Washington State Water Rights & Water Supply Law bill@clarke-law.net (360) 561-7540

Overview of Today’s Topics - State Water Law & Water Availability Requirements - Exempt Wells - Water Supply from Existing Water Systems - Changes & Transfers of Water Rights - The “Hirst Decision” and 2018 Legislation - Real Estate Examples - Local Water Rights and Water Availability Issues

Disclaimer ● This class is not legal advice. ● Water rights issues often involve complicated legal and technical issues so obtain qualified legal or other specialized advice when needed.

Water Law = Land Use Law

Local Government Water Availability Requirements RCW 58.17.110 – Subdivision Act RCW 19.27.097 – State Building Code Applicant must show local government proof of adequate potable water supply. Some local governments have specific local ordinances, others follow the state statute.

What is Adequate Legal Potable Water Supply? - Water must be both physically and legally available - Water must be legal both in its quality and quantity - Cannot be temporary, or an “application” for water - Consistent with state law, Ecology’s regulations, and 2018 Hirst Legislation (SB 6091) as to exempt wells - Local government water availability decision is appealable under the Land Use Petition Act (LUPA)

Water Law - A Brief Lesson in U.S. History

Western Water Law Fundamentals 1. Prior Appropriation: “First in Time is First in Right” 2. Relinquishment: “Use it or Lose It” 3. Beneficial Use of Water Required: Cannot speculate or waste; actual beneficial use, or due diligence required 4. No Impairment: A junior water use cannot impair a senior water use

Western Water Law – Not An “Environmental” Law Western water law: Incentivize the early and continuous use of water for consumptive uses, without regard to instream values or the need to “share” the resource in times of shortage. Non-use of water (even for good reasons) can result in forfeiture of water rights. Other environmental laws: Clean Air Act, Clean Water Act, State Environmental Policy Act, . . . ) created to protect the environment or to balance environmental and development interests.

Tribal Water Rights Federal reservations of land include an implied reservation of water rights, with a priority date of the date of the land reservation: (Indian reservations, Military bases, National Parks) Stevens Treaties (1854-1855) include both an on- reservation implied water right for reservation purposes, and an off-reservation water right necessary to fulfill the purpose of the “fishing clause” in the treaties. The priority date of the off-reservation water right is “time immemorial” Tribal off-reservation instream flow water rights have generally not been quantified in Washington State.

Key State Water Laws – A Very Brief Chronology Pre-1917: Water Rights Under Common Law 1917: State Surface Water Code adopted 1945: State Ground Water Code adopted 1969-71: Instream Flow and Water Resource Acts adopted 1970-80s: 1st Generation Instream Flow Rules 1990s: Ecology/Courts: Groundwater = Surface Water 1992: Local Government Water Availability statute adopted 2000s: 2nd Generation “Water Management Rules” 2016-18: Hirst Decision and Legislative Response (SB 6091)

Groundwater & Surface Water

Where Do You Need Your Water?

Areas Served By Water Systems ● Municipal Water Law of 2003 ● Water systems have a “duty to serve” water in a “timely and reasonable manner.” ● Applies to systems > 15 connections, regardless of type of ownership. ● “Public Water System” includes privately-owned systems.

Connecting to An Existing Water System Water systems provide water supply within a defined service area and to a specific number of approved connections approved by the WA Department of Health through a Water Supply Plan. Key Questions: ● Is property within a system’s approved service area? ● Is that system within its number of approved connections? ● If no, can the service area or approved connections be expanded?

Connecting to An Existing Water System ● Existing water systems charge a connection fee or general facilities charge. ● A letter or certificate of water availability from a water system is provided to demonstrate to the local government that water supply is available. ● Public Water System Coordination Act – a local government process to establish/modify service areas.

Areas Not Served by Existing Water Systems Three Main Options: Use an existing water right, or transfer one to the property; The Ground Water Exemption; or Issuance of a new water right.

The Groundwater Exemption Surface Water Code (1917) - No exemptions from surface water right permit requirement. Groundwater Code (1945) - Four exemptions from groundwater permit requirement.

