Western Water in the 21St Century Policies and Programs That Stretch Supplies in a Prior Appropriation World

Western Water in the 21st Century Policies and Programs that Stretch Supplies in a Prior Appropriation World

Adam Schempp Director, Western Water Program

June 2009 Acknowledgements

This handbook was prepared by the Environmental Law Institute. It was authored by Adam Schempp with guidance and editorial assistance from Jay Austin. Financial support for this work was provided by an anonymous donor family. The author wishes to thank all the individuals who participated in ELI’s research and interviews and gave their candid observations about policies and conditions on the ground in their respective states. Those individuals include: Susan Adams, Dan Arnold, Bob Barwin, Linda Bassi, Craig Bell, Stan Bradshaw, Andy Brummond, Debbie Colbert, Lynn Coleman, Kathleen Curry, Sandra Fabritz-Whitney, Casey Funk, Michael Garrity, Herb Guenther, Barbara Hall, Taryn Hutchins-Cabibi, Gerald (Jerry) Johns, Doug Kenney, Jason King, Gerry Knapp, Andrew Lieuwen, Chris Loft, Jerry Olds, Betsy Otto, Steve Parrett, Lisa Pelly, Bart Miller, Peter Nichols, Greg Ridgley, Jerry Rigby, Janet Ronald, Kenneth Slowinski, Robin Smith, Elizabeth Soderstrom, Gary Spackman, Mark Squillace, Dennis Strong, Scott Swanson, Zach Tillman, Patrick Tyrrell, Vicky Whitney, Tony Willardson, Scott Yates, and Katherine Yuhas. The ultimate conclusions and recommendations expressed in this report are solely those of the ELI.

About ELI Publications—

ELI publishes Research Reports that present the analysis and conclusions of the policy studies ELI undertakes to improve environmental law and policy. In addition, ELI publishes several journals and reporters — including the Environmental Law Reporter, The Environmental Forum, and the National Wetlands Newsletter — and books, which contribute to education of the profession and disseminate diverse points of view and opinions to stimulate a robust and creative exchange of ideas. Those publications, which express opinions of the authors and not necessarily those of the Institute, its Board of Directors, or funding organizations, exemplify ELI’s commitment to dialogue with all sectors. ELI welcomes suggestions for article and book topics and encourages the submission of draft manuscripts and book proposals. Western Water in the 21st Century: Policies and Programs that Stretch Supplies in a Prior Appropriation World Copyright © 2009 Environmental Law Institute®, Washington, D.C. All rights reserved. Cover photo courtesy of John Pendergrass. Cover and layout by Amanda Frayer. An electronic retrievable copy (PDF file) of this report may be obtained for no cost from the Environmental Law Institute Website at www.eli.org; click on “ELI Publications,” then search for this report. [Note: ELI Terms of Use will apply and are available on site.] (Environmental Law Institute®, The Environmental Forum®, and ELR® — The Environmen- tal Law Reporter® are registered trademarks of the Environmental Law Institute.) Table of Contents

I. Introduction ...... 1

II. The Risk of Forfeiture: Reducing its Disincentive to Sustainability . . . . 3

A. No Forfeiture ...... 5 B. Water Conservation Efforts ...... 6 C. Instream Flow ...... 11 1. Private Right ...... 12 2. Public Trust ...... 17 D. Mitigation ...... 19 E. Underground Storage ...... 21 F. Source Substitution ...... 23 G. Water Banks ...... 26 H. Substantially Used ...... 28

III. Assisting Incentives for Sustainability from the Market ...... 29

A. Allow the Use or Sale of Water Saved ...... 31 B. Accelerate the Transfer Process ...... 36 1. Expedite the Review Procedures ...... 37 2. Protect Third Parties ...... 42 3. Make Time, Place, and Use more Flexible ...... 46

IV. Conclusion ...... 49

Appendix

A. Resource Materials ...... 51 B. Index of State Laws ...... 53 C. State Data ...... 55 D. State Instream Flow Laws ...... 69

