Water banks and water exchanges may currently be one of the most talked about topics in the world of water rights and water law in Washington. But, what exactly is a water bank and what do they do? A water bank is an institutional mechanism used to facilitate the legal transfer and market exchange of various types of surface, groundwater and storage entitlements. The exchange leases water from willing sellers and then holds, transfers and exchanges water rights on behalf of willing buyers. Water banks vary in design depending the particular watershed and local water supply needs they were created to serve. They help move water rights from one user to another user. While individual changes or transfers or water rights have been accomplished between users for decades in Washington, water banks are a means to formally move water rights between multiple buyers and sellers.
Typical functions of a water bank may include:
- Matching buyers with sellers
- Settng prices
- Handling administrative water rights transfers (in Washington the State Trust Water Right Program is the legal mechanisem used)
- Setting rules and criteria for water bank transactions
- Certifying the validity of water rights