTION.  Sec. 24   The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with Article II, section 1 and Article VIII, section 3 of the state Constitution and the laws adopted to facilitate its operation."