[atlas:bill]

AN ACT Relating to water resource management; amending RCW 90.03.380, 90.03.370, 90.03.015, 90.42.080, 90.38.020, 90.44.050, 90.14.160, 90.14.170, 90.14.180, 90.44.100, and 90.03.330; reenacting and amending RCW 90.14.140 and 43.84.092; adding new sections to chapter 90.03 RCW; adding a new section to chapter 90.14 RCW; and creating a new section.

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

Sec. 1. RCW 90.03.380 and 2001 c 237 s 5 are each amended to read as follows:

(1) The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the same is used: PROVIDED, HOWEVER, That the right may be transferred to another or to others and become appurtenant to any other land or place of use without loss of priority of right theretofore established if such change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if such change can be made without detriment or injury to existing rights. A change in the place of use, point of diversion, and/or purpose of use of a water right to enable irrigation of additional acreage or the addition of new uses may be permitted if such change results in no increase in the annual consumptive quantity of water used under the water right. For purposes of this section, "annual consumptive quantity" means the estimated or actual annual amount of water diverted or withdrawn pursuant to the water right, reduced by the estimated annual amount of return flows, ((~~averaged over the two years~~)) during the year of greatest use within the most recent ((~~five-year~~)) fifteen-year period of continuous beneficial use of the water right. Such an annual consumptive quantity represents only the consumptive use portion of the amount of water that may be spread to new or expanded uses; it does not define either the extent of the right or the total amount of water that may be transferred or changed to accomplish the spreading. Before any transfer of such right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department, and the application shall not be granted until notice of the application is published as provided in RCW 90.03.280. If it shall appear that such transfer or such change may be made without injury or detriment to existing rights, the department shall issue to the applicant a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant may be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water.

(2) If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts.

(3) A change in place of 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 district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of jurisdiction of the joint board and the change can be made without detriment or injury to existing rights.

(4) The right to use water for any beneficial use within the general category of an agricultural use includes the right to use the water, without applying to the department or any other governmental entity for approval, for any other beneficial use within the general category of an agricultural use. The general category of an agricultural use of water includes, but is not limited to, the beneficial use of water for stock watering, agricultural irrigation, agricultural frost control, processing agricultural commodities into agricultural products, and other agricultural uses.

(5) This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070.

((~~(5)~~)) (6)(a) Pending applications for new water rights are not entitled to protection from impairment, injury, or detriment when an application relating to an existing surface or ground water right is considered.

(b) Applications relating to existing surface or ground water rights may be processed and decisions on them rendered independently of processing and rendering decisions on pending applications for new water rights within the same source of supply without regard to the date of filing of the pending applications for new water rights.

(c) Notwithstanding any other existing authority to process applications, including but not limited to the authority to process applications under WAC 173-152-050 as it existed on January 1, 2001, an application relating to an existing surface or ground water right may be processed ahead of a previously filed application relating to an existing right when sufficient information for a decision on the previously filed application is not available and the applicant for the previously filed application is sent written notice that explains what information is not available and informs the applicant that processing of the next application will begin. The previously filed application does not lose its priority date and if the information is provided by the applicant within sixty days, the previously filed application shall be processed at that time. This subsection ((~~(5)~~)) (6)(c) does not affect any other existing authority to process applications.

(d) Nothing in this subsection ((~~(5)~~)) (6) is intended to stop the processing of applications for new water rights.

((~~(6)~~)) (7)(a) No applicant for a change, transfer, or amendment of a surface or ground water right may be required to give up any part of the applicant's valid water right or claim to a state agency, the trust water rights program, or to other persons as a condition of processing the application.

((~~(7)~~)) (b) The department's review of an application for change, transfer, or an amendment of a surface or ground water right shall not include a consideration or investigation of potential relinquishment of the water right or a portion of the right through prior nonuse nor shall the department's receipt or review or other consideration of such an application or its action on such an application be cause for the department's initiation of relinquishment proceedings under chapter 90.14 RCW for prior nonuse of the water right that is the subject of the application.

(8) In revising the provisions of this section and adding provisions to this section by chapter 237, Laws of 2001, the legislature does not intend to imply legislative approval or disapproval of any existing administrative policy regarding, or any existing administrative or judicial interpretation of, the provisions of this section not expressly added or revised.

