BILL REQ. #:  S-1495.1 

Read first time 02/14/2005.   Referred to Committee on Water, Energy & Environment.

     AN ACT Relating to the trust water rights program; amending RCW 90.42.020 and 90.42.100; adding new sections to chapter 90.42 RCW; creating a new section; repealing RCW 90.38.005, 90.38.010, 90.38.020, 90.38.030, 90.38.040, 90.38.050, 90.38.900, 90.38.901, 90.38.902, 90.42.010, 90.42.030, 90.42.040, 90.42.050, and 90.42.080; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The legislature finds that the trust water rights program is an important tool to meet the state's current and future needs for water, both instream and out-of-stream. It is the intent of this act to enhance the effectiveness of the trust water rights program by clarifying and consolidating procedures for establishing trust water rights.

Sec. 2   RCW 90.42.020 and 1991 c 347 s 6 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Department" means the department of ecology.
     (2) "Impairment" means detriment or injury to existing rights as that phrase is used in RCW 90.03.380(1).
     (3) "Net water savings" means the amount of water that is determined to be conserved and usable ((within)) from a specified ((stream reach or reaches)) water body for other purposes without causing impairment ((or detriment)) to existing water rights ((existing at the time that a water conservation project is undertaken, reducing the ability to deliver water, or reducing the supply of water that otherwise would have been available to other existing water uses)).
     (((3))) (4) "Trust water program" means the program established under this chapter under which the department holds or manages trust water rights.
     (5) "Trust water right" means any water right ((acquired)) transferred to or managed by the state under this chapter ((for management in)) and the state's trust water rights program.
     (((4) "Pilot planning areas" means the geographic areas designated under RCW 90.54.045(2).
     (5))) (6) "Water conservation project" means any project or program that achieves physical or operational improvements that provide for increased water use efficiency in existing systems of diversion, conveyance, application, or use of water under water rights existing on July 28, 1991.

NEW SECTION.  Sec. 3   A new section is added to chapter 90.42 RCW to read as follows:
     (1) The department is authorized to acquire or manage existing water rights and to establish such water rights as trust water rights as provided under this chapter. A trust water right may be established on a temporary or permanent basis. A trust water right may be established only from an existing water right or portion thereof, to the extent the right has been applied to beneficial use, and only by appropriate means other than condemnation.
     (2) All trust water rights shall be held in trust by the department under the trust water program and each trust water right shall be managed for purposes for which the trust water right is transferred to the trust water program. Trust water rights may be held, managed, or authorized for use by the department for any beneficial use described in RCW 90.54.020(1). Trust water rights also may be managed for mitigation purposes, and for the reservation of water rights for future needs as provided under RCW 90.54.050.
     (3) The department shall manage trust water rights in accordance with the terms under which the trust water right was established, including any agreement between the parties executed at the time the trust water right was established, or as subsequently modified by mutual agreement of the parties.
     (4) The department may make arrangements, including entry into contracts with other persons or entities as appropriate, to ensure that trust water rights established in accordance with this chapter can be exercised to the fullest possible extent consistent with applicable state laws.
     (5) The department shall cooperate fully with the United States in the implementation of this chapter. Trust water rights established through expenditure of funds provided by the United States shall be treated in the same manner as trust water rights established through the expenditure of state funds.

NEW SECTION.  Sec. 4   A new section is added to chapter 90.42 RCW to read as follows:
     (1) To establish a permanent trust water right, the water right must be conveyed to the state of Washington. Title to a water right transferred to the trust water rights program on a temporary basis may remain the property of the water right holder while managed by the department in the trust water rights program, consistent with the terms established by a donor under subsection (3) of this section and with the terms of any mutual agreement between the water right holder and the department developed under section 3(3) of this act. Upon expiration of the period of time for which a temporary trust water right is established, the water right holder may resume use of the original water right with its original priority date, place of use, purpose of use, and point of diversion or withdrawal.
     (2)(a) Except as provided in (b) of this subsection or RCW 90.03.380(4), RCW 90.03.380 applies to trust water right transfers under this chapter.
     (b) Notwithstanding the provisions of RCW 90.03.380, the department shall establish expedited procedures for notice, opportunity for comment, and review for proposals to establish temporary trust water rights.
     (3) If a water right holder chooses to donate all or a portion of that water right to the trust water rights program to assist in providing instream flows on a temporary or permanent basis, the department may accept the donation on such terms as the water right holder may prescribe as long as the donation satisfies the applicable requirements of this chapter and other provisions of state law, and the terms prescribed are relevant and material to protecting any interest in the water right retained by the donor.
     (4) Where the state establishes a trust water right from a portion of an existing water right, only the portion of the right to be placed in the trust water rights program is subject to this chapter.
     (5) A trust water right established by the department through funding for a water conservation project may be established only for the period of time during which the conservation project is in effect. Before the expenditure of state funds for a water conservation project, the state and the water right holder must agree on the terms and duration of the trust water right transfer as a result of the conservation project.

