BP BHEAD INT S [atlas:bill]

AN ACT Relating to water transfers; and adding a new chapter to Title 90 RCW.

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

NEW SECTION. Sec. 1. The legislature finds:

(1) Voluntary water transfers between water users can reallocate water use in a manner that will result in more efficient use of water resources;

(2) Voluntary water transfers can help alleviate water shortages, save capital outlays, reduce development costs, and provide an incentive for investment in water conservation efforts by water right holders; and

(3) The state should expedite the administrative process for noncontested water transfers among water right holders, conveying greater operational control to water managers and water right holders.

NEW SECTION. Sec. 2. The following definitions apply throughout this chapter, unless the context clearly requires otherwise.

(1) "Board" means a water conservancy board created under this chapter.

(2) "Consumptive quantity" means the actual five-year average amount of water that the water right holder has diverted reduced by the estimated amount of return flows.

(3) "Department" means the department of ecology.

(4) "Director" means the director of the department.

(5) "Petition" means a petition to organize a water conservancy board.

(6) "WRIA" means a water resource inventory area established by rule.

NEW SECTION. Sec. 3. (1) Any of the following local water resource agencies may petition the department for permission to organize a board and to exercise the powers and authorities of a board under this chapter within the geographic boundaries of the local water resource agency and any area in which the agency provides retail service to customers or members:

(a) An irrigation district organized under chapter 87.03 RCW;

(b) A reclamation district organized under chapter 89.30 RCW;

(d) A public utility district that operates a municipal water supply system under chapter 54.08 RCW;

(e) A water district that operates a municipal water supply system under chapter 57.08 RCW; or

(f) A cooperative or mutual corporation that operates a public water system serving one hundred or more accounts.

(2) A board formed and organized under this section by a local water resource agency constitutes a separate governmental subdivision of this state, and a public body corporate and politic exercising public powers. The initial and successor directors or other governing body of the board shall be appointed by the governing body of the local water resource agency petitioner. The number of directors shall be three or more, and any director may be reappointed for successive terms.

NEW SECTION. Sec. 4. (1) Water right holders who divert water for use within one or more WRIAs may petition the department for permission to organize a water conservancy board encompassing the geographic area of the WRIAs in which the petitioners divert or use water and to exercise the powers and authorities of a board under this chapter. The number of directors shall be three.

(2) A board formed and organized under this section by three or more water right holders constitutes a separate governmental subdivision of this state, and a public body corporate and politic exercising public powers. The board shall have a governing body of three directors. Immediately upon approval of a petition to form a board, the initial governing body of the board shall be appointed by the director from among six individuals recommended by the petitioners. The initial directors shall form and organize the board and shall serve as the initial governing body of the board. When the term of any initial director expires, the director shall appoint a successor based on recommendations from the board. Any director may be reappointed for successive terms. If any director does not complete his or her term, a successor shall be appointed to fill out the remaining term. A water right holder who diverts or uses water within the WRIAs included in the board may be appointed as a successor director.

NEW SECTION. Sec. 5. (1) Any combination of two or more local water resource agencies and one or more local water right holders may jointly petition the department for permission to organize a board and to exercise the powers and authorities of a board under this chapter within the geographic boundaries of any of the participating local water resource agencies and any area in which any agency provides retail service to customers or members, or within any WRIA in which the water right holder petitioners joining in the petition divert or use water.

(2) A board formed and organized by any combination of two or more local water resource agencies and one or more eligible water right holders constitutes a separate governmental subdivision of this state, and a public body corporate and politic exercising public powers. The board shall have three directors appointed from the organizing bodies.

NEW SECTION. Sec. 6. A petition to form a board must conform to the following requirements and contain the following information:

(1) The name and address of each petitioner;

(2) A brief description of the water right and use of each petitioner sufficient to identify the place and source of diversion and the place of use of the water;

(3) Identification of the geographic boundaries of any local water resource agency or WRIA or WRIAs to be included within the board;

(4) A statement of the need for the board; and

(5) The proposed bylaws or an equivalent statement of the rules and procedures that will govern the operation of the board once organized. The bylaws shall provide, among other things, for four-year terms for directors.

NEW SECTION. Sec. 7. (1) The petition shall be presented to the director. As soon as practicable after it is received, but no later than ninety days, the department shall determine if approval of the petition would further the purposes of this chapter.

(2) No later than ninety days after the petition is first presented to the director, the director shall act on the petition.

NEW SECTION. Sec. 8. Any board, and the directors thereof, has the following powers, in addition to others granted in this chapter:

(1) A board may establish a water transfer exchange through which all or part of the water that any person is entitled to use by reason of owning or holding a water right may be listed for sale or transfer. Water transfers approved by the board must remain within existing beneficial uses or general sectors, and water that is being used for agricultural applications is restricted to short-term or long-term leases. Each board shall maintain and publish all information made available to the board concerning water rights listed with the board and any application to the board for approval of a water transfer.

(2) Each board shall establish a program and procedures, consistent with applicable law and rules adopted by the department, for the administration of a system of timely local approvals for water transfers under this chapter. The administration of the system shall be performed exclusively by the board.