Sec. 2. RCW 90.14.140 and 2001 c 240 s 1, 2001 c 237 s 27, and 2001 c 69 s 5 are each reenacted and amended to read as follows:

(1) For the purposes of RCW 90.14.130 through 90.14.180, "sufficient cause" shall be defined as the nonuse of all or a portion of the water by the owner of a water right for a period of ((~~five~~)) fifteen or more consecutive years where such nonuse occurs as a result of:

(a) Drought, or other unavailability of water;

(b) The destruction of works, diversions, or other facilities essential to use of the water by a cause not within the control of the owner of the appropriation, and good faith efforts to repair or replace the works, diversions, or facilities have been and are being made;

(c) Nonuse occurring during a period of time within which the exercise of all or part of the water right was not necessary due to climatic conditions, if the water right holder had the facility capable of handling the full allowed rate and duty, and was otherwise ready, willing, and able to use the entire amount of water allowed under the water right;

(d) Nonuse occurring during a period of time within which the water was included in a pending transfer application;

(e) Active service in the armed forces of the United States during military crisis;

((~~(c)~~)) (f) Nonvoluntary service in the armed forces of the United States;

((~~(d)~~)) (g) The operation of legal proceedings;

((~~(e)~~)) (h) Federal or state agency leases of or options to purchase lands or water rights which preclude or reduce the use of the right by the owner of the water right;

((~~(f)~~)) (i) Federal laws imposing land or water use restrictions either directly or through the voluntary enrollment of a landowner in a federal program implementing those laws, or acreage limitations, or production quotas;

((~~(g) Temporarily~~)) (j) Reduced water need for irrigation use where such reduction is due to varying weather conditions, including but not limited to precipitation and temperature, that warranted the reduction in water use, so long as the water user's diversion and delivery facilities are maintained in good operating condition consistent with beneficial use of the full amount of the water right;

((~~(h)~~)) (k) Temporarily reduced diversions or withdrawals of irrigation water directly resulting from the provisions of a contract or similar agreement in which a supplier of electricity buys back electricity from the water right holder and the electricity is needed for the diversion or withdrawal or for the use of the water diverted or withdrawn for irrigation purposes;

((~~(i)~~)) (l) Water conservation measures ((~~implemented under the Yakima river basin water enhancement project, so long as the conserved water is reallocated in accordance with the provisions of P.L. 103-434~~)) or improved efficiency in distributing or using water under the right;

((~~(j)~~)) (m) Reliance by an irrigation water user on the transitory presence of return flows in lieu of diversion or withdrawal of water from the primary source of supply, if such return flows are measured or reliably estimated using a scientific methodology generally accepted as reliable within the scientific community; ((or

~~(k)~~)) (n) The reduced use of irrigation water resulting from crop rotation. For purposes of this subsection, crop rotation means the ((~~temporary~~)) short-term or long-term change in the type of crops grown ((~~resulting from the exercise of generally recognized sound farming practices~~)). Unused water resulting from crop rotation will not be relinquished if the remaining portion of the water continues to be beneficially used; or

(o) Economic hardship that financially prevents, restricts, or hinders the ability of the holder of the water right to use water under the right.

(2) Notwithstanding any other provisions of RCW 90.14.130 through 90.14.180, there shall be no relinquishment of any water right:

(a) If such right is claimed for power development purposes under chapter 90.16 RCW and annual license fees are paid in accordance with chapter 90.16 RCW;

(b) If such right is used for a standby or reserve water supply to be used in time of drought or other low flow period so long as withdrawal or diversion facilities are maintained in good operating condition for the use of such reserve or standby water supply;

(c) If such right is claimed for a determined future development to take place either within fifteen years of July 1, 1967, or the most recent beneficial use of the water right, whichever date is later;

(d) If such right is claimed for municipal water supply purposes under chapter 90.03 RCW;

(e) If such waters are not subject to appropriation under the applicable provisions of RCW 90.40.030;

(f) If such right or portion of the right is leased to another person for use on land other than the land to which the right is appurtenant as long as the lessee makes beneficial use of the right in accordance with this chapter and a transfer or change of the right has been approved by the department in accordance with RCW 90.03.380, 90.03.383, 90.03.390, or 90.44.100;

(g) If such a right or portion of the right is authorized for a purpose that is satisfied by the use of agricultural industrial process water as authorized under RCW 90.46.150; ((or))

(h) If such right is a trust water right under chapter 90.38 or 90.42 RCW;

(i) For a nonuse of water during foreclosure or bankruptcy proceedings that involve the water right authorizing the water use or involve the land to which the water right is appurtenant; or

(j) Unless an action is initiated by the department or is before the pollution control hearings board or a court to relinquish the right within fifteen years of the date the alleged nonuse of water under a right occurred, or a finding that the right or a portion of the right has been relinquished is made by the department within fifteen years of the date the alleged nonuse of water under a right occurred, or a motion or order is before the pollution control hearings board or court that would result in relinquishment within fifteen years of the date the alleged nonuse of water under a right occurred.

