THE MINIMUM STREAM FLOW RESTORATION ACT

Section 1. Purpose.

It is the intent of the legislature to address competing needs for water, and to enhance the certainty and flexibility of water rights, by creating clear and direct connections between setting and achieving instream flows for wildlife and habitat and increased certainty and flexibility of water rights to meet the needs of local communities and the state’s economy.

Section 2. Findings.

The legislature finds that:

(A) The state 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) Securing water for streams to ensure the health of the state’s the natural resources and the watersheds on which they depend is of paramount importance to the state’s future. As the state’s population continues to grow, and demands on our limited water supplies increase, the state’s water management system needs to facilitate and ensure that adequate water is preserved in, or restored to, the streams in sufficient quantity to meet the needs of the state’s fisheries and related environmental resources.

(C) Conservation and water use efficiency programs, should be the preferred 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 reliable supplies for legitimate water demands; and

(D) The interests of the state 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.

(E) Healthy rivers contribute to the state’s economy and quality of life through tourism, fishing, recreation, education and other activities. In many areas, the economic return from instream values can exceed the value of consumptive water use.

Section 3. Definitions.

The words and terms defined in this act have the meanings ascribed to them in this and other sections.

(A) “Appropriate” or “appropriation” means the identification of a beneficial use and place of in-stream use of the waters of a stream. It shall not be construed to require any kind of physical structure or physical diversion from the stream;

(B) “Department” means the state department charged with regulation of the state’s water resources;

(C) “Director” means the director of said state department;

(D) “Flow-impaired” means any stream which does not meet the minimum stream flow level as set by the department;

(E) “Stream” means any lake, spring, creek, stream, river, segment thereof, or other natural body of standing or moving water which is subject to appropriation under the laws of the state of <insert state>;

(F) “Margin of safety” means the margin necessary for the reasonable protection of the beneficial uses of water;

(G) “Minimum stream flow” means the minimum flow of water in cubic feet per second of time or minimum lake level in feet above mean sea level, required to protect the fish and wildlife habitat, riparian habitat, channel forming requirements, aquatic life, recreation, aesthetic beauty, navigation, transportation, or water quality of a stream or aquifer in the public interest, at particular times of year and in particular year types;

(H) “Unappropriated water” means water which is not subject to diversion and use under any prior existing water right established by diversion and application to a beneficial use or by application, permit or license on file or issued by the director under the provisions of the state water code with a priority of water right date earlier than an application for appropriation of minimum stream flow filed under the provisions of this act.

(I) “Trust water right” means any water right acquired by the state under this chapter for management in the state’s trust water rights program.

(J) “Net water savings” means the amount of water that is determined to be conserved and usable within a specified stream reach or reaches for other purposes without impairment or detriment to 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.

(K) “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 the date of passage of this bill.

(L) “Instream flow” means flow that is expressly dedicated to remain in the stream channel.

(M) “Minimum stream flow shortfall” means the difference between stream flows that can be restored through acquisition of water, water conservation, and other measures outlined by the department, and the minimum stream flow as established by the department.

Section 4. Minimum stream flow evaluations – State-wide list of priorities.

(A) The department shall establish minimum water flows or levels for streams, lakes or other public waters for the purposes of protecting fish, game, birds or other wildlife resources, habitat, channel forming requirements, or recreational or aesthetic values of said public waters whenever it appears to be in the public interest to establish the same. These flows shall reflect seasonal and year-type variations, including (but not limited to) spring runoff. In addition, the department shall, when requested by the department of fish and wildlife to protect fish, game or other wildlife resources under the jurisdiction of the requesting state agency, or if the department finds it necessary to preserve water quality, establish such minimum flows or levels as are required to protect the resource or preserve the water quality described in the request or determination. Any request submitted by the department of fish and wildlife shall include a statement setting forth the need for establishing a minimum flow or level. When the department acts to preserve water quality, it shall include a similar statement with the proposed rule filed with the code reviser.

(B)

Section 5. Moratorium on diversions from flow-impaired reaches.

All applications for surface diversions from and ground water withdrawals in hydraulic continuity with flow-impaired reaches will be denied, unless and until there is clear evidence that flows have been restored to a level that meets water quality criteria and fully supports instream uses, plus a margin of safety.

Section 6. Regulation of Exempt Wells.