Executive Summary

This handbook is intended to support communication within and among states, their respective regulatory and resource agencies, non-profit organizations, municipal water providers, industries, and farming communities about adapting Western state water laws to meet the numerous demand and supply challenges that lie ahead. It also serves as a means of transferring ideas and spurring innovation in policy by collecting some of the more novel approaches to water law in the Western U.S.1 As a result, it is written for a wide audience. The handbook identifies a few specific legal hurdles to sustainable water management posed by the doctrine of prior appropriation and its resulting policy constructs, including forfeiture and abandonment, time-intensive transfer and change-of-use procedures, and restrictions on using conserved water. The handbook then identifies and explains practiced strategies from across the West for addressing these issues, the circumstances under which the policies and programs arose, and the results (in the view of those familiar with their application). In conclusion, the handbook identifies steps to transforming state water laws based on prior appropriation from a means of surviving difficult times through deep-rooted entrenchment in practice and law to a means of softening the impact of what could be significant crises: • Reduce the active disincentives against using less water and supporting future supplies by adding to the definition of “beneficial use” or exempting more activities from forfeiture and abandonment. • Allow the use of conserved water (from reductions in consumption and evaporative losses) beyond what is permitted in the water right. • Accelerate the transfer process, particularly for short-term transfers. The policies and programs included here are not intended to be comprehensive, but rather a selection of illustrative examples that modify the prior appropriation system in a way that has led or could lead to more efficient, adaptive, or sustainable water use decisions.

Methodology

Selection and assessment of the examples in the handbook was the result of statutory review, analysis of legislative history, and secondary source research by the Environ- mental Law Institute, as well as personal communication with state engineers; staff of state agencies, municipal water providers, and nonprofit organizations; representatives of farming interests; and others from the twelve states studied.

1 The twelve Western states included in this study are Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. Western Water in the 21st Century

Introduction Water always has been the lifeblood of drafted, suggesting far less supply in the the Western United States. But its value future than those states rely upon. is now greater than ever, a trend that shows no sign of abating. As populations Increasing demand and uncertain, even continue to rise, regional, national, and declining, supply means that we need to global demand for the region’s resources, figure out a way to “do more with less” or including water and products that rely else face very difficult tradeoff decisions. on it, is also growing. With more people Generally speaking, doing more with less come greater water needs for drink- water requires improving efficiencies ing, bathing, laundry, private lawns, in use and in supply management. Both and public parks. People also demand approaches necessitate adapting policies groceries, energy, processed materials, and practices to changing circumstances services, and recreation, most of which in the short and long term, as well as require water inputs. Additionally, aligning incentives, financial and other- the ecosystem services provided by a wise, with preferred practices. healthy riparian environment, including A number of legal and non-legal factors water quality, flood protection, and water contribute to the state of water manage- storage, depend upon sufficient instream ment, including enforcement of the flows. Thus, there are numerous de- prohibition against waste, the frequency mands on water supplies, but a lack of of measurements, the price of electricity, clear tradeoff alternatives since humans and the availability of labor. The laws appear to need them all. governing water usage are important for Increasing water demands are not the flexibility and guidance. In that realm, only challenge. Greater uncertainty in water districts, the federal government, water supply means an ever-changing and interbasin and interstate transfer baseline for meeting those demands. agreements impose legal constraints on Climate change models predict an inten- water management, but the prior appro- sification of the water cycle, producing priation system, the predominant legal longer droughts and more substantial foundation for water allocation in the floods. Rising temperatures already have West, is a critical consideration. While begun to cause earlier and more intense adaptable, prior appropriation is rule- snowmelt, the source of much of the bound, founded on the historical order West’s water, leaving less water available of rights and quantity of usage. An im- for the late summer and fall if it cannot perfect understanding of the amount of be captured. Additionally, recent data water historically consumed (as opposed show that the average annual flow of the to what returns to the stream), coupled Colorado River was overestimated at the with the preeminent rule that “thou shall time the Colorado River Compact was not injure the rights of other water users,” has fortified established practices