(3) The transferor and the transferee of any proposed water transfer may apply to a board for approval of such transfer if the water proposed to be transferred is currently diverted or used within the geographic boundaries of the board, or would be diverted or used within the geographic boundaries of the board if the transfer is approved. The application shall contain such information as may be required by the board in order to review and act on the application.

(4) A board may review and approve any application for a water transfer if the water proposed to be transferred is currently diverted or used within the geographic boundaries of the board, or the water would be diverted or used within the geographic boundaries of the board if the proposed transfer is approved. Water that is diverted or used within a board that is transferred to an instream use shall be deemed to be used within the board. The board shall publish notice of the application and send notice to state agencies as provided in RCW 90.03.280. Any person claiming detriment or injury to an existing water right as a result of the proposed transfer may intervene in any application before the board. Other interested persons may submit comments. The board shall review each application for a transfer and determine whether it meets the requirements of this chapter and any rules adopted by the department under this chapter, and otherwise complies with the law. If a majority of the governing body of the board determines that the application is complete and in accordance with the law, and the transfer may be made without injury or detriment to existing rights of other water right holders, the board shall issue to the applicant a certificate conditionally approving the transfer, subject to review by the director as provided in this section.

(5) A board may acquire, purchase, hold, lease, manage, occupy, and sell real and personal property or any interest therein, enter into and perform any and all necessary contracts, appoint and employ the necessary agents and employees, employ contractors, including contracts for professional services to sue and be sued, and do any and all lawful acts required and expedient to carry out the purposes of this chapter. The board shall be an independently funded entity, as determined by the board.

NEW SECTION. Sec. 9. (1) The application of the transferor and the transferee in any proposed water transfer shall include, in addition to other information required by the board, information sufficient to establish to the board's satisfaction, the transferor's entitlement to the quantity of water being transferred, and it shall describe any applicable existing limitations on the right to use water, including, without limitation, the place of diversion, place of use, source of supply, time of use, period of use, and the place of storage.

(2) A water right or nonconsumptive use that has not been adjudicated may be transferred under this chapter, however neither the board's approval of a transfer, nor the department's approval of the board's action, constitutes an adjudication of the validity, priority, or quantity of the transferor's water right as between the transferor or the transferee and the state, or as between the transferor or the transferee and one or more other water use claimants and such approvals do not preclude or prejudice a subsequent challenge to the validity, priority, or quantity of the right in an adjudication proceeding.

NEW SECTION. Sec. 10. (1) If an application for transfer is proposed to transfer water from one irrigation district to another, approval of the transfer shall be conditioned upon receipt of concurrence from each of the irrigation districts that the transfer will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the irrigation districts. A transfer involving a change in place or use or a nonconsumptive use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the irrigation district if the use of water continues within the irrigation district.

(2) There is a rebuttable presumption that any water transfer does not impair or injure any existing rights of third parties; however, if any person claims to be the holder of a right impaired by a proposed transfer, that person has the right to a hearing before the governing body of the board. The board shall receive such evidence as it may deem material and necessary to determine the validity of the claim of impairment. If the evidence presented by the party claiming an impairment established that more probably than not, the claimant's water right would be impaired by the proposed transfer, the board may not approve the transfer unless:

(a) The applicant and the impaired party agree upon compensation for the impairment; or

(b) The applicant proposes a physical solution that substantially mitigates the impairment and is reasonable under the circumstances.

(3) Any water transfer that is limited to the consumptive quantity of the transferor or a nonconsumptive use is conclusively presumed to cause no detriment or impairment to existing rights of third parties. The burden is on the applicant to establish that a proposed transfer is limited to the transferor's consumptive quantity.

(4) Existing rights include instream flows and nonconsumptive uses for public and private fish propagation established under chapter 90.22 RCW or by court decree, as well as other junior and senior rights.

NEW SECTION. Sec. 11. (1) If a transfer is approved by a board, the board shall submit a copy of the proposed certificate conditionally approving the transfer to the department for review. Along with a copy of the proposed certificate, the board shall submit a report summarizing any factual findings on which the board relied in deciding to approve the proposed transfer. Notice by mail shall be sent to any person who objected to a transfer or who has requested notice.

(2) The department may review any proposed transfer approved by a board for compliance with this chapter, guidelines adopted by the department, and other applicable law. The parties to a transfer or any third party whose water right is alleged to be impaired by a transfer may appeal the board's decision to the department. The board shall, at the request of the department or any intervenor, forward to the department the files and records upon which the board based its decision. The department shall review the action of the board and affirm, reverse, or modify the action of the board within thirty days of receipt. The thirty-day time period for department review of a board's action may be extended an additional thirty days by the department, by the consent of the parties to a transfer. If the department fails to act on the matter within the required time, the board's action is final. Upon approval of a water transfer by the action or nonaction of the department, the conditional certificate issued by the board is final and valid.

NEW SECTION. Sec. 12. The decision of the director or the department to approve or deny a petition to form a board, or to suspend a board's powers and authorities, or to approve or deny a water transfer, by action or nonaction, and any other final agency decision or final action under this chapter is subject to judicial review as provided in chapter 34.05 RCW.

NEW SECTION. Sec. 13. Sections 1 through 12 of this act constitute a new chapter in Title 90 RCW.