(3) In adding provisions to this section by chapter 237, Laws of 2001, the legislature does not intend to imply legislative approval or disapproval of any existing administrative policy regarding, or any existing administrative or judicial interpretation of, the provisions of this section not expressly added or revised.

Sec. 3. RCW 90.03.370 and 2000 c 98 s 3 are each amended to read as follows:

(1)(a) All applications for reservoir permits shall be subject to the provisions of RCW 90.03.250 through 90.03.320. But the party or parties proposing to apply to a beneficial use the water stored in any such reservoir shall also file an application for a permit, to be known as the secondary permit, which shall be in compliance with the provisions of RCW 90.03.250 through 90.03.320. Such secondary application shall refer to such reservoir as its source of water supply and shall show documentary evidence that an agreement has been entered into with the owners of the reservoir for a permanent and sufficient interest in said reservoir to impound enough water for the purposes set forth in said application. When the beneficial use has been completed and perfected under the secondary permit, the department shall take the proof of the water users under such permit and the final certificate of appropriation shall refer to both the ditch and works described in the secondary permit and the reservoir described in the primary permit.

(b) The department shall expedite processing applications for the following types of storage proposals:

(i) Development of storage facilities that will not require a new water right for the source of water to be stored;

(ii) Adding or changing one or more purposes of use of stored water;

(iii) Adding to the storage capacity of an existing storage facility; and

(iv) Applications for secondary permits to secure use from existing storage facilities.

(c) The following types of storage facilities do not require a reservoir or secondary permit from the department for the storage and use of stored water:

(i) Rain barrels, cisterns, and other similar facilities for capturing runoff from roofs, paved areas, and other hard surfaces on a single residential, commercial, or industrial property or public facility when the total amount of storage does not exceed ten thousand gallons and the water stored is intended to be put to beneficial use;

(ii) Facilities to recapture and reuse return flow from irrigation operations when serving a single farm operation if the acreage irrigated is not increased beyond the acreage allowed to be irrigated under the water right that applies to the property;

(iii) Off-stream ponds filled from a separate source not exceeding ten acre feet in capacity;

(iv) Excavated ponds not filled from a separate source, but rather from interception of the water table;

(v) Storm water management storage facilities if no beneficial use is made of the captured water; and

(vi) Excavated municipal water reservoirs, water towers, and other similar facilities that are integral to a water supply system's distribution system.

(d) The storage and use of water from facilities described in (c) of this subsection may be regulated by the department if necessary to prevent or remedy the impairment of any water right or the diminishment of instream flows.

(2)(a) For the purposes of this section, "reservoir" includes, in addition to any surface reservoir, any naturally occurring underground geological formation where water is collected and stored for subsequent use as part of an underground artificial storage and recovery project. To qualify for issuance of a reservoir permit an underground geological formation must meet standards for review and mitigation of adverse impacts identified, for the following issues:

(i) Aquifer vulnerability and hydraulic continuity;

(ii) Potential impairment of existing water rights;

(iii) Geotechnical impacts and aquifer boundaries and characteristics;

(iv) Chemical compatibility of surface waters and ground water;

(v) Recharge and recovery treatment requirements;

(vi) System operation;

(vii) Water rights and ownership of water stored for recovery; and

(viii) Environmental impacts.

(b) Standards for review and standards for mitigation of adverse impacts for an underground artificial storage and recovery project shall be established by the department by rule. Notwithstanding the provisions of RCW 90.03.250 through 90.03.320, analysis of each underground artificial storage and recovery project and each underground geological formation for which an applicant seeks the status of a reservoir shall be through applicant-initiated studies reviewed by the department.

(3) For the purposes of this section, "underground artificial storage and recovery project" means any project in which it is intended to artificially store water in the ground through injection, surface spreading and infiltration, or other department-approved method, and to make subsequent use of the stored water. However, (a) this subsection does not apply to irrigation return flow, or to operational and seepage losses that occur during the irrigation of land, or to water that is artificially stored due to the construction, operation, or maintenance of an irrigation district project, or to projects involving water reclaimed in accordance with chapter 90.46 RCW; and (b) RCW 90.44.130 applies to those instances of claimed artificial recharge occurring due to the construction, operation, or maintenance of an irrigation district project or operational and seepage losses that occur during the irrigation of land, as well as other forms of claimed artificial recharge already existing at the time a ground water subarea is established.

(4) Nothing in chapter 98, Laws of 2000 changes the requirements of existing law governing issuance of permits to appropriate or withdraw the waters of the state.

(5) The department shall report to the legislature by December 31, 2001, on the standards for review and standards for mitigation developed under subsection (3) of this section and on the status of any applications that have been filed with the department for underground artificial storage and recovery projects by that date.