Exempt Wells – RCW 90.44.050 ● Single or group domestic use up to 5,000 gallons per day; ● Industrial use up to 5,000 gallons per day; ● Non-commercial lawn/garden up to ½ acre; ● Stockwatering

Exempt Wells - RCW 90.44.050 ● Each exemption is a separate exemption; ● Exemption is from the groundwater code permit requirement – it is not an exemption from the entire water code or from prior appropriation (but SB 6091 Hirst legislation changed this, a little) ● Exempt from permit – but Ecology regulations limit, prohibit, or require mitigation for exempt domestic uses; ● 5,000 gallon per day domestic exemption is “per project.” (Ecology v. Campbell & Gwinn)

Local Instream Flow Rules ● WRIA 17 – Quilcene Snow Instream Flow Rule (Rule is based on “reservations” within sub-basins) ● WRIA 18 – Dungeness Instream Flow Rule (Rule requires mitigation in all areas) ● Bassett v. Ecology – Court of Appeals case challenging Dungeness Rule.

Exempt Wells ● All wells require a well start card and a well log – these are well drilling requirements, not approvals to use water. ● Exempt wells must still meet local water quantity, quality, well siting, pump tests, or other local requirements. ● Requirements for drilling a well are different from the legal right to use water from the well.

Well Log

Does the property have a water right? What is a “water right?” RCW 64.06 – Seller Disclosure (Form 17) “Are there any water rights for the property, such as a water right permit, certificate, or claim? (a) If yes, have the water rights been used during the last five years? (b) If so, is the certificate available?

Water Right Permit Process – Key Steps ● Water Right Application ● Water Right Permit ● Proof of Appropriation ● Water Right Certificate

Water Right Attributes Purpose of Use (domestic, irrigation, industrial, etc. . . ) Place of Use (legal description) Point of Diversion/Withdrawal (Well or diversion location) Annual Quantity (acre-feet/year) Instantaneous Quantity (gpm or cfs) Priority Date Development Schedule Date Various Conditions (Metering, Reporting, etc.)

Water Right Application

Water Right Permit

Water Right Certificate

Information on Water Rights www.ecy.wa.gov Northwest Regional Office, Bellevue (425) 649-7000 Eastern Regional Office, Spokane (509) 329-3400 Southwest Regional Office, Lacey (360) 407-6300 Central Regional Office, Union Gap (509) 575-2490 Google Search “Ecology Water Resource Explorer” or “Ecology Well Logs” (Ecology’s water rights and wells database) Public Records Request to Ecology via fax or email (by ¼ - ¼ section, parcel number, or address)

Claims: Pre-Code Water Rights Claims are for water uses that pre-date the adoption of the state’s water codes ● Surface Water Claim must predate 1917 ● Ground Water Claim must predate 1945

Water Right Claim

Forfeiture of Water Rights ● Abandonment (Pre – 1967) ● Statutory Relinquishment (Post – 1967) ● Exceptions to Relinquishment - Municipal Water Rights - Determined Future Development - Trust Water Rights - and many others . . .

Changes/Transfers of Water Rights

Changes/Transfers of Water Rights Common Law: In a real estate transaction, the water rights appurtenant to a property transfer with that property unless the purchase and sale agreement says otherwise. But, water rights can be sold separately from the land, and the place and purpose of use can be changed.

Changes/Transfers of Water Rights Ownership of a Water Right: Who owns the water right? This is a matter of real property law. Use of a Water Right: How can the water right be used? These are regulatory issues, based on the water right documents and Ecology decisions.

Changes/Transfers of Water Rights ● Water rights can be transferred to a new location (“place of use”) ● Water right can be changed to a different type of use (“purpose of use”) ● The point of diversion or withdrawal can be changed to a new location ● Seasonal use can be changed to year-round

Changes/Transfers of Water Rights ● Water rights can be changed/transferred only to the extent the water right has been used. ● Water rights are reviewed for relinquishment during transfer process ● No impairment of junior or senior water rights ● Application process through Ecology and local County Water Conservancy Boards

Typical Aerial Photo – Google Earth

Ecology’s Regulatory Authority Over Exempt Wells – Instream Flow Rules

Ecology’s Regulatory Authority Over Exempt Wells – Instream Flow Rules Ecology’s Regulatory Authority Over Exempt Wells – Instream Flow Rules* (*Or, how to turn Western Water Law into an environmental law) ● Adopts instream flow level that is an instream water right within the priority system ● Water rights junior to the instream flow may be curtailed when the instream flow level is not being met; ● Older Ecology rules (70s/80s) did not apply to exempt uses; ● New Ecology rules (2000s) regulate exempt uses by requiring mitigation, creating a reservation of exempt water, or limiting the gallons per day for exempt uses.

