As Amended by House Committee
As Amended by Senate Committee
Session of 2000
SENATE BILL No. 388
By Special Committee on Environment
12-15
12 AN ACT
concerning water rights; relating to water banking; en-
13 acting the Kansas
water banking act.
14
15 Be it enacted by the Legislature of the
State of Kansas:
16 Section
1. This act Sections 1 through 13,
and amendments
17 thereto, may be cited as the Kansas
water banking act.
18 Sec. 2. As
used in this act sections 1 through 13,
and amend-
19 ments thereto:
20 (a) ``Bank
boundary'' means the geographic area where a water bank
21 operates and conducts the functions of a
water bank and may encompass
22 more than one hydrologic
unit.
23 (b) ``Bank
charter'' means a document that sets out the articles of
24 incorporation and principal functions of a
water bank.
25 (c) ``Bankable
water right'' means a water right that has been deter-
26 mined pursuant to section 4, and amendments
thereto, to be bankable.
27 (d) ``Chief
engineer'' means the chief engineer of the division.
28
(e) ``Conservation element'' means the portion of a deposit
that is
29 taken out of use for the duration of the
deposit and is not allowed to be
30 withdrawn and used by subsequent users.
31
(f) ``Consumptive use'' means the gross diversion of
water minus: (1)
32 Waste of water; and (2) amounts
returned to the source of water supply.
33
(f) ``Deposit,'' other than as used in ``safe deposit
account,'' re-
34 fers to the deposit of a water right,
or portion of a water right, in a
35 water bank for the purpose of having
the bank lease water from
36 such water right, or portion of a
water right, to another person or
37 entity.
38 (g) ``Division''
means the division of water resources of the Kansas
39 department of agriculture.
40 (h) ``Hydrologic
unit'' means the defined area of
hydraulically
hy-
41
drologically
connected sources of water supply a
defined area where
42 water rights authorizing diversion of
water from a source of supply
43 may be deposited and water from the same
source of supply may
2
1 be leased, in accordance with the
provisions of this act, without
2 causing impairment of existing
water rights or a significantly dif-
3 ferent hydrological effect to
other users of water from the same
4 source or hydraulically connected
sources of supply.
5
(i) ``Linked water rights'' means two or more water
rights that
6 authorize common points of
diversion or a common place of use, or
7 both.
8
(i) (j) ``Safe deposit
account'' means a personal account held in a
9 water bank where unused water from a
bankable water right is deposited
10 placed for use in future
years.
11 (j)
(k) ``Term permit'' means a permit to
appropriate water for a spec-
12 ified period of time.
13 (k)
(l) ``Water bank'' means a private
not-for-profit corporation that
14 leases: (1)
Leases water from water rights that have been deposited
in
15 the bank ; and (2) provides safe
deposit accounts. A water bank may
16 be a groundwater bank or a surface
water bank, or both.
17 Sec. 3. (a)
A water bank shall be authorized to be
authorized to
18 enter into contracts with holders of water
rights for deposit in the bank
19 of all or a portion of any water right from
a source of supply hydrologic
20 unit within the bank boundary,
subject to the following:
21 (1) The bank
shall accept for deposit only a water right, or portion of
22 a water right, that has been determined to
be a bankable water right under
23 section 4, and amendments
thereto;
24 (2) a deposit of
a groundwater water right shall be for a period of not
25 more than five years;
26 (3) a deposit
shall be subject to such terms and conditions as provided
27 by the contract between the bank and the
depositor, including penalty
28 provisions for breach of any contract
conditions; and
29 (4) a deposit
shall be subject to such terms and conditions, and such
30 approval by the chief engineer, as provided
by rules and regulations of
31 the chief engineer.
32 (b) A water bank
shall be authorized to lease water from any water
33 right, or portion of a water right, that
has been deposited in the bank,
34 subject to the following:
35 (1) Any water
leased must be used within the bank boundary and in
36 the same hydrologic unit from which the
water is water right author-
37 izing diversion of the water is
leased deposited;
38 (2) use of leased
water shall be subject to all provisions of the Kansas
39 water appropriation act, including but not
limited to all requirements
40 relating to: Term permits; changes
in the place of use, the point of di-
41 version and the use made of water;
and water use reporting term permits;
42 (3) a lease shall
be subject to such terms and conditions as provided
43 by the contract between the bank and the
lessor, including penalty pro-
3
1 visions for breach of any contract
conditions; and
2 (4) a lease
shall be subject to such terms and conditions, and such
3 approval by the chief engineer, as
provided by rules and regulations of
4 the chief
engineer.; and
5 (5) a
water bank's decision of whether or not to lease water
shall
6 not be based on the proposed
use of the water.
