1414-S AMH REYK H2714.3

SHB 1414  - H AMD579
     By Representative Reykdal

NOT CONSIDERED

     Strike everything after the enacting clause and insert the following:

"PART I: INTENT

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 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; and
     (g) 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 identify and evaluate potential new state and local revenue sources to assist in paying the state and local share of implementation costs.
     (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; and
     (b) Establish legislative intent, conditioned by section 11 of this act, to promote timely and effective implementation of the integrated plan in the Yakima river basin, and to promote solutions that provide concurrent benefits to both instream and out-of-stream uses in the Yakima river basin as rapidly as possible.
     (3) The provisions of this chapter apply only to waters of the Yakima river basin.

PART II: YAKIMA RIVER BASIN INTEGRATED PLAN IMPLEMENTATION

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. 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 tax exempt bonds. 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) 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. 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 taxable bonds. 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) 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) 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.

Sec. 7   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. 8   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.

PART III: OVERSIGHT AND STUDIES

NEW SECTION.  Sec. 9   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, the office of the state treasurer, 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) A description of progress toward concurrent realization of the integrated plan's fish passage, watershed enhancement, and water supply goals; and
     (d) 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. 10   (1) The state of Washington water research center must prepare a separate benefit-cost analysis for each of the projects, listed in subsection (7) of this section, that are proposed in the 2012 Yakima river basin integrated water resources management plan (Yakima integrated plan).
     (2) To the greatest extent possible, the center must use information from existing studies, supplemented by primary research, to measure and evaluate each project's benefits and costs.
     (3) The center must measure and report the economic benefits of each project on a disaggregated basis, so that it is clear the extent to which an individual project is expected to result in increases in fish populations, increases in the reliability of irrigation water during severe drought years, and improvements in municipal and domestic water supply.
     (4) The center may enter into agreements with other state universities and with private consultants as needed to accomplish the scope of work.
     (5) The center may consult, as necessary, with the department of ecology and the Yakima river basin water enhancement project work group.
     (6) No more than twelve percent of any appropriations provided for the implementation of this section may be retained for administrative overhead expenses.
     (7) The center must submit, consistent with RCW 43.01.036, the benefit-cost analyses, findings, and any recommendations on the following projects by December 15, 2014:
     (a) Tributary/mainstem enhancement;
     (b) Box Canyon creek;
     (c) Subordination of power generation (Roza and Chandler);
     (d) Aquifer storage and recovery projects;
     (e) Agricultural conservation;
     (f) Municipal conservation;
     (g) Water bank exchange programs;
     (h) Cle Elum reservoir;
     (i) Keechelus, Kachess, Tieton reservoirs;
     (j) Keechelus to Kachess pipeline;
     (k) Wymer reservoir;
     (l) Bumping reservoir enlargement.
     (8) This section expires July 1, 2015.

NEW SECTION.  Sec. 11   A new section is added to chapter 90.38 RCW to read as follows:
     (1)(a) It is the intent of the legislature for the state to pay its fair share of the cost to implement the integrated plan. Consistent with this intent, at least one-half of all costs associated with the implementation of section 3 of this act and the integrated plan must be funded through federal, private, and other nonstate sources, including a significant contribution of funding from local project beneficiaries.
     (b) The state's continuing support for the integrated plan shall be formally reevaluated independently by the governor and the legislature if the actual funding provided through nonstate sources is less than one-half of all costs and if funding from local project beneficiaries does not comprise a significant portion of the nonstate sources.
     (2) The office of the state treasurer shall deliver, consistent with the intent of this section and in consultation with the department of ecology, a cost estimate and financing plan that addresses the total estimated cost to implement the integrated plan and analyzes various financing options.
     (3) The cost estimate and financing plan required by this section must, at a minimum:
     (a) Include a description of state expenditures as of the effective date of this section incurred implementing the integrated plan and proposed state expenditures in the 2015-2017 biennium and beyond with linked proposed financing sources for each project;
     (b) Identify and evaluate potential new state financing sources to pay for the state's contribution towards the overall costs of the Yakima integrated plan's implementation;
     (c) Identify and evaluate potential new local financing sources to pay for a significant local contribution towards the overall costs of the Yakima integrated plan's implementation;
     (d) Consider the viability, and evaluate the pros and cons, of various financing mechanisms such as revenue bonds, general obligation bonds, and other similar financing models;
     (e) Identify past, current, and anticipated future costs that will be, or are anticipated to be, paid by nonstate sources such as federal sources, private sources, and local sources;
     (f) Consider how cost overruns of projects associated with the integrated plan could affect long-term financing of the overall integrated plan and provide options for how cost overruns can be addressed.
     (4) The office of the state treasurer may, in the sole discretion of the state treasurer, contract with state universities or private consultants for any part of the cost estimate and financing plan required under this section.
     (5) The initial cost estimate and financing plan required by this section must be provided to the governor and the legislature, consistent with RCW 43.01.036, by no later than December 15, 2014, for consideration in preparing the 2015-2017 biennial budget and future budgets. The cost estimate and financing plan must be updated by September 1st of each successive even-numbered year.

