BILL REQ. #:  S-3081.2 

Read first time 05/25/11.   Referred to Committee on Environment, Water & Energy.

     AN ACT Relating to reforming water resource management through streamlining the administration of water rights and providing for funding; amending RCW 90.14.130, 90.14.140, 90.14.200, and 90.03.255; reenacting and amending RCW 90.14.140; adding new sections to chapter 90.03 RCW; adding new sections to chapter 90.42 RCW; creating a new section; providing an effective date; and providing an expiration date.

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

NEW SECTION.  Sec. 101   The legislature finds that access to water is fundamental to a robust economy. The legislature further finds that in order to ensure that water is accessible to public and private interests, the state needs to clarify the statutes governing water management in order to process water right applications in a more timely way and to ensure that information used to process water right applications is available and accurate.
     The legislature further finds that improvements to water management will reduce costs to the public as well as water right holders and benefit the state's economy as well as the needs of instream and out-of-stream interests.
     The legislature further finds that additional certainty will be achieved by clarifying and simplifying the extent to which water usage records must be retained and by providing clearly articulated policies for efficient and fair administration of the water resource statutes.
     The legislature further finds that this clarification and simplification will ensure all interests are equally protected because it will be based on contemporary beneficial use and accurate assessment of potential impacts on other water right holders as well as the resource in general. The legislature intends to encourage the use of changes and transfers of existing water rights to satisfy future water needs.
     Therefore, the legislature declares that reform to the water resource management system will provide certainty, clarity, and efficiency in the system, and help ensure a healthy state economy.

Sec. 201   RCW 90.14.130 and 1987 c 109 s 13 are each amended to read as follows:
     (1) When it appears to the department of ecology that a person entitled to the use of water has not beneficially used ((his)) the person's water right or some portion thereof, and it appears that said right has or may have reverted to the state because of such nonuse, as provided by RCW 90.14.160, 90.14.170, or 90.14.180, the department of ecology shall notify such person by order: PROVIDED, That where a company, association, district, or the United States has filed a blanket claim under the provisions of RCW 90.14.060 for the total benefits of those served by it, the notice shall be served on such company, association, district or the United States and not upon any of its individual water users who may not have used the water or some portion thereof which they were entitled to use. The order shall contain: (((1))) (a) A description of the water right, including the approximate location of the point of diversion, the general description of the lands or places where such waters were used, the water source, the amount involved, the purpose of use, and the apparent authority upon which the right is based; (((2))) (b) a statement that unless sufficient cause ((be)) is shown on appeal the water right will be declared relinquished; and (((3))) (c) a statement that such an order may be appealed to the pollution control hearings board. Any person aggrieved by such an order may appeal it to the pollution control hearings board pursuant to RCW 43.21B.310. The order shall be served by registered or certified mail to the last known address of the person and be posted at the point of division or withdrawal. The order by itself shall not alter the recipient's right to use water, if any.
     (2) Notwithstanding any other provisions of this chapter, there is no relinquishment of any water right if the end of the period of nonuse of such a right occurred more than twenty years before the date upon which an order is issued under this section as of the effective date of this section.

