Senate advances 10-year water-banking pilot to curb 'buy-and-dry' transfers

SALT LAKE CITY — The Utah Senate on the fourth day of the 2020 session advanced Senate Bill 26, a 10-year water-banking pilot designed to enable voluntary, temporary transfers of water rights as an alternative to permanent "buy-and-dry" sales that proponents say harm rural economies.

Senator Jani Iwamoto, sponsor of SB26, told colleagues the program is "voluntary temporary and local" and emphasized the measure grew from more than 50 public meetings and town halls held across the state to gather input. She said the pilot builds on earlier work, including a one-time state appropriation of $400,000 and a matching $400,000 Bureau of Reclamation waterSMART grant used to begin outreach and planning.

"Most Western states have some form of water banking," Iwamoto said, adding that the bill is intended to "maintain working agriculture, a strong economy, a vibrant natural environment" while helping public water suppliers meet quality standards.

Senators from across the chamber praised the bill’s consensus-driven process. Senator Okerlund noted the sponsorship and outreach that produced Farm Bureau support; Senator Bridal and Senator Stevenson both commended Iwamoto’s leadership and the bill’s market-based approach. Stevenson described it as "a mechanism to transfer water to the future and do it in a market way" without unnecessary government intervention.

The bill sponsor and supporters said the pilot is intended to be bottom-up, not top-down, and to give local water users tools to temporarily loan or lease water use rights instead of permanently selling them off. Iwamoto said the state study and outreach identified risks of agricultural decline from transfers documented elsewhere in the West — she cited Crowley County, Colorado, as an example of economic harm after buy-and-dry transfers.

The Senate recorded a roll-call of 28 yea, 0 nay, 1 absent to read SB26 for a third time. Under the chamber’s procedures the bill will be transmitted to the House for further consideration.

The measure, as discussed on the floor, includes a 10-year pilot design, leverages prior appropriations and federal grant funds for start-up work, and emphasizes voluntary participation and local administration. Details about implementation, eligible basins, or specific enrollment procedures were summarized by the sponsor and provided in a handout distributed on the floor; those technical program rules were not read into the record during floor debate.

Next steps: SB26 will go to the Utah House for committee referral and further consideration. The Senate sponsors said they expect additional rulemaking or administrative steps for the pilot if the House approves the bill.