BILL REQ. #:  H-3093.2 

Read first time 01/17/14.   Referred to Committee on Agriculture & Natural Resources.

     AN ACT Relating to developing a water quality trading program in Washington; adding a new section to chapter 89.08 RCW; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that water quality trading is an innovative approach adopted in at least seventeen other states that can lead to a more efficient achievement of water quality goals. The premise of water quality trading is based on the fact that certain sources in a given watershed can have very different costs to control the same pollutant. Trading programs allow facilities facing higher pollution control costs to meet their regulatory obligations by purchasing environmentally equivalent or superior pollution reductions from another source at a lower cost. This trading achieves the same water quality improvement at lower overall cost.
     (2) The legislature further finds that the United States environmental protection agency has been supportive of water quality trading programs since 1993 when it issued an initial document called the National Water Quality Trading Policy. With this publication, the environmental protection agency sent a clear signal of federal support for this innovative, market-based approach to improving water quality.
     (3) The legislature further finds that water quality trading is, and should remain, a voluntary option that regulated point sources can use to meet the discharge limits in their national pollutant discharge elimination system permits.
     (4) The legislature recognizes that setting up a water quality trading program can be a complex task that needs to be transparent, must have real, accountable deductions in pollution inputs, must be defensible, and must be enforceable. A water quality trading program may not be suitable for many watersheds in the state. However, the legislature also finds that the state of Washington should explore the option as a tool for achieving water quality goals and investigate whether this tool is viable given the specific, local water quality concerns facing Washington's water bodies.

NEW SECTION.  Sec. 2   A new section is added to chapter 89.08 RCW to read as follows:
     (1) The state conservation commission, in partnership with the department of ecology, shall build upon the report on conservation markets produced pursuant to chapter 133, Laws of 2008 and explore further the options for developing a water quality trading program in Washington. This effort must include the development of at least three specific proposals for on-the-ground, actual test sites for water quality trading. Each test site must be located in a different watershed and, if possible, address a different water quality issue, such as pH, nitrogen, temperature, or sediment.
     (2) The proposals for test sites developed under this section must include specifics as to how the targeted issue would be addressed, including:
     (a) The identification of potential sellers and buyers in the trading arrangement;
     (b) How accountable deductions in pollution inputs will be measured and reported;
     (c) How ongoing monitoring would be ensured;
     (d) How violations would be enforced;
     (e) What costs would be incurred and which, if any, of the costs should be supported by the public;
     (f) What standards and conditions would be applied to the approval process for a trading program; and
     (g) What barriers exist to implementing the proposed trading programs.
     (3) The state conservation commission must coordinate with Indian tribes, the department of agriculture and other state agencies, local governments, and other interested stakeholders in developing the test site proposals under this section.
     (4) The department of ecology must operate as a full partner with the state conservation commission in the implementation of this section and dedicate the necessary resources to achieve the goals of this section.
     (5) The state conservation commission must report its proposals for test sites to the legislature consistent with RCW 43.01.036 by October 31, 2017. However, if in the implementation of this section, the state conservation commission, the department of ecology, and any involved partners feel that a test site proposal developed under this section can be implemented without further legislative direction, then the necessary parties shall implement the proposal prior to the reporting deadline provided in this section.
     (6) This section expires June 30, 2018.