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3 Allocations of Water to Third- Parties and f or Water for use by TR <br />3.1 Allocations of Water to Third Parties. BCWR may propose or enter into a contract <br />with a third party to provide a portion of the Water Right as mitigation on such terms <br />consistent with this Agreement as BCWR may elect. BCWR or such third parties shall make <br />application to Ecology for a water budget neutrality determination or a permit to appropriate <br />surface or ground water by providing all regularly required supporting information and include <br />documentation, as necessary to conform to WAC 173-539A-050 and designation, on a form <br />prescribed by BCWR, of the specific quantity of the Water Right in Trust required to offset the <br />consumptive uses described in the application or request for water budget neutral determination <br />(hereinafter a "New Application"). As part of the New Application, Ecology will assign <br />mitigation to offset the consumptive use associated with the uses described on the New <br />Application. <br />3.3 Ecology will process the New Application in accordance with applicable law, <br />utilizing such portion of the Water Right, as reasonably needed, together with any other <br />proposed mitigation measures, shall reasonably offset the impacts of such new withdrawals. <br />3.4 If necessary or appropriate, Ecology will complete a Water Transfer Working <br />Group ("WTWG") project description and will present it to the WTWG. Ecology, in consultation <br />with the U.S. Bureau of Reclamation, will determine if some or all of the Water Right that BCWR <br />or the third party applicant designates would be assigned to the Reclamation -Ecology storage <br />and delivery exchange contract. <br />3.5 Ecology will investigate the New Application and recommend issuance or denial <br />of a permit or a determination of water budget neutrality based on applicable policy, rules, and <br />law. EcoIogy's review of a New Application shall also include the following considerations: <br />3.5.1 In order to develop and confirm performance standards as set forth in <br />any respective report of examination or determination of water budget neutrality, Ecology and <br />any such third party shall provide information to reasonably show or estimate, as the case <br />maybe, that the consumptive uses of the proposed project, when offset by a portion of the <br />Water Right and any other proposed mitigation measures, do not increase the consumptive use <br />of water. <br />3.5.2 With regard to domestic uses, and so long as withdrawals are metered by <br />users; and the subject project is, or will be made, subject to covenants, conditions and <br />restrictions which impose water use restrictions for both inside and outside purposes which <br />will be recorded against the project; and reasonable water use enforcement provisions are <br />provided; and return flows are provided for through an approved septic or other waste <br />treatment facility reasonably designed to infiltrate treated water in the general area from <br />which it is being withdrawn, BCWR shall propose the gallons per day on a year round basis per <br />equivalent residential unit ("ERU") that is acceptable to Ecology and the Washington State <br />Department of Health. <br />2 <br />