(6) Where needed to ensure that existing storage capacity is effectively and efficiently used to meet multiple purposes, the department may authorize reservoirs to be filled more than once per year or once per season of use.

NEW SECTION. Sec. 4. A new section is added to chapter 90.03 RCW to read as follows:

(1) The place of use for the water right of a public water system as defined by RCW 70.119A.020(4) is whichever of the following that provides the largest service area for the system:

(a) The place of use listed on the system's water right certificate or in the statements of claim for the system's water rights filed in the state's water rights claims registry established under RCW 90.14.111;

(b) The place of use identified in the water system plan most recently approved by the department of health for the system under RCW 43.20.050 or as part of a coordinated water system plan under chapter 70.116 RCW; or

(c) The place of use identified in the water system plan most recently submitted by the system to the department of health for approval under RCW 43.20.050 or as part of a coordinated water system plan under chapter 70.116 RCW.

(2) Subsection (1)(b) and (c) of this section apply only to public water systems for which water system plans have been submitted for approval under RCW 43.20.050 or as part of a coordinated water system plan under chapter 70.116 RCW.

Sec. 5. RCW 90.03.015 and 1987 c 109 s 65 are each amended to read as follows:

((~~As used in this chapter:~~)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Department" means the department of ecology((;)).

(2) "Director" means the director of ecology((~~; and~~)).

(3) "Municipal water supplier" means a purveyor, as defined in RCW 70.116.030(4), that operates a public water system with fifteen or more service connections.

(4) "Municipal water supply purposes" means any use for which water is or is anticipated to be provided by a municipal water supplier.

(5) "Person" means any firm, association, water users' association, corporation, irrigation district, or municipal corporation, as well as an individual.

Sec. 6. RCW 90.42.080 and 2001 c 237 s 31 are each amended to read as follows:

(1)(a) The state may acquire all or portions of existing water rights, by purchase, gift, or other appropriate means other than by condemnation, from any person or entity or combination of persons or entities. Once acquired, such rights are trust water rights. A water right acquired by the state that is expressly conditioned to limit its use to instream purposes shall be administered as a trust water right in compliance with that condition.

(b) If an aquatic species is listed as threatened or endangered under federal law for a body of water, or is listed as depressed or threatened by reason of inadequate stream flow under state law, and the holder of a right to water from the body of water chooses to donate all or a portion of the person's water right to the trust water system to assist in providing those instream flows on a temporary or permanent basis, the department shall accept the donation on such terms as the person may prescribe as long as the donation satisfies the requirements of subsection (4) of this section and the other applicable requirements of this chapter and the terms prescribed are relevant and material to protecting any interest in the water right retained by the donor. Once accepted, such rights are trust water rights within the conditions prescribed by the donor.

(2) The department may enter into leases, contracts, or such other arrangements with other persons or entities as appropriate, to ensure that trust water rights acquired in accordance with this chapter may be exercised to the fullest possible extent.

(3) Trust water rights may be acquired by the state on a temporary or permanent basis.

(4) A water right donated under subsection (1)(b) of this section shall not exceed the extent to which the water right was exercised during the five years before the donation nor may the total of any portion of the water right remaining with the donor plus the donated portion of the water right exceed the extent to which the water right was exercised during the five years before the donation. A water right holder who believes his or her water right has been impaired by a trust water right donated under subsection (1)(b) of this section may request that the department review the impairment claim. If the department determines that exercising the trust water right resulting from the donation or exercising a portion of that trust water right donated under subsection (1)(b) of this section is impairing existing water rights in violation of RCW 90.42.070, the trust water right shall be altered by the department to eliminate the impairment. Any decision of the department to alter or not to alter a trust water right donated under subsection (1)(b) of this section is appealable to the pollution control hearings board under RCW 43.21B.230. A donated water right's status as a trust water right under this subsection is not evidence of the validity or quantity of the water right.

(5) The provisions of RCW 90.03.380 and 90.03.390 do not apply to donations for instream flows described in subsection (1)(b) of this section, but do apply to other transfers of water rights under this section.

(6) No funds may be expended for the purchase of water rights by the state pursuant to this section unless specifically appropriated for this purpose by the legislature.

(7) Any water right conveyed to the trust water right system as a gift that is expressly conditioned to limit its use to instream purposes shall be managed by the department for public purposes to ensure that it qualifies as a gift that is deductible for federal income taxation purposes for the person or entity conveying the water right.