Well drilling otherwise exempt is prohibited where such drilling is in hydraulic continuity with any flow-impaired reach.

Section 7. Water use measurement.

Within six months from the passage of this bill, the department will develop a plan for implementing water use metering and reporting for all users of surface and groundwater, including exempt wells.

Section 8. Minimum Stream Flow declared Beneficial Use.

The legislature of the state of <insert state here> hereby declares that the public health, safety and welfare require that the streams of this state and their environments be protected against loss of water supply to preserve the minimum stream flows required for the protection of fish and wildlife habitat, aquatic life, recreation, aesthetic beauty, transportation and navigation values, and water quality. The preservation of the water of the streams of this state for such purposes when made pursuant to this act is necessary and desirable for all the inhabitants of this state, is in the public interest and is hereby declared to be a beneficial use of such water. The legislature further declares that minimum stream flow, and water expressly dedicated to instream flow for the purposes of achieving minimum streamflow are beneficial uses of water of the streams of this state for the purpose of protecting such waters from interstate diversion to other states or by the federal government for use outside the boundaries of the state.

Section 9. Guidelines governing trust water rights – Submission of guidelines to joint select committee.

The department, in cooperation with federally recognized Indian tribes, local governments, state agencies, nongovernmental organizations, and other interested parties, shall establish guidelines by six months from the date of passage of this bill governing the acquisition, administration, and management of trust water rights. The guidelines shall address at a minimum the following:

(A) Methods for determining the net water savings resulting from water conservation projects or programs carried out in accordance with this chapter, and other factors to be considered in determining the quantity or value of water available for potential designation as a trust water right;

(B) Criteria for determining the portion of net water savings to be conveyed to the state or nongovernmental organization under this chapter;

(C) Criteria for prioritizing water conservation projects;

(D) A description of potential public benefits that will affect consideration for state financial assistance;

(E) Procedures for providing notification to potentially interested parties;

(F) Criteria for the assignment of uses of trust water rights acquired in areas of the state not addressed in a regional water resource plan or critical area agreement; and

(G) Contracting procedures and other procedures not specifically addressed in this section.
These guidelines shall be submitted to the committee on water resource policy before adoption.

Section 10. Trust water rights program – Water right certificate – Notice of creation or modification.

(A) All trust water rights acquired by the state shall be placed in the state trust water rights program to be managed by the department. Trust water rights acquired by the state shall be held or authorized for use by the department for instream flows, irrigation, municipal, or other beneficial uses consistent with applicable regional plans for pilot planning areas, or to resolve critical water supply problems. The first priority of the trust water rights program shall be the maintenance of minimum stream flows as defined in Section 4 of this act.

(B) The department shall issue a water right certificate in the name of the state of <insert state> for each permanent trust water right conveyed to the state indicating the reach or reaches of the stream, the quantity, and the use or uses to which it may be applied. A superseding certificate shall be issued that specifies the amount of water the water right holder would continue to be entitled to as a result of the water conservation project. The superseding certificate shall retain the same priority date as the original right. For non-permanent conveyances, the department shall issue certificates or such other instruments as are necessary to reflect the changes in purpose or place of use or point of diversion or withdrawal.

(C) A trust water right retains the same priority date as the water right from which it originated, but as between them the trust right shall be deemed to be inferior in priority unless otherwise specified by an agreement between the state and the party holding the original right.

(D) Exercise of a trust water right may be authorized only if the department first determines that neither water rights existing at the time the trust water right is established, nor the public interest will be impaired. If impairment becomes apparent during the time a trust water right is being exercised, the department shall cease or modify the use of the trust water right to eliminate the impairment.

(E) Before any trust water right is created or modified, the department shall, at a minimum, require that a notice be published in a newspaper of general circulation published in the county or counties in which the storage, diversion, and use are to be made, and in other newspapers as the department determines is necessary, once a week for two consecutive weeks. At the same time the department shall send a notice containing pertinent information to all appropriate state agencies, potentially affected local governments and federally recognized tribal governments, and other interested parties.

(F) Subsections (D) and (E) of this section do not apply to a trust water right resulting from a donation for instream flows or to a trust water right lease if the period of the lease does not exceed five years. However, the department shall provide the notice described in subsection (E) of this section the first time the trust water right resulting from the donation is exercised.

Section 11. Contracts to finance water conservation projects – Public benefits – Trust water rights.