PART IV: ACCOUNT INTEREST

Sec. 12   RCW 43.84.092 and 2013 2nd sp.s. c 1 s 15 are each 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 brownfield redevelopment trust fund 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, 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. 13   RCW 43.84.092 and 2013 2nd sp.s. c 1 s 16 are each 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 brownfield redevelopment trust fund 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, 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.

PART V: TEANAWAY COMMUNITY FOREST TRUST

NEW SECTION.  Sec. 14   A new section is added to chapter 79.155 RCW to read as follows:
     (1) The department is authorized to use funds specifically appropriated by the legislature to acquire lands in the Teanaway river valley and Yakima river basin and hold those lands in a discrete community forest trust status if those lands were acquired consistent with the Yakima river integrated water resource management plan as that document is identified in the definition of "integrated plan" provided in RCW 90.38.010. These lands may collectively be referred to as the Teanaway community forest trust.
     (2) Except as otherwise provided in this chapter, the lands in the Teanaway community forest trust must be managed consistent with the requirements of this chapter and section 3 of this act, and the following objectives:
     (a) Protect and enhance the water supply and the watershed;
     (b) Maintain working lands for forestry and grazing while protecting key watershed functions and aquatic habitat;
     (c) Maintain and, where possible, expand recreational opportunities consistent with watershed protection, such as hiking, fishing, hunting, horseback riding, camping, birding, and snowmobiling;
     (d) Conserve and restore vital habitat for fish and wildlife, including steelhead, spring Chinook, bull trout, deer, elk, large predators, and spotted owls; and
     (e) Support a strong community partnership, in which the Yakama Nation, residents, business owners, local governments, conservation groups, and others could provide advice about ongoing land management.
     (3) The department shall, jointly with the department of fish and wildlife, develop a Teanaway community forest postacquisition management plan that is informed by input from the department of ecology, the Yakama Nation, Yakima integrated plan stakeholders, and the local community. These entities, and any others identified by the commissioner, comprise the Teanaway community forest trust advisory committee. The department and the department of fish and wildlife shall work in good faith to assure that the postacquisition management plan contributes to the implementation of the Yakima integrated plan.
     (4) As part of its management of the Teanaway community forest trust, the department must grant a habitat restoration and working lands easement to the department of fish and wildlife that is consistent with the management objectives provided in this section. The easement must be executed prior to, or concurrent with, the acquisition of the properties comprising the Teanaway community forest trust. The contents of the easement must be agreed to by both the department and the department of fish and wildlife.

Sec. 15   RCW 79.155.020 and 2011 c 216 s 2 are each amended to read as follows:
     (1) If deemed practicable by the commissioner or specifically directed by the legislature, the department is authorized to create and manage, consistent with the provisions of this chapter, a discrete category of natural resource lands in a nonfiduciary community forest land trust. The department is authorized to assemble, hold title to, and manage directly or through mutual agreement with other landowners land suitable for sustainable forest management, to be held in the community forest trust.
     (2) All land held in the community forest trust must be held by the department and actively managed, consistent with a community working forest management plan developed under RCW 79.155.080, to:
     (a) Except for lands identified as part of the Teanaway community forest trust in section 14 of this act, generate financial support for the management of the community forest trust; and ((to))
     (b) Advance and sustain the working forest conservation objectives established in the management plan.