(8) If the department acquires a trust water right by lease in an area in which a drought order has been issued under RCW 43.83B.405 and is in effect at the time the department leases the water right, the amount of the trust water right shall not exceed the extent to which the water right was exercised during the five years before the acquisition was made nor may the total of any portion of the water right remaining with the original water right holder plus the portion of the water right leased by the department exceed the extent to which the water right was exercised during the five years before the acquisition. A water right holder who believes his or her water right has been impaired by a trust water right leased under this subsection may request that the department review the impairment claim. If the department determines that exercising the trust water right resulting from the leasing or exercising ((~~[of]~~)) of a portion of that trust water right leased under this subsection is impairing existing water rights in violation of RCW 90.42.070, the trust water right shall be altered by the department to eliminate the impairment. Any decision of the department to alter or not to alter a trust water right leased under this subsection is appealable to the pollution control hearings board under RCW 43.21B.230. The department's leasing of a trust water right under this subsection is not evidence of the validity or quantity of the water right.

(9) For a water right donated to or acquired by the trust water rights program on a temporary basis, the full quantity of water diverted or withdrawn to exercise the right before the donation or acquisition shall be placed in the trust water rights program and shall revert to the donor or person from whom it was acquired when the trust period ends.

(10) The procedures identified in subsection (1)(b) of this section for donations and identified in subsection (8) of this section for leases also apply to donations or leases of existing water rights where:

(a) Existing water rights related to agriculture are donated or leased to preserve the opportunity for future agricultural use and to enhance instream flows temporarily; or

(b) Existing water rights acquired for the purpose of providing water supply to industrial lands as designated in a land use plan adopted under chapter 36.70A RCW are donated or leased to preserve the opportunity for future industrial use and to enhance instream flows temporarily.

Sec. 7. RCW 90.38.020 and 2001 c 237 s 28 are each amended to read as follows:

(1)(a) The department may acquire water rights, including but not limited to storage rights, by purchase, lease, gift, or other appropriate means other than by condemnation, from any person or entity or combination of persons or entities. Once acquired, such rights are trust water rights. A water right acquired by the state that is expressly conditioned to limit its use to instream purposes shall be administered as a trust water right in compliance with that condition.

(b) If an aquatic species is listed as threatened or endangered under federal law for a body of water, or is listed as depressed or threatened by reason of inadequate stream flows under state law, and the holder of a right to water from the body of water chooses to donate all or a portion of the person's water right to the trust water system to assist in providing those instream flows on a temporary or permanent basis, the department shall accept the donation on such terms as the person may prescribe as long as the donation satisfies the requirements of subsection (4) of this section and the other applicable requirements of this chapter and the terms prescribed are relevant and material to protecting any interest in the water right retained by the donor. Once accepted, such rights are trust water rights within the conditions prescribed by the donor.

(2) The department may make such other arrangements, including entry into contracts with other persons or entities as appropriate to ensure that trust water rights acquired in accordance with this chapter can be exercised to the fullest possible extent.

(3) The trust water rights may be acquired on a temporary or permanent basis.

(4) A water right donated under subsection (1)(b) of this section shall not exceed the extent to which the water right was exercised during the five years before the donation nor may the total of any portion of the water right remaining with the donor plus the donated portion of the water right exceed the extent to which the water right was exercised during the five years before the donation. A water right holder who believes his or her water right has been impaired by a trust water right donated under subsection (1)(b) of this section may request that the department review the impairment claim. If the department determines that exercising the trust water right resulting from the donation or exercising a portion of that trust water right donated under subsection (1)(b) of this section is impairing existing water rights in violation of RCW 90.38.902, the trust water right shall be altered by the department to eliminate the impairment. Any decision of the department to alter or not alter a trust water right donated under subsection (1)(b) of this section is appealable to the pollution control hearings board under RCW 43.21B.230. A donated water right's status as a trust water right under this subsection is not evidence of the validity or quantity of the water right.

(5) Any water right conveyed to the trust water right system as a gift that is expressly conditioned to limit its use to instream purposes shall be managed by the department for public purposes to ensure that it qualifies as a gift that is deductible for federal income taxation purposes for the person or entity conveying the water right.

(6) If the department acquires a trust water right by lease in an area in which a drought order has been issued under RCW 43.83B.405 and is in effect at the time the department leases the water right, the amount of the trust water right shall not exceed the extent to which the water right was exercised during the five years before the acquisition was made nor may the total of any portion of the water right remaining with the original water right holder plus the portion of the water right leased by the department exceed the extent to which the water right was exercised during the five years before the acquisition. A water right holder who believes his or her water right has been impaired by a trust water right leased under this subsection may request that the department review the impairment claim. If the department determines that exercising the trust water right resulting from the leasing or exercising ((~~[of]~~)) of a portion of that trust water right leased under this subsection is impairing existing water rights in violation of RCW 90.38.902, the trust water right shall be altered by the department to eliminate the impairment. Any decision of the department to alter or not to alter a trust water right leased under this subsection is appealable to the pollution control hearings board under RCW 43.21B.230. The department's leasing of a trust water right under this subsection is not evidence of the validity or quantity of the water right.