Sec. 202   RCW 90.14.140 and 2009 c 183 s 14 are each amended to read as follows:
     (1) For the purposes of RCW 90.14.130 through 90.14.180, the following constitute "sufficient cause" ((shall be defined as)) for the nonuse of all or a portion of the water by the owner of a water right ((for a period of five or more consecutive years where such nonuse occurs as a result of)):
     (a) Drought, or other unavailability of water;
     (b) Active service in the armed forces of the United States during military crisis;
     (c) Nonvoluntary service in the armed forces of the United States;
     (d) The operation of legal proceedings;
     (e) 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) 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 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) 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) 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;
     (j) 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) The reduced use of irrigation water resulting from crop rotation. For purposes of this subsection, crop rotation means the temporary 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.
     (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;
     (h) If such right is a trust water right under chapter 90.38 or 90.42 RCW;
     (i) If such a right is involved in an approved local water plan created under RCW 90.92.090, provided the right is subject to an agreement not to divert under RCW 90.92.050, or provided the right is banked under RCW 90.92.070; or
     (j) If the end of the period of nonuse of such a right occurred more than twenty years before the date: (i) Upon which an order is issued under RCW 90.14.130; (ii) of filing of the department's report of findings under RCW 90.03.640; or (ii) of a final decision by the department or a water conservancy board on an application for change or transfer of a water right under RCW 90.03.380 or 90.44.100.
     (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. 203   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, the following constitute "sufficient cause" ((shall be defined as)) for the nonuse of all or a portion of the water by the owner of a water right ((for a period of five or more consecutive years where such nonuse occurs as a result of)):
     (a) Drought, or other unavailability of water;
     (b) Active service in the armed forces of the United States during military crisis;
     (c) Nonvoluntary service in the armed forces of the United States;
     (d) The operation of legal proceedings;
     (e) 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) 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 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) 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) 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;
     (j) 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) The reduced use of irrigation water resulting from crop rotation. For purposes of this subsection, crop rotation means the temporary 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.
     (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; or
     (i) If the end of the period of nonuse of such a right occurred more than twenty years before the date: (i) Upon which an order is issued under RCW 90.14.130; (ii) of filing of the department's report of findings under RCW 90.03.640; or (iii) of a final decision by the department or a water conservancy board on an application for change or transfer of a water right under RCW 90.03.380 or 90.44.100.
     (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. 204   RCW 90.14.200 and 1989 c 175 s 180 are each amended to read as follows:
     (1) All matters relating to the implementation and enforcement of this chapter by the department of ecology shall be carried out in accordance with chapter 34.05 RCW, the administrative procedure act, except where the provisions of this chapter expressly conflict with chapter 34.05 RCW. Proceedings held pursuant to RCW 90.14.130 are adjudicative proceedings within the meaning of chapter 34.05 RCW. Final decisions of the department of ecology in these proceedings are subject to review in accordance with chapter 43.21B RCW.
     (2) RCW 90.14.130 provides nonexclusive procedures for determining a relinquishment of water rights under RCW 90.14.160, 90.14.170, and 90.14.180. RCW 90.14.160, 90.14.170, and 90.14.180 may be applied in, among other proceedings, general adjudication proceedings initiated under RCW 90.03.110 or 90.44.220((: PROVIDED, That)). Notwithstanding any other provisions of this chapter, there is no relinquishment of any water right if the end of the period of nonuse of such a right occurred more than twenty years before the date of filing of the department's report of findings under RCW 90.03.640 or the date of a final decision by the department or a water conservancy board on an application for change or transfer of a water right under RCW 90.03.380 or 90.44.100.
     (3) Nothing ((herein)) in this section shall apply to litigation involving determinations of the department of ecology under RCW 90.03.290 relating to the impairment of existing rights.

NEW SECTION.  Sec. 205   A new section is added to chapter 90.03 RCW to read as follows:
     (1) Sections 201 through 204 of this act do not apply to water right determinations issued by a superior court in a general adjudication that is pending as of the effective date of this section. Upon the entry of a final decree by a superior court in a general adjudication, sections 201 through 204 of this act apply to subsequent relinquishment orders under RCW 90.14.130 and decisions on applications for changes, transfers, or amendments of water rights under RCW 90.03.380 or 90.44.100.
     (2) Sections 201 through 204 of this act do not apply to relinquishment orders entered prior to the effective date of this section under RCW 90.14.130 or to final decisions issued prior to the effective date of this section by the department on applications for changes, transfers, or amendments of water rights under RCW 90.03.380 or 90.44.100.
     (3) Sections 201 through 204 of this act do not apply to orders of the pollution control hearings board entered prior to the effective date of this section in appeals of relinquishment orders under RCW 90.14.130 or decisions on applications for changes, transfers, or amendments of water rights under RCW 90.03.380 or 90.44.100.

Sec. 301   RCW 90.03.255 and 1997 c 360 s 2 are each amended to read as follows:
     (1) The department shall, when evaluating an application for a water right, transfer, or change filed pursuant to RCW 90.03.250 or 90.03.380 that includes provision for any water impoundment or other resource management technique, take into consideration the benefits and costs, including environmental effects, of any water impoundment or other resource management technique that is included as a component of the application. The department's consideration shall extend to any increased water supply that results from the impoundment or other resource management technique, including but not limited to any recharge of groundwater that may occur, as a means of making water available or otherwise offsetting the impact of the diversion of surface water proposed in the application for the water right, transfer, or change. Provision for an impoundment or other resource management technique in an application shall be made solely at the discretion of the applicant and shall not otherwise be made by the department as a condition for approving an application that does not include such provision.
     (2) The department shall not deny an application for a new water right or change, transfer, or amendment of a water right based on the presumption that an instream flow trust water right established as mitigation for the water right application may be diverted by junior water right holders.
     (3) This section does not lessen, enlarge, or modify the rights of any riparian owner, or any existing water right acquired by appropriation or otherwise.