7 (c) A water
bank shall be authorized to provide safe deposit
accounts
8 where a holder of a water right may
place unused water from the water
9 right for future withdrawal, subject
to the following:
10 (1) A water right
holder shall place in a safe deposit account only
11 water from a water right that has been
determined to be a bankable water
12 right under section 4 and amendments
thereto;
13 (2) only water
that was unused in the immediate past calendar year
14 may be placed in a safe deposit account and
the amount that shall be
15 placed in such account shall be less than
the total amount of unused water
16 from the bankable water right in that
year;
17 (3) only water
from one water right shall be placed in a safe deposit
18 account and water from a water right shall
not be placed in more than
19 one safe deposit account, except that
water from linked water rights
20 may be placed in a single safe
deposit account;
21 (4) each calendar
year that water remains in a safe deposit account,
22 the amount of water held in the account
shall decrease by a percentage
23 established by the charter of the bank but
in no case less than 10% an-
24 nually of all amounts placed in the
account;
25 (5) the total
amount of water placed accumulated
in a safe deposit
26 account shall not exceed the maximum annual
quantity authorized to be
27 diverted under the water right or the
aggregate maximum quantity
28 authorized to be diverted under all
linked water rights from which
29 water is deposited in the
account;
30 (6) use of water
withdrawn from a safe deposit account shall be sub-
31 ject to all provisions of the Kansas water
appropriation act, including but
32 not limited to all requirements relating
to: Term permits; changes in the
33 place of use, the point of
diversion and the use made of water; and water
34 use reporting term
permits;
35 (7) a safe
deposit account shall be subject to such terms and condi-
36 tions as provided by the contract between
the bank and the account
37 holder, including penalty provisions for
breach of any contract conditions;
38 and
39 (8) a safe
deposit account shall be subject to such terms and condi-
40 tions, and such approval by the chief
engineer, as provided by rules and
41 regulations of the chief engineer.
42 (d) A water bank
may provide services to facilitate the sale or lease
43 of water rights.
4
1 (e) A
water bank shall not own, buy or sell water rights.
2 Sec.
4. (a) Before a water right or portion
of a water right shall be
3 accepted for deposit in a water bank
or water from a water right shall be
4 placed in a safe deposit account, the
bank, with the assistance of the
5 division, shall determine whether the
water right is bankable, as follows:
6 (1)
(a) The right is vested or has been issued a certificate of
appropriation;
7 and (2)
(b) the right has not been abandoned and is in good
standing,
8 based on past water usage and
compliance with the terms of the holder's
9 permit and all applicable provisions
of law and orders of the chief engi-
10 neer. Determination of the
portion of a water right that is bankable
11 shall be based on the
maximum annual quantity authorized to be
12 diverted under the water
right and shall not take into account ac-
13 tual prior use of less
than that amount.
14
(b) The division may charge a water bank for the
actual cost of assis-
15 tance provided pursuant to
subsection (a) or for the actual cost of any
16 other services provided to a
water bank pursuant to this act.
17 Sec. 5. (a)
Before a water bank is authorized to operate in the state,
18 the bank's charter must be approved by the
chief engineer. Prior to ap-
19 proval, the body wishing to charter the
bank shall submit to the chief
20 engineer the proposed bank charter and any
other information required
21 by rules and regulations of the chief
engineer to determine whether the
22 bank shall be chartered to operate in the
state.