(7) For a water right donated to or acquired by the trust water rights program on a temporary basis, the full quantity of water diverted or withdrawn to exercise the right before the donation or acquisition shall be placed in the trust water rights program and shall revert to the donor or person from whom it was acquired when the trust period ends.

(8) The procedures identified in subsection (1)(b) of this section for donations and identified in subsection (6) of this section for leases shall also apply to donations or leases of existing water rights where:

(a) Existing water rights related to agriculture are donated or leased to preserve the opportunity for future agricultural use and to enhance instream flows temporarily; or

NEW SECTION. Sec. 8. The legislature finds that the state has a significant need to provide a reliable water supply for people, farms, and fish, and that this can be accomplished through such activities as the construction of multiple purpose water storage facilities, and the leasing of water.

NEW SECTION. Sec. 9. A new section is added to chapter 90.03 RCW to read as follows:

The water for agriculture, salmon, and humans account is hereby created in the state treasury. The moneys in this account shall only be used for activities that develop water storage projects for multiple purposes, lease water, ensure safe drinking water, increase municipal and agricultural water conservation, promote water reuse, and to implement projects developed through locally based watershed planning. All interest earnings on moneys deposited into the account, including loan repayments, shall remain in the account and may be used for eligible purposes. Moneys in the account may be spent only after appropriation.

NEW SECTION. Sec. 10. A new section is added to chapter 90.03 RCW to read as follows:

(1) The proceeds from the sale of bonds authorized by this chapter shall be deposited into the water for agriculture, salmon, and humans account created in section 9 of this act unless otherwise specified below. These funds shall be appropriated by the legislature as follows:

(a) Fifty percent of the funding shall be used for water storage and conveyance projects for multiple instream and out-of-stream purposes. For this purpose, funding for a water storage facility that is within the distribution works of a public water system and within an incorporated area or within an area designated as an urban growth area under chapter 36.70A RCW shall be considered funding for a drinking water system and not funding that applies to the fifty percent dedicated by this subsection (1)(a). The department shall establish criteria for a grant and loan program for the construction, planning, design, and studies necessary for water storage and conveyance projects. The department shall contract with the public works board created under RCW 43.155.030 to administer these grants and loans;

(b) Twenty-five percent of the funding shall be deposited into the public works assistance account under chapter 43.155 RCW and shall be used for safe drinking water and reclaimed water projects;

(d) Seven and one-half percent of the funding shall be used to lease water to meet instream flow levels needed by fish; and

(e) Seven and one-half percent of the funding shall be used for implementing projects developed through the watershed planning process authorized under chapter 90.82 RCW.

(2) The percentage of the local funding for a capital project that is required under this section to receive state funding shall be the same for all types and categories of capital projects.

(3) If an agricultural water conservation project is provided funding under this section and in consideration thereof a portion of the water available under a water right involved in the project is to be transferred or otherwise dedicated to the state, the transfer or dedication shall be in the form of a lease of water for a period that is not more than the period during which the elements of the conservation project are estimated to operate effectively and efficiently. The quantity of water transferred or dedicated to the state expressed as a percentage of the total water available under the right before the transfer or dedication shall not exceed the percentage of the total cost of the conservation project represented by the funds provided by the state for the conservation project.

(4) The legislature may authorize expenditures from the water for agriculture, salmon, and humans account to pay for the costs of establishing and administering the water infrastructure programs described in subsection (1) of this section. The amount of funding dedicated to this purpose shall not exceed one percent of the total amount of bonds sold in any calendar year. These funds may be used to define technical and financial program requirements, such as grant and loan criteria, to solicit, review, and award funds, and to monitor performance, make payments, and conduct other administrative activities.

NEW SECTION. Sec. 11. A new section is added to chapter 90.03 RCW to read as follows:

The legislature shall appropriate any moneys that are provided under section 10 of this act for capital projects, including planning, engineering, and other studies for such projects, to the public works board created under RCW 43.155.030. Before November 1st of each year, the board shall develop and submit to the governor and the legislature a prioritized list of projects that are recommended for funding by the legislature under this section. The board shall approve and disburse grants and loans for such projects from appropriations made under this section.

Sec. 12. RCW 43.84.092 and 2001 2nd sp.s. c 14 s 608, 2001 c 273 s 6, 2001 c 141 s 3, and 2001 c 80 s 5 are each reenacted and amended to read as follows:

(1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.

(2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.