Sec. 16   RCW 79.155.030 and 2011 c 216 s 3 are each amended to read as follows:
     (1) Except for lands identified as part of the Teanaway community forest trust in section 14 of this act, the department must identify lands for inclusion into the community forest trust, and manage the resulting community forest trust lands, in furtherance of goals that must be identified by the department prior to the creation of a community forest.
     (2) In addition to any goals for a community forest identified by the department, the community forest trust program must satisfy the following minimum program management principles:
     (a) Protecting in perpetuity working forest lands that are at a significant risk of conversion to another land use;
     (b) Securing financial and social viability through sound management plans and objectives that are consistent with the values of the local community;
     (c) Maintaining the land in a working status, through traditional forestry, management of specialized forest products harvest consistent with chapter 76.48 RCW, land leases, renewable energy opportunities, ecosystem services such as clean water protection or carbon storage, and other sources of revenue appropriate for the community forest to generate;
     (d) Except for lands identified as part of the Teanaway community forest trust in section 14 of this act, generating revenue at levels that are, at a minimum, capable of reimbursing the department for management costs and providing for some reinvestment into the management objectives of the community forest;
     (e) Providing for ongoing, sustainable public recreational access, local timber jobs, clean air and water, carbon storage, fish and wildlife habitat, and open space in a manner that is compatible with management plans and objectives adopted for the community forest; and
     (f) Providing educational opportunities for local communities regarding the benefits that working forests provide to Washington's economy, communities, environment, and quality of life.

Sec. 17   RCW 79.155.040 and 2011 c 216 s 4 are each amended to read as follows:
     (1)(a) Except as limited by RCW 79.155.070, the department is authorized to acquire by purchase, gift, donation, grant, transfer, or other means other than eminent domain fee interest or a partial interest, including conservation easements, in lands or other real property suitable for management as part of the community forest trust and that are appropriate to further the goals of the community forest trust.
     (b) The fair market value of any real property, and the associated valuable materials, of any land transferred into the community forest trust from state lands must be provided to the beneficiaries of the ((transferee [transferor])) transferor trust or used for the furtherance of the ((transferee [transferor])) transferor trust.
     (2) The department is authorized to receive funds for purposes of establishing the community forest trust from grants, gifts, bequests, or loans, whether public or private, as well as from legislative appropriation.
     (3) Except for lands identified as part of the Teanaway community forest trust in section 14 of this act, all acquisitions of real property for the community forest trust must be approved by the board.

Sec. 18   RCW 79.155.060 and 2011 c 216 s 6 are each amended to read as follows:
     (1) Except for lands identified as part of the Teanaway community forest trust in section 14 of this act, the department shall, if it establishes a community forest trust program, submit biennially to the office of financial management and the appropriate committees of the legislature a prioritized list that identifies nominated parcels of state land or state forest land that are suitable for transfer into the community forest trust, where such a transfer is also in the best interest of the respective trust. The department shall solicit and consider input from the board on a draft list before submitting a final prioritized list.
     (2) The list of nominated parcels must reflect consideration of local nominations and the priorities outlined in RCW 79.155.050 and be delivered to the required recipients by November 1st of each even-numbered year.

Sec. 19   RCW 79.155.070 and 2011 c 216 s 7 are each amended to read as follows:
     (1) Except for lands identified as part of the Teanaway community forest trust in section 14 of this act, the department must, prior to using the authority provided in RCW 79.155.040 to acquire land for inclusion in a community forest, obtain from the local community a commitment to preserving the land as a working forest.
     (2) Following initial agreement between potential local community partners and the department regarding management and revenue production objectives for the lands in question, the local commitment to preserving the land as a working forest must be demonstrated by the county, city, or other local entity providing a financial contribution to the specific community forest of at least fifty percent of the difference between the parcel's appraised fair market value and the parcel's timber and forest land value. The local community contribution may be provided through any means deemed acceptable by the department and the local contributor, including:
     (a) Traditional financing or bonding;
     (b) The purchase of conservation easements; or
     (c) The purchase or transfer of development rights.
     (3) The local financial contribution must be deposited into the park land trust revolving fund created in RCW 43.30.385 and used solely for acquisition of the community forest trust land parcel or parcels for which it is intended.