The Hirst Case: A Collision Between the GMA and Water Code The “exempt well” statute allows new wells under 5,000 gallons per day, no permit review by local government or Department of Ecology. No review of impairment on instream flows or other water rights. Wells may be subject to rules adopted by Department of Ecology. No other state or local agency has explicit authority to regulate water supply or instream flows.

The Hirst Case: A Collision Between the GMA and Water Code Growth Management Act – RCW Chapter 36.70A “Protect the . . . the availability of water. . .“ “Protect the quality and quantity of groundwater“ “Consistent with the protection of natural surface water flows and groundwater” State Building Code - RCW 19.27.097 (Enacted with GMA) Local governments must determine “adequate legal potable” water supply for new buildings. RCW 19.27.097

The Hirst Case: A Collision Between the GMA and Water Code Before the Hirst Decision: ● Local governments would approve building permits relying on new exempt wells, so long as the Ecology’s instream flow rule did not prohibit or regulate the new exempt well – even in basins where Ecology adopted an instream flow and the instream flow level was not being met by actual flows. ● Local governments would not review new exempt wells for “impairment” of the instream flow, because new exempt wells are not subject to “impairment” review under RCW 90.44.050. ● The “adequate water supply” determination in RCW 19.27.097 (building code) was considered different from the “impairment” review under the water code (and local governments have no authority to implement the water code.

The Hirst Decision: GMA Survives the Collision, Exempt Wells Statute Does Not Stte Supreme Court says: “Instead of evidence, the County presumes that water is available for all permit-exempt wells unless Ecology has explicitly closed a basin . . .” “. . . a building permit requires that the county consider whether the development would impair senior rights, including instream flows.”

The Hirst Decision: Reaction ● Whatcom County: building permit moratorium ● Pierce County: Requires “impairment” (water balance) report ● Spokane County: Unveils water banking program ● Other Counties: Hirst decision may apply, based on whether county is a GMA county and whether there is an Ecology instream flow rule. If a county is subject to Hirst, when is compliance required? ● Some counties: Disclaimer with building permits that water may not be available, county cannot be sued. Some banks stop financing vacant land and construction loans. ● Reduction in vacant land sales and building permits, economic losses ● Counties prepare to devalue rural lands, with property tax shift onto urban areas of counties.

The 2017-2018 Legislature Responds SB 5239 and SB 6091 2017: - Senate passes SB 5239 (four times) - House does not pass any Hirst bill Senate refuses to pass Capital Budget 2018: - SB 6091 introduced, includes Hirst reversal from SB 5239, and adds $300 million, 15-year instream flow planning and restoration program

SB 6091 - Summary 1. Growth Management Act: Reverses Hirst decision so that cities and counties do not have GMA obligations to review new exempt wells for impairment. 2. Planning Enabling Act: Non-GMA counties/cities do not have obligation to review new wells for impairment. 3. Building Permit and Subdivision Decisions: Local government water availability decision is based on Ecology rules and specific provisions in SB 6091, which vary by watershed. No impairment review for building permits. 4. Watershed Planning: Local process to develop projects to offset 20-year exempt well impact; recommend rule changes to Ecology, $300 million funding. 5. Foster Task Force: Mitigation for water right permit decisions.

Water availability under Ecology rules & SB 6091 [6 General Categories]

Seller Disclosure & Agency Law ● NWMLS forms: adequacy of water supply is an issue for the buyer; ● Validity of a water right or a legal right to water supply is a legal determination and real estate brokers cannot provide legal advice to clients; ● Real estate agency law duty to seek expert advice on issues outside the broker’s expertise;

Water Supply - Forms Form 22LA – Land & Acreage Addendum Buyer to determine “ . . . the adequacy of water rights for the property.” Form 21 – Residential Purchase & Sale Buyer is advised to investigate whether there is a sufficient water supply to meet buyer’s needs.” Form 35 – Feasibility Contingency Addendum

From the Real Estate Listings . . . “Home has private well, use all the water you want with no utility bill or subdivide and serve additional homes . . . “

From the Real Estate Listings . . . “Former dairy has documented historical water rights to use for new development . . . “

From the Real Estate Listings . . . “Well and septic system have been approved and installed . . . “

From the Real Estate Listings . . . “Property is adjacent to water district that can provide water supply . . . “ “HOA water system will provide water supply for one house.”