AN ACT Relating to water conservation projects and reallocation of saved water in the Yakima river basin; amending RCW 90.03.380 and 90.14.140; and adding a new section to chapter 90.03 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 90.03 RCW to read as follows:

(1) For purposes of this section, the following definitions shall apply:

"Conservation project" means any physical or operational improvements in existing systems for diversion, conveyance, and application of water under existing water rights.

"Public funds" means state or federal funds expended to acquire water rights by direct purchase or by financing water conservation projects.

"Saved water" means the portion of existing water rights conserved as a direct result of the investment of public funds in conservation improvements.

(2) Within the Yakima river basin, the department may acquire all or portions of existing water rights by direct purchase, receiving donations, or the investment of public funds in water conservation projects that result in saved water. The department may enter contracts with water users within the basin to expend public funds for conservation projects resulting in saved water. The contract shall identify the amount of water to be saved and shall commit the water user to transfer the saved water to the state of Washington. Water rights so acquired shall be placed in a Yakima river basin water trust account, hereby created, to be managed by the department.

(3) The department shall cooperate fully with the United States in financing conservation projects, including entering contracts with the United States and water users. Saved water resulting from expenditure of public funds provided by the United States shall be treated in the same manner as provided in this section for saved water resulting from the expenditure of state funds.

(4) Prior to entering a contract for a conservation project as specified in subsection (2) of this section, the department shall determine to its satisfaction the probable extent of the users existing water rights, the probable priority date of the rights available for acquisition, and likelihood of such right being affirmed by a general adjudication of water rights.

(5) Trust water shall be utilized for public purposes including supplementing instream flows and supplementing irrigation water during drought years.

(6) The department shall issue certificates of change, under RCW 90.03.380, for the acquired water rights in the name of the state of Washington. The change certificate shall specify the purposes of use as supplemental instream flow and supplemental irrigation supply.

(7) Water rights placed in the water trust account shall retain their original priority date, but shall not be limited to the original purpose or place of use or point of diversion or withdrawal. Acquired water rights placed in the water trust account shall continue to enjoy the same storage privileges and priority as existed prior to acquisition.

(8) The customary requirement for a diversion or other physical works is expressly waived for water rights acquired for the water trust account.

(9) Water rights placed in the trust account are not subject to relinquishment due to nonuse.

(10) In times of water shortage, the water rights in the trust account shall be divided equally between supplemental instream flow and supplemental irrigation supply. If a full equal share is not needed for one of these uses, a greater share may be allocated to the other use.

(11) The department shall assist the United States bureau of reclamation in tracking the balance of water within the water trust account.

(12) Nothing in this section shall impair any existing water rights. The agreement of any water user to participate in water conservation efforts resulting in saved water shall not affect any claim to water rights except to the extent specified in the contract between the user and the department. Nor shall the agreement of the state of Washington to participate in a conservation project be interpreted as supporting the validity of any claim. The result of any investigation by the department under subsection (4) of this section shall not be used as evidence regarding the validity of any claim to water rights in a general adjudication of water rights.

Sec. 2. Section 39, chapter 117, Laws of 1917 as last amended by section 94, chapter 109, Laws of 1987 and RCW 90.03.380 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 said 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. 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 said application shall not be granted until notice of said application shall be 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) Any water right that is changed from an out-of-stream to an instream purpose under section 1 of this act shall become appurtenant to the channel of the stream so benefited. No fees shall be assessed for processing such changes from an out-of-stream to an instream purpose.

Sec. 3. Section 14, chapter 233, Laws of 1967 as amended by section 1, chapter 125, Laws of 1987 and RCW 90.14.140 are each 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 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;

(d) The operation of legal proceedings;

(e) 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.

(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, or

(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, or

(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, or

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

(e) If such waters are not subject to appropriation under the applicable provisions of RCW 90.40.030 as now or hereafter amended, or

(f) If such right is included in the Yakima river basin water trust account established by section 1 of this act.