Sec. 20   RCW 79.155.080 and 2011 c 216 s 8 are each amended to read as follows:
     (1) All lands transferred into community forest trust status must be managed in accordance with a postacquisition management plan developed by the department consistent with this section and, if relevant, section 14 of this act.
     (2) After exercising the authority provided in RCW 79.155.040 or section 14 of this act to acquire land for inclusion in a community forest, the department must establish a local advisory committee in cooperation with any interested and affected local government.
     (3) The department must use the local advisory committee as a source of advice and comment on a postacquisition management plan. Comments and advice should, at a minimum, include plans for how the department will maintain the land's working status and economic viability objectives through revenue-generating activities that, except for lands identified as part of the Teanaway community forest trust in section 14 of this act, are sufficient to generate ongoing revenue at a level that reimburses administrative costs, while satisfying, or contributing to, identified community conservation and recreation objectives.
     (4)(a) If, after a good faith effort by all parties, the department and the local advisory committee fail to reach a consensus on a conceptual postacquisition management plan for the parcel in question, the department may either adopt a management plan informed by the community or, except for lands identified as part of the Teanaway community forest trust in section 14 of this act, recommend to the board that the parcel be divested through the existing authority of the department and the board. If the parcel is divested, then, except as otherwise provided in this subsection, proceeds must return to the park land trust revolving fund created in RCW 43.30.385.
     (b) Prior to depositing the proceeds of a land divestiture under this subsection to the park land trust revolving fund, the department must first reimburse local entities that have made financial contributions to the parcel's acquisition as provided in RCW 79.155.070(2). However, local entities are only eligible for reimbursement upon divestiture under this subsection if the board determines that:
     (i) The subsequent parcel use is likely to remain a working forest, the department secures full fair market value for the parcel, and the local entity's contribution was not provided by a state or federal grant; or
     (ii) The funds used as part of the local contribution were originally provided through a grant that requires, as a condition of the grant, the repayment of granted dollars if the purposes of the grant are not or cannot be fulfilled and the decision to divest the land creates an inability for the purposes of the grant to be fulfilled.

Sec. 21   RCW 79.155.100 and 2011 c 216 s 10 are each amended to read as follows:
     (1) By September 1, 2014, and periodically, but at least once every ten years thereafter, the department shall provide to the board a review and update of the community forest trust program. The review must include updates on the performance of the community forest trust statewide and notification of any community forest trust parcels not performing according to their management plan.
     (2) Except for lands identified as part of the Teanaway community forest trust in section 14 of this act, the department is authorized to, consistent with this chapter, recommend to the board action to divest itself of nonperforming community forest trust parcels using existing policies and mechanisms available to the department and the board.

Sec. 22   RCW 79.155.130 and 2011 c 216 s 18 are each amended to read as follows:
     The authorities granted under this title ((79 RCW)) for the management of state lands apply to the community forest trust to the extent consistent with the purposes of this chapter ((216, Laws of 2011)) and, for lands identified as part of the Teanaway community forest trust in section 14 of this act, section 3 of this act. The department may develop management procedures deemed necessary by the department to implement this chapter ((216, Laws of 2011)), including any special management procedures required to implement section 14 of this act.

NEW SECTION.  Sec. 23   (1) The department of natural resources must propose to the board of natural resources a schedule for the transfer of existing department-managed lands in T20N R16W, T21N R15W, and T21N R16W into the Teanaway community forest trust created in section 14 of this act utilizing the trust land transfer program.
     (2) This section expires July 1, 2016.

NEW SECTION.  Sec. 24   A new section is added to chapter 79.155 RCW to read as follows:
     (1) The state treasurer, on behalf of the department, must distribute to counties for all lands acquired from private landowners for the purposes of establishing the Teanaway community forest trust, as identified in section 14 of this act, an amount in lieu of real property taxes equal to the amount of tax, other than taxes levied for any state purpose, that would be due if the land were taxable as open space land under chapter 84.34 RCW, plus an additional amount equal to the amount of weed control assessment that would be due if the lands were privately owned.
     (2) The county assessor and county legislative authority shall assist in determining the appropriate calculation of the amount of tax that would be due. The county shall distribute the amount received under this section in lieu of real property taxes to all property taxing districts, except the state, in appropriate tax code areas the same way it would distribute local property taxes from private property. The county shall distribute the amount received under this section for weed control to the appropriate weed district.

