What is a Water Bank?
A “water bank” is a depository into which a person or entity may transfer a water right, for use by that person or entity—or another person or entity—at the same time or in the future, and at the same place or a different place. Water banks exist in most western states, each crafted to meet the needs of the water right holder and new water uses.
The attorneys at Mentor Law Group have worked on behalf of senior water right holders to create water banks in the State of Washington. Water banking in Washington is generally administered through the State Trust Water Right Program. Under Chapter 90.42 RCW, the Washington State Department of Ecology may hold water rights “in trust”. RCW 90.42.100, states that the state’s Trust Water Right Program can be used “[t]o 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.”
Case Study: Upper Kittitas County
On July 16, 2009, the Washington State Department of Ecology (Ecology) adopted an emergency rule limiting new uses of water in upper Kittitas County. Ecology adopted the rule to prevent new uses of water that would negatively affect surface water flows and existing water rights in the Yakima River and its tributaries. Ecology’s rule states “All unmitigated withdrawals that began after May 10, 1905, may be subject to future curtailment due to conflicts with senior water rights.” All unmitigated users are advised to obtain mitigation through senior trust water rights to avoid such curtailment. (WAC 173-539A-027).
On December 22, 2010, Ecology adopted a permanent rule for managing groundwater resources in upper Kittitas County. (Chapter 173-539A WAC). Ecology’s permanent rule became effective on January 22, 2011. The Upper Kittitas County Groundwater Rule allows new uses of water if they are “water budget neutral.” Ecology’s rule defines “water budget neutral” as an appropriation or project where withdrawals of public groundwater are exchanged for other water rights into the trust water right program that are at least equivalent to the amount of consumptive use, according to the Kittitas groundwater rule. WAC 173-539A-030; See also Dept. of Ecology Water Resources Program, Priority Processing – Water Budget Neutral Projects, POL 1021 (2004).
To be considered water budget neutral, a new user must mitigate their project’s new use with an interest in a senior water right. Most new groundwater users in the Upper Kittitas County area do not have ownership of senior water rights, therefore, the new user must enter a contract with a senior water right holder for mitigation water. Senior water rights are those that have been transferred to the State Trust Water Right Program and remain instream to be used to mitigate for new uses. By mitigating a new use with a senior water right, or “water banking”, a new user is considered “water budget neutral” and authorized to establish a new use of water under the rule.
In 2009, on behalf of Suncadia Resort, Mentor Law Group developed one of the first water banks in the Yakima River Basin. Since opening Suncadia’s water banking program in 2010, Mentor Law Group has successfully processed water bank transactions for more than 400 parcels. Mentor Law Group continues to pursue water banking options for areas where finding mitigation water has proved a challenge.