(A) For purposes of this chapter, the state may enter into contracts to provide moneys to assist in the financing of water conservation projects. In consideration for the financial assistance provided, the state shall obtain public benefits defined in guidelines developed under Section 9.

(B) If the public benefits to be obtained require conveyance or modification of a water right, the recipient of funds shall convey to the state the recipient’s interest in that part of the water right or claim constituting all or a portion of the resulting net water savings for deposit in the trust water rights program. The amount to be conveyed shall be finitely determined by the parties, in accordance with the guidelines developed under Section 9, before the expenditure of state funds. Conveyance may consist of complete transfer, lease contracts, or other legally binding agreements. When negotiating for the acquisition of conserved water or net water savings, or a portion thereof, the state may require evidence of a valid water right.

(C) As part of the contract, the water right holder and the state shall specify the process to determine the amount of water the water right holder would continue to be entitled to once the water conservation project is in place.

(D) The state shall cooperate fully with the United States in the implementation of this chapter. Trust water rights may be acquired through expenditure of funds provided by the United States and shall be treated in the same manner as trust water rights resulting from the expenditure of state funds. Federal funding shall be solicited whenever appropriate and applicable.

(E) If water is proposed to be acquired by or conveyed to the state as a trust water right by an irrigation district, evidence of the district’s authority to represent the water right holders shall be submitted to and for the satisfaction of the department.

(F) The state shall not contract with any person to acquire a water right served by an irrigation district without the approval of the board of directors of the irrigation district. Disapproval by a board shall be factually based on probable adverse effects on the ability of the district to deliver water to other members or on maintenance of the financial integrity of the district.

Section 12. Acquisition or donation of trust water rights.

(A)

(B) The department may make such other arrangements, including entry into contracts with other persons or entities as appropriate to ensure that trust water rights acquired in accordance with this chapter can be exercised to the fullest possible extent.

(C) The trust water rights may be acquired on a temporary or permanent basis.

(D) A water right donated under subsection (A)(2) of this section shall not exceed the extent to which the water right was exercised during the five years before the donation nor may the total of any portion of the water right remaining with the donor plus the donated portion of the water right exceed the extent to which the water right was exercised during the five years before the donation. A water right holder who believes his or her water right has been impaired by a trust water right donated under subsection (A)(2) of this section may request that the department review the impairment claim. If the department determines that exercising the trust water right resulting from the donation or exercising a portion of that trust water right donated under subsection (A)(2) of this section is impairing existing water rights in violation of state law, the trust water right shall be altered by the department to eliminate the impairment. A donated water right’s status as a trust water right under this subsection is not evidence of the validity or quantity of the water right.

(E) Any water right conveyed to the trust water right system as a gift that is expressly conditioned to limit its use to instream purposes shall be managed by the department for public purposes to ensure that it qualifies as a gift that is deductible for federal income taxation purposes for the person or entity conveying the water right.

(F) For a water right donated to or acquired by the trust water rights program on a temporary basis, the full quantity of water diverted or withdrawn to exercise the right before the donation or acquisition shall be placed in the trust water rights program and shall revert to the donor or person from whom it was acquired when the trust period ends.

Section 13. Flow-impaired streams – Restoration Actions.

(A) Once a stream has been declared flow-impaired, as not meeting the minimum stream flow as established by the department, the department must assume the responsibility of restoring stream flow to its minimum level.

(B) By six months from the date of passage of this bill, the department will have developed a set of guidelines for restoration of flow-impaired streams. These guidelines shall include (but not be limited to) the following methods of water right acquisition, in order of priority:

(C) Streams designated as “potentially flow-impaired” under the terms of Section 4 (B)(1) of this act are not subject to the terms of this section during the interim period between listing as “potentially flow-impaired” and establishment of minimum stream flow for each such stream or segment.

Section 14. Regulations.

The department shall adopt such regulations as are necessary to carry out the purposes of this Act.

Section 15. Agreements.

In carrying out the provisions of this Act, and in order to establish protection efforts across jurisdictions and ecosystems, the department may enter into agreements that are consistent with this Act with federal agencies, other state agencies, political subdivisions of the state or other states.

Section 16. Savings Clause.

If any provision of this Act is found to be invalid by a court of competent jurisdiction, such invalidity shall not affect the validity of the remaining provisions of this Act.

Section 17. Effective Date.

This Act shall take effect on <insert date here>.