Sec. 25   RCW 84.33.140 and 2012 c 170 s 1 are each amended to read as follows:
     (1) When land has been designated as forest land under RCW 84.33.130, a notation of the designation must be made each year upon the assessment and tax rolls. A copy of the notice of approval together with the legal description or assessor's parcel numbers for the land must, at the expense of the applicant, be filed by the assessor in the same manner as deeds are recorded.
     (2) In preparing the assessment roll as of January 1, 2002, for taxes payable in 2003 and each January 1st thereafter, the assessor must list each parcel of designated forest land at a value with respect to the grade and class provided in this subsection and adjusted as provided in subsection (3) of this section. The assessor must compute the assessed value of the land using the same assessment ratio applied generally in computing the assessed value of other property in the county. Values for the several grades of bare forest land are as follows:

LAND
GRADE		OPERABILITY
CLASS		VALUES
PER ACRE
 1$234
12 229
 3 217
 4 157
 1 198
22 190
 3 183
 4 132
 1 154
32 149
 3 148
 4 113
 1 117
42 114
 3 113
 4 86
 1 85
52 78
 3 77
 4 52
 1 43
62 39
 3 39
 4 37
 1 21
72 21
 3 20
 4 20
8  1


     (3) On or before December 31, 2001, the department must adjust by rule under chapter 34.05 RCW, the forest land values contained in subsection (2) of this section in accordance with this subsection, and must certify the adjusted values to the assessor who will use these values in preparing the assessment roll as of January 1, 2002. For the adjustment to be made on or before December 31, 2001, for use in the 2002 assessment year, the department must:
     (a) Divide the aggregate value of all timber harvested within the state between July 1, 1996, and June 30, 2001, by the aggregate harvest volume for the same period, as determined from the harvester excise tax returns filed with the department under RCW 84.33.074; and
     (b) Divide the aggregate value of all timber harvested within the state between July 1, 1995, and June 30, 2000, by the aggregate harvest volume for the same period, as determined from the harvester excise tax returns filed with the department under RCW 84.33.074; and
     (c) Adjust the forest land values contained in subsection (2) of this section by a percentage equal to one-half of the percentage change in the average values of harvested timber reflected by comparing the resultant values calculated under (a) and (b) of this subsection.
     (4) For the adjustments to be made on or before December 31, 2002, and each succeeding year thereafter, the same procedure described in subsection (3) of this section must be followed using harvester excise tax returns filed under RCW 84.33.074. However, this adjustment must be made to the prior year's adjusted value, and the five-year periods for calculating average harvested timber values must be successively one year more recent.
     (5) Land graded, assessed, and valued as forest land must continue to be so graded, assessed, and valued until removal of designation by the assessor upon the occurrence of any of the following:
     (a) Receipt of notice from the owner to remove the designation;
     (b) Sale or transfer to an ownership making the land exempt from ad valorem taxation;
     (c) Sale or transfer of all or a portion of the land to a new owner, unless the new owner has signed a notice of forest land designation continuance, except transfer to an owner who is an heir or devisee of a deceased owner, does not, by itself, result in removal of designation. The signed notice of continuance must be attached to the real estate excise tax affidavit provided for in RCW 82.45.150. The notice of continuance must be on a form prepared by the department. If the notice of continuance is not signed by the new owner and attached to the real estate excise tax affidavit, all compensating taxes calculated under subsection (11) of this section are due and payable by the seller or transferor at time of sale. The auditor may not accept an instrument of conveyance regarding designated forest land for filing or recording unless the new owner has signed the notice of continuance or the compensating tax has been paid, as evidenced by the real estate excise tax stamp affixed thereto by the treasurer. The seller, transferor, or new owner may appeal the new assessed valuation calculated under subsection (11) of this section to the county board of equalization in accordance with the provisions of RCW 84.40.038. Jurisdiction is hereby conferred on the county board of equalization to hear these appeals;
     (d) Determination by the assessor, after giving the owner written notice and an opportunity to be heard, that:
     (i) The land is no longer primarily devoted to and used for growing and harvesting timber. However, land may not be removed from designation if a governmental agency, organization, or other recipient identified in subsection (13) or (14) of this section as exempt from the payment of compensating tax has manifested its intent in writing or by other official action to acquire a property interest in the designated forest land by means of a transaction that qualifies for an exemption under subsection (13) or (14) of this section. The governmental agency, organization, or recipient must annually provide the assessor of the county in which the land is located reasonable evidence in writing of the intent to acquire the designated land as long as the intent continues or within sixty days of a request by the assessor. The assessor may not request this evidence more than once in a calendar year;
