Water banking grants

In July 2021, the Legislature provided up to $14 million in funding to buy water for water banks in rural counties with headwater streams. This funding is designed to help public entities and their partners preserve water rights in their basin for local use and streamflow.

Communities in headwater basins, where water flows away and downstream to other areas, are increasingly concerned with the potential impacts of large water right transfers that move water rights far downstream and out of the basin. After water is transferred downstream, it is difficult to transfer back to a headwater county in the future. This new funding will help develop local water banks and protect streamflow. One third of all water rights acquired under this program must be set aside strictly for permanent instream use to support streamflows and aquatic resources.

Grant awards will fund water right purchases for ready-to-go water banking projects in eligible counties (see below), where water rights are identified and ready for purchase. We are currently developing guidance to help applicants prepare grant applications. We will be accepting applications later this year. Grant awards may not exceed $2 million per applicant. At a minimum, applicants must demonstrate the following eligibility requirements to qualify for grant funding:

  • Status as a public entity or in a formal partnership with a public entity,
  • Sufficient capacity and expertise to set up and operate a water bank,
  • A valid interest to purchase a specific water right that is adequate for use in a water bank and agree to change the water right’s purpose of use to instream flow and mitigation as part of the project,
  • Agree to set aside one-third of the purchased water right for instream flow benefiting fish and wildlife.