23 (b) The chief
engineer shall approve the charter of a water bank only
24 if the chief engineer determines that:
25 (1) The charter
ensures that the operations and policies of the bank
26 will be consistent with the provisions of
this act, the state water plan and
27 all applicable statutes, rules and
regulations, findings and orders of the
28 chief engineer, groundwater management
district policies and water as-
29 surance district operations plans;
30 (2) there is
sufficient participation by water right holders and water
31 users to make the operations of the bank
practical and feasible;
32 (3) the governing
body of the bank has at least five members and
33 is reasonably representative of public and
private interests in water within
34 the bank boundary;
35 (4) the
boundary of the bank does not overlap with the boundary
of
36 any other chartered water
bank;
37 (4) the
bank would not lease or accept for deposit
water from
38 the same source of
supply placement in a safe deposit account
wa-
39 ter from the same hydrologic unit as
another chartered bank or
40 accept for deposit a water right that
authorizes diversion of water
41 from the same hydrologic unit
as another chartered water bank;
42 (5) the charter
ensures that, for each calendar year, the aggregate
43 amount of all bank deposits (determined by
multiplying the amount of
5
1 each water right deposited by the
length of time of the deposit and then
2 adding together the resulting amounts
for all deposits) will equal or ex-
3 ceed the sum of the aggregate amount
of water leased by the bank (de-
4 termined by multiplying the amount of
each lease by the length of time
5 of the lease and then adding together
the resulting amounts for all leases)
6 plus the aggregate conservation
element of all leases (determined by mul-
7 tiplying the conservation element of
each lease by the length of the lease
8 and then adding together the
resulting amounts for all leases);
9 (6) the
charter ensures that the operations of the bank will not result
10 in impairment of existing water rights or
an increase in depletion of se-
11 verely depleted groundwater aquifers or
stream courses; and
12 (7) the charter
ensures that the operations of the bank will result in
13 a savings of 10% or more in the total
amount of groundwater consumed
14 pursuant to water rights deposited in the
bank, excluding groundwater
15 located in an intensive groundwater use
control area;
and. where cor-
16 rective control provisions have reduced
the allocation of ground-
17 water to less than the quantity
previously authorized by water
18 rights in the area;
19 (8) the
charter provides a procedure for resolution of com-
20 plaints by bank participants and others
impacted by the bank pol-
21 icies, practices and operations;
and
22 (9) the
charter ensures that the determination of the portion
23 of a water right that is bankable shall
be subject to the following:
24 (A) The
determination shall be primarily based on a represen-
25 tative period of average water
consumption for the hydrologic unit
26 from which water is authorized to be
diverted under the water
27 right;
28 (B) the method
of determination shall not penalize past imple-
29 mentation of water conservation
practices;
30 (C) deposit of
a portion of a water right for irrigation pursuant
31 to subsection (a) of section 3, and
amendments thereto, shall not
32 be allowed unless: (i) A proportional
amount of the authorized
33 place of use of water diverted under the
water right will not re-
34 ceive water during the period that the
water right is deposited in
35 the bank; or (ii) the conservation
element is applied to the portion
36 of the water right that is not
deposited; and
37 (D) the method
of determining the portion of a water right that
38 is bankable for purposes of placing of
water in a safe deposit ac-
39 count pursuant to subsection (c) of
section 3, and amendments
40 thereto, shall include: (i)
Consideration of the reasons why such
41 water was unused, including, but not
limited to, adequate rainfall
42 and the supply of water's being
unavailable for use; and (ii) criteria
43 that assures the bank's safe deposit
account operations do not re-
6
1 sult in a net increase in
consumptive use in the affected hydrologic
2 unit.
3
(8) if the bank is a groundwater bank, the charter
ensures that the
4 operations of the bank will
not result in an increase in consumptive use
5 of water within the boundary
of the bank.
6
(c) Not more than five
10 water banks
shall be chartered to operate
7 in the state and at least
one such bank shall be a surface water bank.
8 (c) Prior to July 1,
2001, not more than one water bank shall
9 be chartered to operate in the
state. On or after July 1, 2001, and
10 before July 1, 2002, not more than two
additional water banks shall
11 be chartered to operate in the state. On
or after July 1, 2002, and
12 before July 1, 2003, not more than two
additional water banks shall
13 be chartered to operate in the state. On
and after July 1, 2003, no
14 additional water banks shall be
chartered to operate in the state
15 until the first report of an evaluation
team is submitted pursuant
16 to section 7, and amendments
thereto.
17 (d) A water bank
shall be chartered for a period of not more than
18 seven years, at which time the bank shall
be subject to review in accord-
19 ance with section 6
7, and amendments thereto, to determine whether
20 the bank's charter shall be extended.
21 (e) Any
amendment to the charter of a water bank must be ap-
22 proved by the chief engineer prior to
adoption of the amendment.
23 Sec. 6. (a) On or
before February 10 of each year, each water
24 bank shall submit to the chief
engineer a report containing the
25 following:
26 (1) With
regard to water rights or portions of water rights on
27 deposit in the bank during the last
year: (A) The total quantity of
28 water authorized to be diverted
annually pursuant to each such
29 water right or portion of a water
right; (B) the total quantity of
30 water used, by purpose of use, and
acres irrigated for the portion
31 authorized to be used for irrigation,
during the last year as a result
32 of leases of such water rights or
portions of water rights; and (C)
33 the total quantity of water used, by
purpose of use, and acres irri-
34 gated for the portion authorized for
irrigation pursuant to such wa-
35 ter rights or portions of water
rights during the two years preceding
36 the last year; and
37 (2) with
regard to water in each safe deposit account in the
38 bank: (A) An accounting of the total
quantity of water placed in
39 such accounts during the past year
and a balance at year end; (B)
40 the total quantity of water used
during the past year, and acres
41 irrigated if an irrigation water
right, from the account; (C) the total
42 quantity of water authorized to be
diverted annually, the quantity
43 actually used and the acres
irrigated, if an irrigation water right,
7
1 during the past year pursuant
to the water rights or linked water
2 rights related to such account;
and (E) the total quantity of water
3 used and acres irrigated
pursuant to such water rights during the
4 two years preceding the last
year.