     (ii) The owner has failed to comply with a final administrative or judicial order with respect to a violation of the restocking, forest management, fire protection, insect and disease control, and forest debris provisions of Title 76 RCW or any applicable rules under Title 76 RCW; or
     (iii) Restocking has not occurred to the extent or within the time specified in the application for designation of such land.
     (6) Land may not be removed from designation if there is a governmental restriction that prohibits, in whole or in part, the owner from harvesting timber from the owner's designated forest land. If only a portion of the parcel is impacted by governmental restrictions of this nature, the restrictions cannot be used as a basis to remove the remainder of the forest land from designation under this chapter. For the purposes of this section, "governmental restrictions" includes: (a) Any law, regulation, rule, ordinance, program, or other action adopted or taken by a federal, state, county, city, or other governmental entity; or (b) the land's zoning or its presence within an urban growth area designated under RCW 36.70A.110.
     (7) The assessor has the option of requiring an owner of forest land to file a timber management plan with the assessor upon the occurrence of one of the following:
     (a) An application for designation as forest land is submitted; or
     (b) Designated forest land is sold or transferred and a notice of continuance, described in subsection (5)(c) of this section, is signed.
     (8) If land is removed from designation because of any of the circumstances listed in subsection (5)(a) through (c) of this section, the removal applies only to the land affected. If land is removed from designation because of subsection (5)(d) of this section, the removal applies only to the actual area of land that is no longer primarily devoted to the growing and harvesting of timber, without regard to any other land that may have been included in the application and approved for designation, as long as the remaining designated forest land meets the definition of forest land contained in RCW 84.33.035.
     (9) Within thirty days after the removal of designation as forest land, the assessor must notify the owner in writing, setting forth the reasons for the removal. The seller, transferor, or owner may appeal the removal to the county board of equalization in accordance with the provisions of RCW 84.40.038.
     (10) Unless the removal is reversed on appeal a copy of the notice of removal with a notation of the action, if any, upon appeal, together with the legal description or assessor's parcel numbers for the land removed from designation must, at the expense of the applicant, be filed by the assessor in the same manner as deeds are recorded and a notation of removal from designation must immediately be made upon the assessment and tax rolls. The assessor must revalue the land to be removed with reference to its true and fair value as of January 1st of the year of removal from designation. Both the assessed value before and after the removal of designation must be listed. Taxes based on the value of the land as forest land are assessed and payable up until the date of removal and taxes based on the true and fair value of the land are assessed and payable from the date of removal from designation.
     (11) Except as provided in subsection (5)(c), (13), or (14) of this section, a compensating tax is imposed on land removed from designation as forest land. The compensating tax is due and payable to the treasurer thirty days after the owner is notified of the amount of this tax. As soon as possible after the land is removed from designation, the assessor must compute the amount of compensating tax and mail a notice to the owner of the amount of compensating tax owed and the date on which payment of this tax is due. The amount of compensating tax is equal to the difference between the amount of tax last levied on the land as designated forest land and an amount equal to the new assessed value of the land multiplied by the dollar rate of the last levy extended against the land, multiplied by a number, in no event greater than nine, equal to the number of years for which the land was designated as forest land, plus compensating taxes on the land at forest land values up until the date of removal and the prorated taxes on the land at true and fair value from the date of removal to the end of the current tax year.
     (12) Compensating tax, together with applicable interest thereon, becomes a lien on the land, which attaches at the time the land is removed from designation as forest land and has priority and must be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which the land may become charged or liable. The lien may be foreclosed upon expiration of the same period after delinquency and in the same manner provided by law for foreclosure of liens for delinquent real property taxes as provided in RCW 84.64.050. Any compensating tax unpaid on its due date will thereupon become delinquent. From the date of delinquency until paid, interest is charged at the same rate applied by law to delinquent ad valorem property taxes.