NEW SECTION.  Sec. 302   A new section is added to chapter 90.42 RCW to read as follows:
     (1) Upon permanently acquiring a water right under a permit, certificate, or claim in the trust water rights program for instream flow purposes, the department may file suit in superior court to protect its water right from impairment. In any such action by the department, the court shall join only those parties holding water rights with priority dates junior in time to the trust water right, whose diversion or withdrawal of water is alleged by the department to be impairing the trust water right. Prior to filing such an action, the department shall comply with the procedures of RCW 90.03.605.
     (2)(a) If the court concludes that any permit, certificate, or claim is causing impairment of the department's trust water right, the court shall issue an order enabling the department to regulate the permits, certificates, or claims to prevent impairment of the trust water right.
     (b) After the court has issued an order under (a) of this subsection, and after all appeals have been exhausted, the department may issue a notice and order, consistent with its authority under RCW 43.27A.190, to protect a permanent instream flow trust water right from impairment. The department may serve a notice and order claiming impairment upon the holder of a permit, certificate, or claim that is subject to the court's order.
     (c) Any water right holder may appeal the notice and order issued by the department under (b) of this subsection to the pollution control hearings board under chapter 43.21B RCW.

NEW SECTION.  Sec. 401   A new section is added to chapter 90.03 RCW to read as follows:
     (1) Notwithstanding any other provision of law, a person other than the permit applicant who wishes to protest a decision of the department must pay a protest fee of five hundred dollars in addition to the appropriate fee required under RCW 90.03.470(11).
     (2) Except for the applicant, for any party who appeals a decision made by the department by filing an appeal with the pollution control hearings board under chapter 43.21B RCW, a fee of one thousand dollars is required.
     (3) All fees collected under this section must be paid to the department and deposited into the water rights processing account under RCW 90.03.650.

NEW SECTION.  Sec. 501   A new section is added to chapter 90.03 RCW to read as follows:
     (1)(a) The department shall process all water right applications pending as of the effective date of this section by July 1, 2021, except as provided in subsection (3) of this section.
     (b) As used in this subsection, water right applications include: (i) Applications for a new appropriation; (ii) transfers, changes, or amendments to existing permits, water right or storage certificates, or claimed rights; and (iii) applications for water use mitigation credits issued as a result of water banking.
     (2) By December 31, 2011, the department shall provide the legislature with a schedule, by water resource inventory area or source of water, showing where and when the department will process water right applications between the effective date of this section and July 1, 2021.
     (3) By July 1, 2017, the department shall provide all applicants with permit applications pending as of the effective date of this section with the opportunity to be processed by the department either individually or pursuant to a coordinated cost-reimbursement agreement. If an applicant is offered the opportunity to be processed by the department prior to July 1, 2017, but declines, the department may limit future processing of that application to either the cost-reimbursement process pursuant to RCW 90.03.265 or require the applicant to submit the applicant's own draft report of examination at such time the applicant is prepared to have the applicant's water right application processed.
     (4) The department shall conduct a comprehensive review of its water right application review procedures, with the objective of simplifying the procedures, eliminating unnecessary steps, and decreasing the time required to fully process an application from filing through a final decision. The department shall seek recommendations from a diverse group of stakeholders and government representatives familiar with the department's water right processing and water resource management activities and provide stakeholders an opportunity to comment upon proposals for administrative or legislative changes to simplify procedures.
     (5) The department shall implement changes to improve water right processing for which it has current administrative authority by January 1, 2012.
     (6)(a) The department shall provide a report to the legislature, consistent with RCW 43.01.036, by December 31, 2011, and shall supplement and update the report every even-numbered year thereafter to document continuing process improvements.
     (b) The report must summarize:
     (i) The review conducted;
     (ii) The proposals considered by the department, including those forwarded by stakeholders;
     (iii) The changes implemented; and
     (iv) Recommendations for any legislation necessary to implement additional changes.

NEW SECTION.  Sec. 502   A new section is added to chapter 90.03 RCW to read as follows:
     The department shall establish and maintain up-to-date records of the entities that hold water rights and claimed rights. It is the responsibility of all water right holders and claimants to inform the department when there is a change in ownership or contact information. The department shall make forms available, including electronically, for use by persons reporting a change in this information.

NEW SECTION.  Sec. 503   A new section is added to chapter 90.42 RCW to read as follows:
     After notice and opportunity for public hearing, the department may issue general permits on a watershed or subwatershed basis for new uses of water relying on water rights accepted into the trust water rights program. Any general permit issued shall: (1) Be based on requirements adopted by the department under chapter 173-539A WAC as it exists on the effective date of this section; and (2) set forth the requirements and standards that apply to any activity authorized by such a general permit.

NEW SECTION.  Sec. 601   Section 202 of this act expires June 30, 2019.

NEW SECTION.  Sec. 602   Section 203 of this act takes effect June 30, 2019.