NEW SECTION.  Sec. 5   A new section is added to chapter 90.42 RCW to read as follows:
     No state funds may be expended to acquire trust water rights by the state under this chapter unless specifically appropriated for this purpose by the legislature. Before expending state or federal funds for a trust water right, the department shall exercise appropriate due diligence to ensure the validity and extent of the water right or portion thereof for which the funds will be expended.

NEW SECTION.  Sec. 6   A new section is added to chapter 90.42 RCW to read as follows:
     A water right conveyed to the trust water rights program as a donation that is expressly conditioned to limit its use to instream purposes must be managed by the department for public purposes to ensure that it qualifies as a donation that is deductible for federal income taxation purposes for the person conveying the water right.

NEW SECTION.  Sec. 7   A new section is added to chapter 90.42 RCW to read as follows:
     The water right relinquishment provisions of RCW 90.14.130 through 90.14.230 do not apply to a trust water right as of the date the trust water right is established.

NEW SECTION.  Sec. 8   A new section is added to chapter 90.42 RCW to read as follows:
     (1) When a water right or portion thereof is proposed to be transferred to the department as a trust water right by an irrigation district, evidence of the district's authority to represent the water right holders must be submitted to the department.
     (2) If a water right is appurtenant to land located within an irrigation district, the department may not establish a trust water right without the approval of the board of directors of the irrigation district.

Sec. 9   RCW 90.42.100 and 2003 c 144 s 2 are each amended 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, including the issuance of new water rights that, in combination with water rights held in the trust water rights program for water banking purposes, would not decrease total water supply available in the Yakima basin.
     (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 RCW 90.42.135, "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. 10   The following acts or parts of acts are each repealed:
     (1) RCW 90.38.005 (Findings -- Purpose) and 1989 c 429 s 1;
     (2) RCW 90.38.010 (Definitions) and 1989 c 429 s 2;
     (3) RCW 90.38.020 (Acquisition or donation of trust water rights) and 2002 c 329 s 7, 2001 c 237 s 28, & 1989 c 429 s 3;
     (4) RCW 90.38.030 (Water conservation projects -- Contracts for financial assistance) and 1989 c 429 s 4;
     (5) RCW 90.38.040 (Trust water rights program) and 2001 c 237 s 29, 1994 c 264 s 90, & 1989 c 429 s 5;
     (6) RCW 90.38.050 (Rules) and 1989 c 429 s 6;
     (7) RCW 90.38.900 (Existing policies not replaced) and 1989 c 429 s 7;
     (8) RCW 90.38.901 (Transfer of rights between irrigation districts not intended) and 1989 c 429 s 8;
     (9) RCW 90.38.902 (Existing rights not impaired) and 1989 c 429 s 9;
     (10) RCW 90.42.010 (Findings -- Intent) and 1998 c 245 s 173;
     (11) RCW 90.42.030 (Contracts to finance water conservation projects -- Public benefits -- Trust water rights) and 1993 c 98 s 2 & 1991 c 347 s 7;
     (12) RCW 90.42.040 (Trust water rights program -- Water right certificate -- Notice of creation or modification) and 2002 c 329 s 8, 2001 c 237 s 30, 1993 c 98 s 3, & 1991 c 347 s 8;
     (13) RCW 90.42.050 (Guidelines governing trust water rights--Submission of guidelines to joint select committee) and 1991 c 347 s 9; and
     (14) RCW 90.42.080 (Trust water rights -- Acquisition, donation, exercise, and transfer -- Appropriation required for expenditure of funds) and 2002 c 329 s 9, 2001 c 237 s 31, 1993 c 98 s 4, & 1991 c 347 s 12.

NEW SECTION.  Sec. 11   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 12   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.