     (13) The compensating tax specified in subsection (11) of this section may not be imposed if the removal of designation under subsection (5) of this section resulted solely from:
     (a) Transfer to a government entity in exchange for other forest land located within the state of Washington;
     (b) A taking through the exercise of the power of eminent domain, or sale or transfer to an entity having the power of eminent domain in anticipation of the exercise of such power;
     (c) A donation of fee title, development rights, or the right to harvest timber, to a government agency or organization qualified under RCW 84.34.210 and 64.04.130 for the purposes enumerated in those sections, or the sale or transfer of fee title to a governmental entity or a nonprofit nature conservancy corporation, as defined in RCW 64.04.130, exclusively for the protection and conservation of lands recommended for state natural area preserve purposes by the natural heritage council and natural heritage plan as defined in chapter 79.70 RCW or approved for state natural resources conservation area purposes as defined in chapter 79.71 RCW. At such time as the land is not used for the purposes enumerated, the compensating tax specified in subsection (11) of this section is imposed upon the current owner;
     (d) The sale or transfer of fee title to the parks and recreation commission for park and recreation purposes;
     (e) Official action by an agency of the state of Washington or by the county or city within which the land is located that disallows the present use of the land;
     (f) The creation, sale, or transfer of forestry riparian easements under RCW 76.13.120;
     (g) The creation, sale, or transfer of a conservation easement of private forest lands within unconfined channel migration zones or containing critical habitat for threatened or endangered species under RCW 76.09.040;
     (h) The sale or transfer of land within two years after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified forest land, designated as forest land under this chapter, or classified under chapter 84.34 RCW continuously since 1993. The date of death shown on a death certificate is the date used for the purposes of this subsection (13)(h); ((or))
     (i) The sale or transfer of fee title to the department of natural resources for inclusion in the Teanaway community forest trust as identified in section 14 of this act; or
     (j)(i) The discovery that the land was designated under this chapter in error through no fault of the owner. For purposes of this subsection (13)(((i))) (j), "fault" means a knowingly false or misleading statement, or other act or omission not in good faith, that contributed to the approval of designation under this chapter or the failure of the assessor to remove the land from designation under this chapter.
     (ii) For purposes of this subsection (13), the discovery that land was designated under this chapter in error through no fault of the owner is not the sole reason for removal of designation under subsection (5) of this section if an independent basis for removal exists. An example of an independent basis for removal includes the land no longer being devoted to and used for growing and harvesting timber.
     (14) In a county with a population of more than six hundred thousand inhabitants or in a county with a population of at least two hundred forty-five thousand inhabitants that borders Puget Sound as defined in RCW 90.71.010, the compensating tax specified in subsection (11) of this section may not be imposed if the removal of designation as forest land under subsection (5) of this section resulted solely from:
     (a) An action described in subsection (13) of this section; or
     (b) A transfer of a property interest to a government entity, or to a nonprofit historic preservation corporation or nonprofit nature conservancy corporation, as defined in RCW 64.04.130, to protect or enhance public resources, or to preserve, maintain, improve, restore, limit the future use of, or otherwise to conserve for public use or enjoyment, the property interest being transferred. At such time as the property interest is not used for the purposes enumerated, the compensating tax is imposed upon the current owner.

PART VI: MISCELLANEOUS

NEW SECTION.  Sec. 26   Section 12 of this act expires if the requirements set out in section 7, chapter 36, Laws of 2012 are met.

NEW SECTION.  Sec. 27   Section 13 of this act takes effect if the requirements set out in section 7, chapter 36, Laws of 2012 are met."

     Correct the title.

EFFECT:  Requires a cost-benefit analysis and a cost estimate and financing plan of the Yakima river basin integrated plan; directs the Department of Natural Resources to create the Teanaway community forest trust as a land holding to manage certain property acquisitions related to the Yakima river basin integrated plan; exempts acquisitions for the purposes of establishing the Teanaway community forest trust from paying compensating taxes; and adds legislative intent related to the need to identify and evaluate new revenue sources to assist in paying for the Yakima river basin projects.

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