1 behind a series of legal barriers, posing the cost of changing a right. This limits a significant obstacle to improving ef- the ability of water managers to adapt, ficiency in use. encouraging permanent rather than temporary transfers and reducing the Perhaps best known of these laws are the potential for a responsive market. It also doctrines of forfeiture and abandonment. affects the incentive for efficiency. Water Under those, water rights that are not costs for buyers and opportunity costs put to use may be recovered by the state for sellers can be big financial incentives and reallocated to new users; hence the for discovering ways to operate with less adage, “use it or lose it.” These doctrines water. Quick yet thorough transfer re- are meant to discourage speculation views, responsive transfer agreements, and maximize water usage. While the sufficient third-party protections, and anti-speculation aspect of these doctrines the authority to transfer or otherwise may retain some value, continuing to use conserved water (from reduced require historic levels of water usage consumptive use and evaporative losses) (or else risk the loss of the unused por- create incentives for efficient and ef- tion of the right) creates a disincentive fective water use under any hydrologic to conservation and sustainable water condition. practices. In addition, if the use of water is changed to another purpose, it may Particularly in recent years, Western only be to one of a few choices or again states have amended their laws to reduce risk the loss of the right. This ensures the disincentives of prior appropriation that water continues to be put to produc- to sustainable water usage and sup- tive uses, but current understanding of ply management and allow incentives hydrology and ecosystems suggests that for stretching supplies to more easily productive use is more than agriculture, influence the decision-making of right industry, or drinking water. Instream holders. These legal reforms have varied flows, source exchanges, and water from state to state in objective, form, and banking also can be important to protect- success. Given the difference in specific ing the long-term quantity and quality of laws and regulations, as well as growth water supplies. pressures and hydrologic circumstances, there is not necessarily a one-size-fits-all Reducing the disincentives to sustainable reform of prior appropriation, but the water management posed by forfeiture is states can learn from the experiences, only one step toward a prior appropria- both good and bad, of their regional tion system aligned to meet the West’s neighbors. Effective laws that are in line water challenges. Obtaining changes in with social, economic, and environmental the purpose of use, place of use, and point objectives can create greater resilience of diversion are difficult under tradi- to inevitable water crises, and ultimately tional rules. While these laws protect the improve the sustainability of not only rights of other water users from injury, the water supplies, but the societies and they also delay the process and increase environments that rely on them.

2 Western Water in the 21st Century

The Risk of Forfeiture: Reducing its Disincentive to Sustainability The prior appropriation system oper- can occur regardless of intent if nonuse ates as a first-come, first-served method extends beyond a statutory forfeiture pe- of water allocation. Essentially, those riod, which ranges from five to ten years with water rights to a stream or river depending on the state. Those states are given priority based upon the date of without explicit forfeiture doctrines the water right. Traditionally, the oldest commonly have a statutory abandon- right is completely fulfilled, then the ment period by which intent to abandon next oldest, and so forth down the line is inferred from the duration of nonuse, until there is no water left to allocate. effectively serving the same function as Because older (senior) water rights forfeiture. yield more water in a given year than do newer (junior) rights, senior rights While these doctrines still provide some are more valuable. In practice, this can benefit, they also pose significant obsta- mean the difference between three tons cles to sustainable water management. of alfalfa per acre with irrigation that The risk of losing a water right creates lasts through the end of September for a strong disincentive against using it for a senior right holder, and two tons per an unsanctioned purpose or simply re- acre with irrigation through the middle ducing its use. Thus, all else being equal, of July for a junior right holder. water right holders will continue to use water at historical rates and through The doctrines of abandonment and historical means, for fear of losing any forfeiture are designed to assure that unused portion of the right. Water-use water is actually put to a productive end efficiency can reduce input costs such and not merely the subject of hoarding as labor and energy, but the right holder or speculation. They originated in a must balance these benefits with the period when maximizing the short-term potentially lost value of the water right benefits of natural resources was avidly itself. If the objective is doing more with promoted. The state wanted to give less, the law should support that effort, rights to those individuals who would not directly oppose it. use the water. Water rights, or even just portions thereof, that are not put to use There are two primary ways of reducing are subject to permanent recovery by the influence of forfeiture and abandon- the state and reallocation to new users. ment through law. The first, and perhaps “Abandonment” commonly requires most direct, approach is an explicit intent by the right holder to no longer exemption. For example, the rules of for- use the right. “Forfeiture,” however, feiture or abandonment may be deemed