5
(b) The chief engineer may require owners of water rights
de-
6 posited in a water bank, owners
of water rights that have placed
7 water in safety deposit
accounts in a water bank and persons leasing
8 water from a water bank to file
annual water use reports at a date
9 earlier than that provided by
K.S.A. 82a-732, and amendments
10 thereto.
11 (c) The
report required by this section shall be in the form
pre-
12 scribed by the chief
engineer.
13 Sec.
6. 7. (a) Not later than five
years after the establishment of a
14 water bank, the chief engineer
shall convene a team to evaluate the op-
15 eration of the bank. The team
shall consist of:
16
(1) The chief engineer or the chief engineer's
designee;
17
(2) the director of the Kansas water office or the director's
designee;
18
(3) one representative
of the governing body of the
bank;
19
(4) a one
representative of each groundwater management
district
20 located partly or wholly within
the boundary of the bank in the state,
21 which representative shall be
selected by the board of directors of the
22 district;
23
(5) a one
representative of each assurance district located partly
or
24 wholly within the boundary of
the bank, which representative shall be
25 selected by the board of
directors of the district;
26
(6) two
representatives of water right holders and water users
who
27 have used the bank's services,
which representatives shall be selected by
28 the chief engineer;
and
29 (7) a
representative of the water bank task force familiar with
the
30 operation of the bank;
and
31
(8) any additional members that the foregoing members
determine
32 useful to the team's
evaluation.
33
(7) two legislators appointed by the legislative
coordinating
34
council.
35
(b) A legislator serving on the team shall be paid
compensation,
36 travel expenses and
subsistence expenses or allowances as
provided
37 by K.S.A. 74-3212, and
amendments thereto, for attendance at any
38 meeting of the team or any
subcommittee meeting of the team au-
39 thorized by the
team. director of the Kansas geological
survey shall
40 convene a team to evaluate the operation
of the bank. The team
41 shall consist of:
42 (1) The
director of the Kansas geological survey, or the direc-
43 tor's designee, who shall serve as
chairperson of the team;
8
1 (2) two
members who represent water right holders and water
2 users who have used the bank's
services, which members shall be
3 selected by the governing body of
the bank; and
4
(3) members selected by the chief engineer as follows: (A)
Two
5 members engaged in teaching or
research at institutions of pos-
6 tsecondary education in subjects
involving water resources, in-
7 cluding but not limited to water
resources engineering and hy-
8 drology; (B) a member who is an
economist with knowledge and
9 experience in water resources; (C)
one member having knowledge
10 and experience in water law; (D) two
members having knowledge
11 and experience in water policy issues
and residing outside the bank
12 boundary, who shall represent the public
interest; (E) one repre-
13 sentative of each groundwater management
district located in
14 whole or in part within the bank
boundary; and (F) one represen-
15 tative of each water assurance district
located in whole or in part
16 within the bank boundary.
17 (b) The staff
of the Kansas geological survey shall provide staff
18 assistance to the evaluation
team.
19 (b)
(c) Not more than one year after a team is
convened pursuant to
20 this section, the team shall submit a
report of its evaluation and recom-
21 mendations to the governor, the Kansas
water office, the Kansas water
22 authority, the secretary of agriculture,
the chief engineer and the senate
23 standing committee on energy and natural
resources and the house stand-
24 ing committee on environment, or the
successors to such committees
25 regarding:
26 (1) The
operations and policies of the bank and whether they are
27 consistent with the provisions of this act,
the state water plan and all
28 applicable statutes, rules and regulations,
findings and orders of the chief
29 engineer, groundwater management district
policies and water assurance
30 district operations plans;
31 (2) whether the
operations of the bank are achieving the goals and
32 objectives of water banking as set out in
the state water plan and whether
33 changes could be made to further those
goals and objectives;
34 (3) whether the
charter of the bank should be extended;
35 (4) the terms
under which the bank's charter should be allowed to
36 lapse, if the team recommends that the
charter not be extended; and
37 (5) any other
matters that the team determines relevant to the future
38 of water banking in the state.
