READ FIRST TIME 03/05/03.   

     AN ACT Relating to authorizing water banking within the trust water program; amending RCW 90.42.005; adding new sections to chapter 90.42 RCW; creating a new section; and declaring an emergency.

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

Sec. 1   RCW 90.42.005 and 1991 c 347 s 1 are each amended to read as follows:
     (1) It is the policy of the state of Washington to recognize and preserve water rights in accordance with RCW 90.03.010.
     (2) The legislature finds that:
     (a) The state of Washington is faced with a shortage of water with which to meet existing and future needs, particularly during the summer and fall months and in dry years when the demand is greatest;
     (b) Consistent with RCW 90.54.180, issuance of new water rights, voluntary water transfers, and conservation and water use efficiency programs, including storage, ((should be the preferred)) all are acceptable methods of addressing water uses because they can relieve current critical water situations, provide for presently unmet needs, and assist in meeting future water needs. Presently unmet needs or current needs includes the water required to increase the frequency of occurrence of base or minimum flow levels in streams of the state, the water necessary to satisfy existing water rights, or the water necessary to provide full supplies to existing water systems with current supply deficiencies; ((and))
     (c) The interests of the state and its citizens will be served by developing programs and regional water resource plans, in cooperation with local governments, federally recognized tribal governments, appropriate federal agencies, private citizens, and the various water users and water interests in the state, that increase the overall ability to manage the state's waters in order to resolve conflicts and to better satisfy both present and future needs for water; and
     (d) Water banking as a function of the trust water program and as authorized by this chapter can provide an effective means to facilitate the voluntary transfer of water rights established through conservation, purchase, lease, or donation, to preserve water rights and provide water for presently unmet and future needs; and to achieve a variety of water resource management objectives throughout the state, including drought response, improving streamflows on a voluntary basis, providing water mitigation, or reserving water supply for future uses.

NEW SECTION.  Sec. 2   A new section is added to chapter 90.42 RCW to read as follows:
     (1) The department is hereby authorized to use the trust water rights program in the Yakima river basin for water banking purposes.
     (2) Water banking may be used for one or more of the following purposes:
     (a) To authorize the use of trust water rights to mitigate for water resource impacts, future water supply needs, or any beneficial use under chapter 90.03, 90.44, or 90.54 RCW, consistent with any terms and conditions established by the transferor, except that return flows from water rights authorized in whole or in part for any purpose shall remain available as part of the Yakima basin's total water supply available and to satisfy existing rights for other downstream uses and users;
     (b) To document transfers of water rights to and from the trust water rights program; and
     (c) To provide a source of water rights the department can make available to third parties on a temporary or permanent basis for any beneficial use under chapter 90.03, 90.44, or 90.54 RCW.
     (3) The department shall not use water banking to:
     (a) Cause detriment or injury to existing rights;
     (b) Issue temporary water rights or portions thereof for new potable uses requiring an adequate and reliable water supply under RCW 19.27.097;
     (c) Administer federal project water rights, including federal storage rights; or
     (d) Allow carryover of stored water from one water year to another water year.
     (4) For purposes of this section and section 6 of this act, "total water supply available" shall be defined as provided in the 1945 consent decree between the United States and water users in the Yakima river basin, and consistent with later interpretation by state and federal courts.

NEW SECTION.  Sec. 3   A new section is added to chapter 90.42 RCW to read as follows:
     (1) The department, with the consent of the water right holder, may identify trust water rights for administration for water banking purposes, including trust water rights established before the effective date of this section.
     (2) An application to transfer a water right to the trust water program shall be reviewed under RCW 90.03.380 at the time the water right is transferred to the trust water program for administration for water banking purposes, and notice of the application shall be published by the applicant as provided under RCW 90.03.280. The application must indicate the reach or reaches of the stream where the trust water right will be established before the transfer of the water right or portion thereof from the trust water program, and identify reasonably foreseeable future temporary or permanent beneficial uses for which the water right or portion thereof may be used by a third party upon transfer from the trust water right program. In the event the future place of use, period of use, or other elements of the water right are not specifically identified at the time of the transfer into the trust water program, another review under RCW 90.03.380 will be necessary at the time of a proposed transfer from the trust water program.