(3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:

(a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The 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 common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense 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 education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, 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 medical aid account, the mobile home park relocation fund, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land 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 health supplemental account, the Puyallup tribal settlement account, the resource management cost account, the site closure 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 supplemental pension 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 transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 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 for agriculture, salmon, and humans account, the water pollution control revolving fund, and the Western Washington University capital projects 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, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.

(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 90.44.050 and 1987 c 109 s 108 are each amended to read as follows:

After June 6, 1945, no withdrawal of public ground waters of the state shall be begun, nor shall any well or other works for such withdrawal be constructed, unless an application to appropriate such waters has been made to the department and a permit has been granted by it ((~~as herein~~)) provided((~~: EXCEPT, HOWEVER, That~~)) in this section. The following uses are exempt from this section, to the extent that the uses are regularly used beneficially, and are entitled to a right equal to that established by a permit issued under this chapter:

(1) Any withdrawal of public ground waters for stock-watering purposes((~~, or for~~));

(2) Any withdrawal of public ground waters in an amount not exceeding five thousand gallons a day for:

(a) The watering of a lawn; or

(b) The watering of a noncommercial garden not exceeding one-half acre in area((,)); or ((~~for~~))

(d) An industrial purpose ((in an amount not exceeding five thousand gallons a day, is and shall be exempt from the provisions of this section, but, to the extent that it is regularly used beneficially, shall be entitled to a right equal to that established by a permit issued under the provisions of this chapter: PROVIDED, HOWEVER, That)). However, the department from time to time may require the person or agency making any such small withdrawal to furnish information as to the means for and the quantity of that withdrawal((~~: PROVIDED, FURTHER, That~~)), but the department does not have authority to require the metering or measuring of the withdrawals authorized in this section. At the option of the party making withdrawals of ground waters of the state not exceeding five thousand gallons per day, applications under this section or declarations under RCW 90.44.090 may be filed and permits and certificates obtained in the same manner and under the same requirements as is in this chapter provided in the case of withdrawals in excess of five thousand gallons a day.

Sec. 14. RCW 90.14.160 and 1981 c 291 s 1 are each amended to read as follows:

Any person entitled to divert or withdraw waters of the state through any appropriation authorized by enactments of the legislature prior to enactment of chapter 117, Laws of 1917, or by custom, or by general adjudication, who abandons the same, or who voluntarily fails, without sufficient cause, to beneficially use all or any part of said right to divert or withdraw for any period of ((~~five~~)) fifteen successive years after July 1, 1967, shall relinquish such right or portion thereof, and said right or portion thereof shall revert to the state, after a process providing due process in accordance with RCW 90.14.130 and not at the time of the nonuse, and the waters affected by said right shall become available for appropriation in accordance with RCW 90.03.250.

Sec. 15. RCW 90.14.170 and 1967 c 233 s 17 are each amended to read as follows:

Any person entitled to divert or withdraw waters of the state by virtue of his ownership of land abutting a stream, lake, or watercourse, who abandons the same, or who voluntarily fails, without sufficient cause, to beneficially use all or any part of said right to withdraw or divert said water for any period of ((~~five~~)) fifteen successive years after July 1, 1967, shall relinquish such right or portion thereof, and such right or portion thereof shall revert to the state, and the waters affected by said right shall become available for appropriation in accordance with the provisions of RCW 90.03.250.

Sec. 16. RCW 90.14.180 and 1987 c 109 s 101 are each amended to read as follows:

Any person hereafter entitled to divert or withdraw waters of the state through an appropriation authorized under RCW 90.03.330, 90.44.080, or 90.44.090 who abandons the same, or who voluntarily fails, without sufficient cause, to beneficially use all or any part of said right to withdraw for any period of ((~~five~~)) fifteen successive years shall relinquish such right or portion thereof, and such right or portion thereof shall revert to the state, and the waters affected by said right shall become available for appropriation in accordance with RCW 90.03.250. All certificates hereafter issued by the department of ecology pursuant to RCW 90.03.330 shall expressly incorporate this section by reference. Such relinquishment occurs after a process providing due process in accordance with RCW 90.14.130 and not at the time of the nonuse.

NEW SECTION. Sec. 17. A new section is added to chapter 90.14 RCW to read as follows:

To determine the measurement for beneficial use, there must be at least five years of use within the last fifteen years. Of these five years of use within the last fifteen years, the one year with the largest volume is the beneficial use amount.

Sec. 18. RCW 90.44.100 and 1997 c 316 s 2 are each amended to read as follows:

(1) After an application to, and upon the issuance by the department of an amendment to the appropriate permit or certificate of ground water right, the holder of a valid right to withdraw public ground waters may, without losing the holder's priority of right, construct wells or other means of withdrawal at a new location in substitution for or in addition to those at the original location, or the holder may change the ((~~manner~~)) purpose or the place of use of the water.