3 not to apply when a water right is depos- Regardless of the approach, the end ited in a water bank, is used to improve result is the same: the use of a water instream flow, or is not used as a result of right for that purpose does not run the conservation or a source exchange. risk of forfeiture or abandonment, and hence legal disincentives to that activ- The second approach involves the state’s ity are reduced if not alleviated. Other definition of “beneficial use.” Right hold- factors such as energy costs, labor, and ers may lose their rights if they do not water supply and demand will have more use them. But to qualify as “use,” the influence on water decisions because this water right must be put to a state-sanc- legal hurdle has less influence. Even if tioned “beneficial” purpose. A purpose these changes are only a codification of of use that is not “beneficial” is not con- existing practice, they can be very help- sidered “use” and therefore is subject to ful in clarifying that practice and easing forfeiture and abandonment. Traditional the concerns of water right holders. The statutory lists of beneficial uses included more of these options that apply to in- agriculture, mining, industry, municipal novations in water supply management use, and other similar, immediate hu- and practices that support efficiency or man activities. By contrast, more recent riparian ecology, the greater the opportu- lists also include water conservation, nity to protect all the valuable demands instream flows, or alternative storage on the water. techniques, among others.

4 Western Water in the 21st Century

This chapter explores examples of how Despite a relatively short track record, states have modified their definition of there have been several noticeable ef- “beneficial use” and exempted certain fects of discarding the forfeiture doctrine activities from forfeiture and abandon- in Nevada. According to state officials, ment in ways that allow right holders to the efficiency of agricultural use supplied use less water for the original purpose by surface water has improved without without the threat of permanently losing this disincentive to nonuse, i.e., forfeiting the right, and open new options for using the water right. Farmers no longer have water that offset the impacts of other an incentive to divert set quantities of uses. water, so they are freer to respond to the influences of water scarcity, labor avail- No Forfeiture ability, and energy costs. The change also has provided added flexibility to water providers who are holding rights for When there is no forfeiture doctrine, the their future needs, primarily municipal. use or nonuse of a water right for any These consequences in Nevada may not purpose, whether deemed beneficial or be the same as they would be in other not, is not subject to recovery by the states since Nevada has very little sur- state for lack of use. The risk of forfeiture face water and almost all of it is under then plays no role in water-use decisions. various decrees.

Nevada While forfeiture of surface water rights is no longer possible in Nevada, forfeiture Prior to 1999, Nevada law governing of groundwater rights is. This distinction surface water included the forfeiture offers some insight into the effect that doctrine. A surface water right was forfeiture can have on water use deci- deemed to be forfeited if the right holder sions. According to one state official, it had failed to use the water for its benefi- is not unusual for a groundwater right cial use for a period of five consecutive holder to hire people to farm using their years. But due in large part to the Alpine water once every five years. There also IV decision, United States v. Alpine Land have been cases of water being pumped & Reservoir Co., 27 F. Supp. 2d 1230 just to show a meter reading. While not (D. Nev. 1998), the Nevada legislature the norm, these acts do highlight the passed Assembly Bill 380 in 1999. more perverse incentives of the forfei- Among other things, that bill changed ture doctrine, and have led some within Section 533.060(2) of the Nevada Re- the state to name the groundwater for- vised Statutes from a law that embodied feiture statute as the biggest obstacle to the forfeiture doctrine to one that explic- water use efficiency in Nevada. itly rejected it.2

2 Ne v . Re v . St a t . § 533.060(2) (“Rights to the use of surface water shall not be deemed to to use the water therefrom for a beneficial be lost or otherwise forfeited for the failure purpose.”).

