Can a Kansas groundwater rights holder use both a multi-year flex account and a water bank safe deposit account for the same water right?

Plain-English summary

The Kansas Department of Agriculture asked whether a holder of a groundwater right could set up a multi-year flex account, which lets a water user borrow against or bank future withdrawals over up to five years, while also placing that same water right into a "safe deposit account" with a chartered water bank like the Central Kansas Water Bank Association, which lets a user set aside water for future use or make it available for others to lease. The Department also asked whether a right placed in a water bank account in a prior year could later move into a flex account, and whether simply "enrolling" a right with a water bank (short of a full formal deposit) was enough to block a flex account.

The Attorney General concluded a water user must choose one option, not both. The controlling statute allows a multi-year flex account only for "[a]ny holder of a base water right that has not been deposited or placed in a safe deposit account in a chartered water bank," and the opinion read this language as an absolute bar, not limited to the year in which the flex account is being set up. Relying on the "present perfect tense" of "has not been," the opinion concluded that if a right was ever placed into a safe deposit account, even in a past year, it remains ineligible for a flex account unless and until it is formally withdrawn from the water bank. The opinion acknowledged a groundwater management district's concern that modern accounting could track both types of use without actually increasing net water consumption, but held that a clear statutory text controls even when its purpose could arguably be satisfied another way. Finally, on the enrollment question, the opinion concluded that "enrolling" a right with a water bank is the same as "placing" it in a safe deposit account for these purposes, using the ordinary meaning of "enroll" (to register or record), so an enrolled right is likewise ineligible for a flex account until withdrawn.

What this means for you

Groundwater rights holders considering either program: the opinion holds you must choose between a multi-year flex account and a water bank safe deposit account for the same water right; you cannot use both at once, and having ever placed the right in a safe deposit account, even in a past year, keeps it ineligible for a flex account until you formally withdraw it from the water bank.

Groundwater management districts overseeing local water accounting: the opinion acknowledges GMD5's concern that combined accounting might not increase net consumptive use, but confirms the statute's plain text controls regardless, so any change to allow dual participation would require legislative action, not just an administrative accounting fix.

Water bank administrators (including the Central Kansas Water Bank Association): the opinion confirms that merely enrolling a water right with your bank, without a full formal deposit, is legally equivalent to placing it in a safe deposit account for purposes of blocking a simultaneous multi-year flex account.

Common questions

If I placed my water right in a water bank safe deposit account five years ago, can I set up a flex account for it now?
No, according to the opinion; the statute's "has not been" language covers any prior placement, not just placements happening in the current year, so past enrollment still blocks a new flex account.

Does simply signing up or "enrolling" with a water bank count the same as formally depositing my water right there?
Yes, according to the opinion, which found no meaningful legal distinction between "enrollment" and "placement" for purposes of this eligibility rule.

Could a groundwater management district's own accounting system let a user do both at once if it prevents overuse?
Not under current law, according to the opinion; even though such accounting might serve the statute's underlying conservation purpose, the opinion concluded the Legislature's clear text controls, and only the Legislature itself could change that outcome.

Background and statutory framework

Kansas established multi-year flex accounts in 2001 to give groundwater rights holders flexibility in managing withdrawal amounts across a multi-year term permit, letting them exceed their annual authorized quantity in some years by using less in others, up to a total set by K.S.A. 82a-736. The same legislative session created the Kansas Water Banking Act, K.S.A. 82a-761 et seq., authorizing chartered, private not-for-profit water banks (of which only the Central Kansas Water Bank Association currently exists) to hold water rights in a "safe deposit account" for the owner's future use or to lease deposited water to another user.

The key eligibility statute, K.S.A. 82a-736(c)(1), lets a holder establish a flex account only if the underlying water right "has not been deposited or placed in a safe deposit account in a chartered water bank." The opinion applied ordinary grammatical analysis of the present perfect tense ("has not been") to conclude this bars any water right with a history of safe-deposit placement, not merely a right currently enrolled, and treated slight wording differences between the Water Banking Act's references to "water from" a right and K.S.A. 82a-736's reference to the whole right as immaterial ambiguity that did not change the outcome. The opinion also drew on the interpretive principle, reinforced by a Kansas Supreme Court dissent it cited, that courts interpret the words the Legislature actually chose rather than rewriting statutes to better fit an agency's preferred outcome, even where the underlying conservation goal might be served either way.