(2) An amendment to construct replacement or a new additional well or wells at a location outside of the location of the original well or wells or to change the ((~~manner~~)) purpose or place of use of the water shall be issued only after publication of notice of the application and findings as prescribed in the case of an original application. Such amendment shall be issued by the department only on the conditions that: (a) The additional or replacement well or wells shall tap the same body of public ground water as the original well or wells; (b) where a replacement well or wells is approved, the use of the original well or wells shall be discontinued and the original well or wells shall be properly decommissioned as required under chapter 18.104 RCW; (c) where an additional well or wells is constructed, the original well or wells may continue to be used, but the combined total withdrawal from the original and additional well or wells shall not enlarge by increasing the annual consumptive quantity of the right conveyed by the original permit or certificate; and (d) other existing rights shall not be impaired. The department may specify an approved manner of construction and shall require a showing of compliance with the terms of the amendment, as provided in RCW 90.44.080 in the case of an original permit.

(3) The construction of a replacement or new additional well or wells at the location of the original well or wells shall be allowed without application to the department for an amendment. However, the following apply to such a replacement or new additional well: (a) The well shall tap the same body of public ground water as the original well or wells; (b) if a replacement well is constructed, the use of the original well or wells shall be discontinued and the original well or wells shall be properly decommissioned as required under chapter 18.104 RCW; (c) if a new additional well is constructed, the original well or wells may continue to be used, but the combined total withdrawal from the original and additional well or wells shall not enlarge the right conveyed by the original water use permit or certificate; (d) the construction and use of the well shall not interfere with or impair water rights with an earlier date of priority than the water right or rights for the original well or wells; (e) the replacement or additional well shall be located no closer than the original well to a well it might interfere with; (f) the department may specify an approved manner of construction of the well; and (g) the department shall require a showing of compliance with the conditions of this subsection (3).

(4) A certificate issued by the department under this chapter may not be revoked or diminished without specific statutory direction to do so unless:

(a) The water right represented by the certificate has been relinquished under chapter 90.14 RCW and the revocation or diminishment represents that relinquishment; or

(b) The certificate was issued with ministerial errors or was obtained through the misrepresentation of the completion of the project or the quantity appropriated. The department may adjust a certificate under this subsection (4)(b) if ministerial errors are discovered, but only to the extent necessary to correct the ministerial errors, and it may revoke a certificate or diminish the right represented by a certificate if the certificate has been obtained through such a misrepresentation. However, the authority provided by this subsection (4) does not include revoking, diminishing, or adjusting a certificate based on any change in policy regarding the issuance of such certificates occurring since the certificate was issued except as specifically directed by statute.

(5) As used in this section, the "location of the original well or wells" is the area described as the point of withdrawal in the original public notice published for the application for the water right for the well.

(6) The right to use water for any beneficial use within the general category of an agricultural use includes the right to use the water, without applying to the department or any other governmental entity for approval, for any other beneficial use within the general category of an agricultural use. The general category of an agricultural use of water includes, but is not limited to, the beneficial use of water for stock watering, agricultural irrigation, agricultural frost control, processing agricultural commodities into agricultural products, and other agricultural uses.

Sec. 19. RCW 90.03.330 and 1987 c 109 s 89 are each amended to read as follows:

(1) Upon a showing satisfactory to the department that any appropriation has been perfected in accordance with the provisions of this chapter, it shall be the duty of the department to issue to the applicant a certificate stating such facts in a form to be prescribed by him, and such certificate shall thereupon be recorded with the department. Any original water right certificate issued, as provided by this chapter, shall be recorded with the department and thereafter, at the expense of the party receiving the same, be by the department transmitted to the county auditor of the county or counties where the distributing system or any part thereof is located, and be recorded in the office of such county auditor, and thereafter be transmitted to the owner thereof.

(2) A certificate issued by the department under this chapter may not be revoked or diminished without specific statutory direction to do so unless:

(a) The water right represented by the certificate has been relinquished under chapter 90.14 RCW and the revocation or diminishment represents that relinquishment; or

(b) The certificate was issued with ministerial errors or was obtained through the misrepresentation of the completion of the project or the quantity appropriated. The department may adjust a certificate under this subsection (2)(b) if ministerial errors are discovered, but only to the extent necessary to correct the ministerial errors, and it may revoke a certificate or diminish the right represented by a certificate if the certificate has been obtained through such a misrepresentation. However, the authority provided by this subsection (2) does not include revoking, diminishing, or adjusting a certificate based on any change in policy regarding the issuance of such certificates occurring since the certificate was issued except as specifically directed by statute.