5 There are a number of other Western even remain constant, let alone decrease, states that do not recognize forfeiture “conservation” has resulted merely in a per se. But they accomplish the same swap between water at the point of diver- objective as forfeiture through the state’s sion and at the point of return, leaving abandonment statute, by presuming the more water instream between the two intent to abandon a water right after a points and likely improving water qual- set number of years of non-use. Nevada ity. By including water conservation does not use its abandonment statute in within the definition of “beneficial use” quite this manner. A ruling by the state or excluding it from forfeiture, any disin- engineer in 2004 notes that non-use is centive to conserve from a fear of losing “some evidence” of intent to abandon, but part of a water right can be reduced or non-use alone is insufficient proof and nullified. there is no set number of years that raise a rebuttable presumption of abandon- California ment (Nev. State Engineer Ruling No. 5464). In 1977, the California Legislature passed a statute declaring water conservation to Water Conservation Efforts be the equivalent of a beneficial use.3 The statute was a result of recommendations One of the often-cited problems with the by the Governor’s Commission on Water prior appropriation system is that it Rights, which supported making conser- punishes water conservation efforts by vation a beneficial use because it believed threatening to take away whatever water the change would remove the existing is not used. Water conservation is defined disincentive to water use reductions. differently in different states, in some (Felix 2005, at 170) instances including water that eventu- As allowed under the statute, the State ally returns to the river and in other Water Resources Control Board (SWRCB) instances including only reductions in consumptive use and evaporative losses. 3 Ca l . Wa t e r Co d e § 1011(a) (“When any person entitled to the use of water under an When the issue is only whether part of appropriative right fails to use all or any part a water right is forfeited or abandoned of the water because of water conservation efforts, any cessation or reduction in the use due to conservation, not whether the of the appropriated water shall be deemed conserved water may be otherwise used equivalent to a reasonable beneficial use of or sold (see Chapter III), the definition water to the extent of the cessation or reduction in use…The board may require that any of conservation does not pose as great user of water who seeks the benefit of this sec- a threat of expanding rights to water. tion file periodic reports describing the extent Reducing the amount of water diverted and amount of the reduction in water use due from the stream is unlikely to result to water conservation efforts…For purposes of this section, the term ‘water conservation’ in notably greater consumption. If shall mean the use of less water to accomplish consumptive use and evaporative losses the same purpose or purposes of use allowed under the existing appropriative right.”).

6 Western Water in the 21st Century

requires permitees and licensees who Code defines “conserved water” as “that wish to use this water right protection amount of water saved by a holder of an to have previously filed a report about existing permit, certified filing, or certifi- the amount of water being conserved. cate of adjudication through practices, To simplify this process, the SWRCB has techniques, and technologies that would changed its periodic reporting forms to otherwise be irretrievably lost to all include a section about conservation. consumptive beneficial uses arising from Requiring reporting helps differentiate storage, transportation, distribution, or conservation from mere nonuse: the application.” permitee or licensee must at least ac- knowledge the conservation on the re- Texas also exempts water saved under porting form in order to claim the protec- a conservation plan from forfeiture 5 tion. Going one step further, the SWRCB (termed “cancellation” in Texas). This examines the intent of the nonuse when provides double assurance that water a permitee or licensee petitions for a rights unused due to conservation change of use or place of use of conserved measures will not be lost. In 2003, the water. Petitions have been denied when Texas Legislature established a Water the SWRCB finds the intent of the nonuse Conservation Implementation Task Force to be other than conservation. in an effort to realize the full potential of water conservation in the state. The Task While there is little doubt that this stat- Force submitted its report to the legisla- ute topples a legal barrier to efficiency, ture in November of 2004, and one of the few right holders have claimed conserva- recommendations was to give the Texas tion credits or attempted to avoid forfei- Commission on Environmental Quality ture using it. Most water conservation authority to exempt a water right from efforts in California have reduced just cancellation if the nonuse resulted from enough usage to avoid the need for new water conservation measures. With the appropriations, but not enough for new understanding that this exemption would uses. Still, where it has been used, the encourage water conservation, the Texas statute has improved use efficiency. Legislature amended the cancellation statute in 2005 to include the exception Texas recommended by the Task Force.

Under the Texas Water Code, “conserved 5 Te x . Wa t e r Co d e Ann . § 11.173(b) (“A permit, water” is explicitly noted as a beneficial certified filing, or certificate of adjudication or use of water.4 Section 11.002(9) of the a portion of a permit, certified filing, or certificate of adjudication is exempt from cancel- 4 Te x . Wa t e r Co d e Ann . § 11.002(4) (“‘Benefi- lation … (5) to the extent the nonuse resulted cial use’ means use of the amount of water from the implementation of water conserva- which is economically necessary for a purpose tion measures under a water conservation authorized by this chapter, when reasonable plan submitted by the holder of the permit, intelligence and reasonable diligence are certified filing, or certificate of adjudication as used in applying the water to that purpose evidenced by implementation reports submit- and shall include conserved water.”). ted by the holder.”).