Citations and references

Statutes:
- K.S.A. 82a-736 (incl. (b)(3), (b)(4), (b)(6), (c)(1), (c)(1)(D)-(F), (d), (e)(2), (f), (j))
- K.S.A. 82a-761; 82a-762 (incl. (f), (j), (l)); 82a-763 (incl. (c), (c)(1)); 82a-764

Cases:
- In re Tax Appeal of BHCMC, 307 Kan. 154, 408 P.3d 103 (2017)
- Hoesli v. Triplett, Inc., 303 Kan. 358, 361 P.3d 504 (2015)
- State v. Fitzgerald, 308 Kan. 659, 423 P.3d 497 (2018)

Source

• Landing page: https://www.ag.ks.gov/reports-resources/ag-opinions
• Original PDF: https://www.ag.ks.gov/home/showpublisheddocument/21648/638480897926100000

Original opinion text

January 6, 2023

ATTORNEY GENERAL OPINION NO. 2023- 1

Stephanie A. Kramer, Chief Counsel
Kansas Department of Agriculture
1320 Research Park Drive
Manhattan, KS 66502

Re: Waters and Watercourses—Appropriation of Water for Beneficial Use—
Multi-Year Flex Accounts; Definitions, Establishment, Conditions; Term
Permits; Fees

         Waters and Watercourses—Appropriation of Water for Beneficial Use—
         Kansas Water Banking Act

Synopsis: Holders of groundwater rights may establish either a multi-year flex account
or place their water in a safe deposit account in a water bank, but not both.
Cited herein: K.S.A. 82a-736; 82a-761; 82a-762; 82a-763.

                          *             *             *

Dear Ms. Kramer:

As Chief Counsel at the Kansas Department of Agriculture, you ask whether holders of
groundwater rights may establish a multi-year flex account pursuant to K.S.A. 82a-736
and also place the same water right into a safe deposit account pursuant to the Kansas
Water Banking Act, K.S.A. 82a-761, et seq. Assuming this is not possible, you also want
to know whether water rights placed in a safe deposit account in prior years may be
subsequently placed into a multi-year flex account and whether the "enrollment" of a right
in a safe deposit account is sufficient to preclude the holder of the water right from
establishing a multi-year flex account.

We conclude that those who have placed a water right in a safe deposit account may not
place the same water right in a multi-year flex account, including users who placed that
right in a safe deposit account in prior years. We further conclude that enrollment of a
water right is the equivalent of placing a water right in a safe deposit account.

We must consider various statutes to answer your questions. The review of statutory
provisions begins with the text selected by the Legislature, giving words their ordinary,
everyday meanings. Only when the statute's language is ambiguous is it appropriate to
use tools of statutory interpretation.1

Multi-Year Flex Accounts

In 2001, the Kansas Legislature first established multi-year flex accounts to provide
versatility to holders of groundwater rights in how much water they can use over a certain
timeframe to account for greater or lesser demand.2 Currently, holders of groundwater
rights may generally place up to five years of their approved groundwater withdrawals
into a multi-year flex account.3 The Chief Engineer of the Division of Water Resources
issues term permits to these holders, authorizing them to use up to the total amount of
the water in the account at any time over the course of the years stated in the permit.4 In
effect, multi-year flex accounts allow holders of groundwater rights to either borrow
against future use by exceeding their annual authorized quantity or store water for future
use during the term of the permit by using less than the annual authorized quantity.5

Kansas Water Banking Act

At the same time the Legislature established multi-year flex accounts, it also authorized
the chartering of "water banks," which are private not-for-profit corporations that can
facilitate the banking of surface water or groundwater, or both.6 Water banks can offer
two services: (1) they may provide a "safe deposit account" in which holders of water
rights place their water for use in future years, and (2) they may "lease" to another person
or entity for a period of time water rights that have been "deposited" in the bank.7 To date,
only one water bank has been chartered in this state: the Central Kansas Water Bank
Association (CKWBA).8 CKWBA, which is located in Stafford, has the same geographic
boundaries as Big Bend Groundwater Management District No. 5 (GMD5).

The key statutory language that limits the use of multi-year flex accounts and water bank
accounts provides, "Any holder of a base water right that has not been deposited or

1 Bruce v. Kelly, 316 Kan. 218, 224, 514 P.3d 1007 (2022).
2 L. 2001, ch. 160, § 16.
3 K.S.A. 2022 Supp. 82a-736(c)(1)(D).
4 K.S.A. 2022 Supp. 82a-736(d), (e)(2). The term permit suspends the underlying water right over the

course of the permit's term. K.S.A. 2022 Supp. 82a-736(b)(3). As you state in your letter, we assume
for the purpose of answering your questions that all water rights are otherwise eligible to participate in a
multi-year flex account or water bank and that the Chief Engineer could lawfully issue any term permit.
5 To discourage water users from unnecessarily pumping any remaining water at the end of the permit's

term, the Legislature later added a provision allowing water users to carry forward one year's worth of
water into a subsequent multi-year flex account if a new account is established in the calendar year
immediately succeeding the year that the prior account expires. L. 2005, ch. 60, § 3; K.S.A. 2022 Supp.
82a-736(c)(1)(F).
6 L. 2001, ch. 160, §§ 1-13; K.S.A. 2022 Supp. 82a-762(l).
7 K.S.A. 2022 Supp. 82a-762(f), (j), (l).
8 https://ckwba.org/.

placed in a safe deposit account in a chartered water bank may establish a multi-year flex
account . . ."9