NEW SECTION.  Sec. 4   A new section is added to chapter 90.42 RCW to read as follows:
     (1) The department shall transfer a water right or portion thereof being administered for water banking purposes from the trust water program to a third party upon occurrence of all of the following:
     (a) The department receives a request for transfer of a water right or portion thereof currently administered by the department for water banking purposes;
     (b) The request is consistent with any previous review under RCW 90.03.380 of the water right and future temporary or permanent beneficial uses;
     (c) The request is consistent with any condition, limitation, or agreement affecting the water right, including but not limited to any trust water right transfer agreement executed at the time the water right was transferred to the trust water rights program; and
     (d) The request is accompanied by and is consistent with an assignment of interest or portion thereof from a person or entity retaining an interest in the trust water right or portion thereof to the party requesting transfer of the water right or portion thereof.
     (2) The priority date of the water right or portion thereof transferred by the department from the trust water program for water banking purposes shall be the priority date of the underlying water right.
     (3) The department shall issue documentation for that water right or portion thereof to the new water right holder based on the requirements applicable to the transfer of other water rights from the trust water rights program. Such documentation shall include a description of the property to which the water right will be appurtenant after the water right or portion thereof is transferred from the trust water program to a third party.
     (4) The department's decision on the transfer of a water right or portion thereof from the trust water program for water banking purposes may be appealed to the pollution control hearings board under RCW 43.21B.230, or to a superior court conducting a general adjudication under RCW 90.03.210.

NEW SECTION.  Sec. 5   A new section is added to chapter 90.42 RCW to read as follows:
     (1) The department shall seek input from agricultural organizations, federal agencies, tribal governments, local governments, watershed groups, conservation groups, and developers on water banking, including water banking procedures and identification of areas in Washington state where water banking could assist in providing water supplies for instream and out-of-stream uses. The department shall summarize any comments received on water banking and submit a report, including any recommendations, to the appropriate committees of the legislature for their consideration in the subsequent legislative session.
     (2) By December 31st of every even-numbered year, the department shall submit a report to the appropriate committees of the legislature on water banking activities authorized under section 2 of this act. The report shall:
     (a) Evaluate the effectiveness of water banking in meeting the policies and objectives of this chapter;
     (b) Describe any statutory, regulatory, or other impediments to water banking in other areas of the state; and
     (c) Identify other basins or regions that may benefit from authorization for the department to use the trust water program for water banking purposes.

NEW SECTION.  Sec. 6   A new section is added to chapter 90.42 RCW to read as follows:
     Nothing in this act shall:
     (1) Cause detriment or injury to existing rights or to the operation of the federal Yakima project to provide water for irrigation purposes, existing water supply contracts, or existing water rights;
     (2) Diminish in any way existing rights or the total water supply available for irrigation and other purposes in the Yakima basin;
     (3) Affect or modify the authority of a court conducting a general adjudication pursuant to RCW 90.03.210; or
     (4) Affect or modify the rights of any person or entity under a water rights adjudication or under any order of the court conducting a water rights adjudication.

NEW SECTION.  Sec. 7   Nothing in this act may be construed to:
     (1) Affect or modify any treaty or other federal rights of an Indian tribe, or the rights of any federal agency or other person or entity arising under state or federal law;
     (2) Affect or modify the rights or jurisdictions of the United States, the state of Washington, the Yakama Nation, or other person or entity over waters of any river or stream or over any ground water resource;
     (3) Alter, amend, repeal, interpret, modify, or be in conflict with any interstate compact made by the states;
     (4) Alter, establish, or impair the respective rights of states, the United States, the Yakama Nation, or any other person or entity with respect to any water or water-related right;
     (5) Alter, diminish, or abridge the rights and obligations of any federal, state, or local agency, the Yakama Nation, or other person or entity;
     (6) Affect or modify the rights of the Yakama Indian Nation or its successors in interest to, and management and regulation of, those water resources arising or used, within the external boundaries of the Yakama Indian Reservation;
     (7) Affect or modify the settlement agreement between the United States and the state of Washington filed in Yakima county superior court with regard to federal reserved water rights other than those rights reserved by the United States for the benefit of the Yakama Indian Nation and its members; or
     (8) Affect or modify the rights of any federal, state, or local agency, the Yakama Nation, or any other person or entity, public or private, with respect to any unresolved and unsettled claims in any water right adjudications, or court decisions, including State v. Acquavella, or constitute evidence in any such proceeding in which any water or water-related right is adjudicated.

NEW SECTION.  Sec. 8   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.