7 Classifying water conservation as a In fact, such language was removed from beneficial use and exempting it from the 2007 bill, HB 443, that now prohibits cancellation has provided internal con- diminishing a water right because of use sistency in Texas water law in light of the reductions from irrigation improvements water conservation plan requirements or other changes in agricultural practic- under Texas Water Code Section 11.1271. es.6 While the state does not explicitly Conservation plans are to be completed deem conservation to be a use, it also by applicants for new or amended water does not subject it to the same penalties rights as well as existing high-volume us- as nonuse, at least in the agricultural ers and requires “the adoption of reason- context. able water conservation measures” and “specific, quantified 5-year and 10-year The New Mexico Legislature first amend- targets for water savings.” Without these ed the water allowance statute in 2003 to statutory amendments, the amount of explicitly prohibit an owner’s rights from water conserved under the required being diminished as the result of water plans would be subject to cancellation -- a conservation via “improved irrigation significant disincentive to implementing methods.” This change was only meant to the plans. codify the existing practice of the state engineer: not forfeiting the portion of a But aside from legal consistency, these water right that went unused because amendments have not had much impact. of water conservation efforts. (SB 128 This is commonly attributed to the lack Fiscal Impact Report 2003, at 1) The bill of enforcement of cancellation in Texas. raised concerns about whether allowing Additionally, conservation plans are saved water to be put to additional ben- mandatory for many water users, so eficial use would increase depletions of right holders already will be reducing water in the system. This argument was their usage; there is no need for further countered by the question of whether incentive. Third, the financial benefit there is any incentive to irrigators to from water conservation in Texas com- conserve water if their savings cannot monly is energy rather than available be otherwise used. Ultimately, the bill water—less pumping equals less cost. Of- passed without further elaboration. ten right holders just let their conserved water go downstream rather than trying In 2007, the New Mexico Legislature to lease or sell it. But, the amendments sought to clarify the allowance regarding do have a more subtle effect: their exis- conserved water. Most notable in the tence adds to the social consciousness of enacted version of this bill is the new water conservation. authority granted to the state engineer

6 N.M. St a t . Ann . § 72-5-18(B) (“Improved New Mexico irrigation methods or changes in agriculture practices resulting in conservation of water shall not diminish beneficial use or otherwise New Mexico statutes do not expressly affect an owner’s water rights or quantity of label conserved water as a beneficial use. appurtenant acreage.”).

8 Western Water in the 21st Century

to approve a change of use, place of use, In practice, this forfeiture exemption or point of diversion for conserved irriga- has encouraged water conservation. tion water. (This is discussed in greater Removing the legal disincentive against detail in Chapter III). But the 2007 bill using less water has left little reason not also added “changes in agricultural to follow market pressures such as labor practices” as a potential means of water availability and energy costs, both of conservation and justification for retain- which tend to favor efficiency. But the ef- ing the water right. Thus, this statute fect of this exemption likely is limited by effectively increased the possibilities of the fact that the Oregon Water Resources what will qualify as conservation. Department had not actively enforced partial forfeiture. Oregon As written, the exemption includes two requirements that still create perverse Like many Western states, Oregon’s incentives. First, the fact that the facili- forfeiture statute applies to all or a por- ties must be able to accommodate the tion of a water right that is not used. full amount of the right forces the main- Typically, if an Oregon right holder uses tenance of larger facilities than may be only two-thirds of the right for five con- needed for current usage. Fish screens, secutive years, one-third of the original among other aspects of the facilities, water right is forfeited. But in 1997, the are more effective if designed for the Oregon Legislature amended the state’s amount of actual diversion rather than forfeiture statute to exempt rights that the amount of the water right. Second, are not fully used but still accomplish 7 the requirement that the user be “ready, their respective original purposes. willing and able” to use the full right can Under this exemption, if the right holder add a hurdle to prolonged conservation uses only two-thirds of the original water efforts: needing to retain the ability to right to accomplish the same objective use the full right at any time despite the as with the entire right, the remaining fact that the full amount may never again one-third of the right is not forfeited, i.e., be used there (Aylward 2008, at 29). the entire right is preserved. Plus, this The legal or practical benefits of these remaining one-third of the water right, if requirements are debatable at best. not put to another use, increases streamflow and supports downstream junior water rights. Idaho