39 (c)
(d) Unless otherwise provided by law, the chief
engineer, in ac-
40 cordance with the recommendations of the
team, shall may extend the
41 charter of the bank for an additional
period not to exceed seven years or
42 shall may
allow the bank charter to lapse under the terms recommended
43 by the team.
9
1 Sec.
7. 8. Depositing a water right
in a water bank or placement of
2 water in a safe deposit account in a
water bank shall constitute due and
3 sufficient cause pursuant to K.S.A.
82a-718, and amendments thereto, for
4 failure to use water for a lawful,
beneficial use for the term of the deposit
5 or the placement.
6 Sec.
8. 9. The chief engineer may
adopt rules and regulations to
7 administer and enforce the provisions
of this act.
8 Sec. 10. (a) In
addition to any other provision of this act or the
9 Kansas water appropriation act,
and subject to the provisions of
10 subsection (b), the chief engineer may
suspend the use of water
11 under a term permit, an approved
application for a permit to ap-
12 propriate water for beneficial use, an
appropriation right or a
13 vested right, acquired pursuant to the
provisions of the Kansas
14 water appropriation act, for the failure
to comply with the provi-
15 sions of this act. The suspension may be
for a defined period in a
16 subsequent calendar year or years but
does not include or prevent
17 the enforcement of the terms, conditions
and limitations of a water
18 right or permit during the current year
of use.
19 (b) The chief
engineer shall suspend the use of water under a
20 permit or water right pursuant to
subsection (a) only upon notice
21 and hearing in accordance with the
provisions of the Kansas ad-
22 ministrative procedure act.
23 (c) Orders of
the chief engineer issued pursuant to this section
24 are subject to review in accordance with
the provisions of K.S.A.
25 1999 Supp. 82a-1901, and amendments
thereto.
26 Sec.
11. Each water bank shall pay all costs incurred by
the
27 division and by the Kansas geological
survey for assistance and
28 services provided pursuant to this act,
including, but not limited
29 to, costs for personnel necessary to
provide such assistance and
30 services.
31 Sec.
12. (a) There is hereby created in the state treasury
the
32 water resources cost fund. The chief
engineer shall remit to the
33 state treasurer all moneys received by
the division to reimburse
34 costs as required by section 11, and
amendments thereto. Upon
35 receipt, the state treasurer shall
deposit the entire amount in the
36 state treasury and credit it to the
water resources cost fund.
37 (b) Moneys in
the water resources cost fund shall be expended
38 only for the division's costs of
providing assistance and services as
39 provided by this act.
40 (c) On or
before the 10th of each month, the director of ac-
41 counts and reports shall transfer from
the state general fund to
42 the water resources cost fund interest
earnings based on:
43 (1) The
average daily balance of moneys in the water resources
10
1 cost fund for the preceding month;
and
2 (2) the
net earnings rate for the pooled money investment
3 portfolio for the preceding
month.
4 (d) All
expenditures from the water resources cost fund shall
5 be made in accordance with
appropriation acts upon warrants of
6 the director of accounts and
reports issued pursuant to vouchers
7 approved by the chief engineer for
the purposes set forth in this
8 section.
9 Sec.
13. (a) There is hereby created in the state treasury
the
10 geological survey cost fund. The
director of the Kansas geological
11 survey shall remit to the state
treasurer all moneys received by the
12 geological survey to reimburse costs as
required by section 11, and
13 amendments thereto. Upon receipt, the
state treasurer shall de-
14 posit the entire amount in the state
treasury and credit it to the
15 geological survey cost fund.
16 (b) Moneys in
the geological survey cost fund shall be ex-
17 pended only for the Kansas geological
survey's costs of providing
18 assistance and services as provided by
this act.
19 (c) On or
before the 10th of each month, the director of ac-
20 counts and reports shall transfer from
the state general fund to
21 the geological survey cost fund interest
earnings based on:
22 (1) The
average daily balance of moneys in the geological sur-
23 vey cost fund for the preceding month;
and
24 (2) the net
earnings rate for the pooled money investment
25 portfolio for the preceding
month.
26 (d) All
expenditures from the geological survey cost fund shall
27 be made in accordance with appropriation
acts upon warrants of
28 the director of accounts and reports
issued pursuant to vouchers
29 approved by the director of the Kansas
geological survey for the
30 purposes set forth in this
section.
31 Sec. 9.
14. This act shall take effect and be in force from and
after
32 its publication in the statute book.