A recent report details the limited nature of water leasing/banking in the Western U.S. (West Water Research, 2004). The report provides an analysis of water banking legislation policies and programs in 12 Western states. There are 23 active water banks of which seven are market based pricing, meaning that the price is negotiated between the buyer and the seller with one bank having online negotiations. The other 16 banks are fixed pricing or administrative pricing schemes that are set annually. Length of transaction varies and the number of transactions is limited annually. Here we explore the role of water leasing/banking in allocating resources among competing demands. In particular, we develop a stylized template for temporary voluntary transfers amongst competing uses (agriculture, Native American farming, environmental interests, urban interests) on the Middle Rio Grande. There are many issues (engineering, physical, legal, and institutional) to be addressed in allowing for water transfers within a basin. Central to our effort is linking of a hydrological/engineering/institutional model that allows for water transfers to be evaluated within the various frameworks.