You believe the language clearly precludes those who have "deposited" (i.e., placed into
an account for lease by another person or entity) water rights in a water bank from also
establishing a multi-year flex account.10 We agree. Nonetheless, you believe that the
language is less clear when it comes to water rights "placed in a safe deposit account."
More specifically, you point to slightly different language in the Water Banking Act and
K.S.A. 82a-736 describing the placement of a water right into a safe deposit account. The
Water Banking Act twice references water "from" a water right, while K.S.A. 82a-736(c)(1)
speaks only of the entire water right.11 We do not believe these slight variations render
K.S.A. 82a-736(c)(1) ambiguous about who may utilize a multi-year flex account.12
Therefore, those who have placed a water right in a safe deposit account may not
establish a multi-year flex account.13

We note that GMD5 has expressed concern with this interpretation, believing that
accounting procedures can concurrently track usage of a water right placed in both a safe
deposit account and a multi-year flex account, meaning the net consumptive use of water
in a hydrologic unit would not increase. While this may be possible, the words used by
the Legislature are of paramount concern, and they may not be ignored even when a
purpose of the statute can be fulfilled irrespective of the text.14 Rather, we think the
legislative purpose of preventing net consumptive use underscores the plain language of
K.S.A. 82a-736(c)(1), requiring water users to choose between placing their water right
in either a multi-year flex account or safe deposit account.

In addition, you want to know whether the limitation in K.S.A. 82a-763(c)(1) applies to a
water right that has been previously placed into a safe deposit account or if it applies only
during the year in which the multi-year flex account is established. The statute uses the
phrase, "has not been," which is in the present perfect tense. "This means that the action
has been completed at or before the present."15 In this instance, the Legislature's use of
the present perfect tense means that if a water right has been previously placed into a

9 K.S.A. 2022 Supp. 82a-736(c)(1).
10 See K.S.A. 2022 Supp. 82a-762(f) (defining the verb use of "deposit" as the "deposit of a water right, or

portion of a water right, in a water bank for the purpose of having the bank lease water from such water
right, or portion of a water right, to another person or entity).
11 K.S.A. 2022 Supp. 82a-763(c) ("unused water from the water right"); K.S.A. 2022 Supp. 82a-764

("water from a water right").
12 See In re Tax Appeal of BHCMC, 307 Kan. 154, 166, 408 P.3d 103 (2017) (explaining that a "statute

[is] ambiguous if [it] contains 'provisions or language of doubtful or conflicting meaning, as gleaned from
a natural and reasonable interpretation of its language, and leaves us generally uncertain which one of
the two or more meanings is the proper meaning'").
13 Given our answer to this question, we also do not believe a water user could exhaust the water in a

safe deposit account and then register for a multi-year flex account in the same year.
14 See Hoesli v. Triplett, Inc., 303 Kan. 358, 367, 361 P.3d 504 (2015).
15 State v. Hurtado, No. 113,627, 2016 WL 4161365, at *4 (Kan. App. 2016) (unpublished opinion); see In

re D.H., 57 Kan. App. 2d 421, 429, 453 P.3d 870 (2019) (explaining that the use of the present perfect
tense in child in need of care cases indicates the Legislature wanted the court to consider
circumstances that occurred in the past up until the present time).

safe deposit account at any point in time, then it may not be placed in a multi-year flex
account. While this may seem like a strict interpretation of the statute, it accords with the
Legislature's precise designations of other timeframes found throughout the same
statute.16 Of course, if the Legislature did not intend for such a result, it alone can remedy
the issue.17

Finally, you want to know if "mere enrollment" of a water right in a safe deposit account
qualifies as "placed in" a safe deposit account, meaning that a water right currently
enrolled with a water bank would have to be withdrawn before it could be eligible for a
multi-year flex account. The Water Banking Act does not reference an "enrolled" water
right, and the regulations implementing the Act speak of only water rights enrolled in the
water right conservation program and the conservation reserve program.18 Considering
that the plain meaning of "enroll" in this instance is "to put in a record"19 or "to register . . .
into an official record,"20 we believe enrolled water rights are "placed in" a safe deposit
account for the purposes of K.S.A. 82a-763(c)(1).

CONCLUSION

Holders of a water right who have placed a water right in a safe deposit account may not
place the same water right in a multi-year flex account. This limitation includes water
rights that were placed in safe deposit accounts in prior years as well as water enrolled
in a safe deposit account.

                                                  Sincerely,


                                                  /s/Derek Schmidt

                                                  Derek Schmidt
                                                  Kansas Attorney General

                                                  /s/Kurtis K. Wiard

                                                  Kurtis K. Wiard
                                                  Assistant Solicitor General

DS:RCH:KKW:sb

16 See, e.g., K.S.A. 82a-736(b)(4), (b)(6), (c)(1)(E), (f), (j).
17 See State v. Fitzgerald, 308 Kan. 659, 672-73, 423 P.3d 497 (2018) (Stegall, J., dissenting) ("Put

plainly, this institution does not rewrite statutes. Our task is to interpret the plain meaning of the words
chosen by the Legislature. If it intended something other than these words, it is the Legislature's job to
fix the mistake.").
18 K.A.R. 5-17-1(b)(2).
19 Webster's Universal College Dictionary 267 (1997).
20 Black's Law Dictionary 610 (9th Ed. 2009).