7 Or. Re v . St a t . § 540.610(3) (…if the owner of In 2003, the Idaho Legislature added a perfected and developed water right uses nonuse resulting from conservation to its less water to accomplish the beneficial use 8 allowed by the right, the right is not subject to statutory exemptions from forfeiture. forfeiture so long as: (a) The user has a facility capable of handling the entire rate and duty 8 Id a h o Co d e § 42-223(9) (“No portion of any authorized under the right; and (b) The user is water right shall be lost or forfeited for nonuse otherwise ready, willing and able to make full if the nonuse results from a water conservation use of the right.). practice, which maintains the full beneficial

9 The legislature defined “water conserva- tified manner. Other exemptions require tion practice” in Section 42-250 of the the filing of an application for nonuse Idaho Code as “any practice, improve- with the state engineer in order for the ment, project or management program exemption to apply, and only then for that results in the diversion of less than up to seven years. While the application the authorized quantity of water while process makes the forfeiture exemptions maintaining the full beneficial use(s) au- for these uses, including conservation thorized by the water right.” Thus, as in and efficiency, more burdensome to the Oregon, the full beneficial use of the wa- right holder, they serve a similar purpose ter right still must be accomplished, but as categorical exemptions. in Idaho there are no facility capacity or “ready, willing and able” requirements. To date, neither conservation nor efficiency has been used much, if at all, According to the official statement in nonuse applications. Since a nonuse of purpose, “This legislation defines, application is required, if conservation encourages and supports water con- or efficiency were cited as a reason for servation practices.” As with similar nonuse, there would be a record of it. provisions, the intent of the forfeiture Thus, it is fair to say that this statutory exemption is to not impede conservation, provision has had little influence. But, it allowing other factors to influence use still is relatively new and has potential to decisions. This exemption is relatively encourage conservation and efficiency, new, so its influence has yet to be fully especially among water districts. realized. It has been used in defining the quantities of a water right in adjudica- This provision was amended in 2008 to tions, but whether it has affected water remove the limiting word “recognized” use decision-making is unclear. as a modifier of “water conservation or efficiency practices.” While this change Utah theoretically could expand what is included under these practices, its true effect is yet unclear. In 2002, Utah added conservation and efficiency as justifications for nonuse.9 Under Utah law, some exemptions from Colorado the forfeiture statute require no other action than just using the water in the iden- Colorado does not have a forfeiture statute, but under its laws, nonuse of water use authorized by the water right...”). for ten consecutive years or more raises 9 Ut a h Co d e Ann . § 73-1-4(4)(a) (“The state a rebuttable presumption of abandon- engineer shall grant a nonuse application on ment. The state statutorily exempts all or a portion of a water right for a period of time not exceeding seven years if the ap- specific circumstances from the rules plicant shows a reasonable cause for nonuse. of abandonment. In 2005, the Colorado (b) A reasonable cause for nonuse includes: General Assembly expanded this list. … (ii) the initiation of water conservation or efficiency practices…”). Included within those additions are three

10 Western Water in the 21st Century

that explicitly pertain to water conserva- significant adverse effects, on individual tion efforts: (1) a water conservation agricultural communities. program approved by the state, a conservation district, or a conservancy district, But the statutory addition to Colorado’s (2) a water conservation program estab- abandonment exemptions has thus far lished through written action or munici- had little effect on the “Super Ditch” pal ordinance, and (3) an approved land project or other irrigators, in large part fallowing program.10 because fallowing usually occurs for rights transfer purposes rather than Land fallowing has been relatively com- strictly for conservation. This should not mon in Colorado at the level of individual overshadow the fact that the amendment farms and ranches and occasionally at does relieve any concerns about aban- the level of ditch companies. With rapidly donment that may be felt by irrigators growing populations, particularly in sub- considering a conservation-based fallow- urban Denver areas, and recent drought ing program. As water supply pressures periods, a variety of temporary land mount, this amendment may prove fallowing agreements as well as long- valuable. term fallowing have become a means of supplying municipal water demands. On Instream Flow a larger scale, the Lower Arkansas Val- ley Water Conservancy District fostered the creation of the so-called “Super Arizona, California, Colorado, Idaho, Ditch,” a for-profit corporation formed Montana, Nevada, New Mexico, Oregon, by irrigators to coordinate rotational Texas, Utah, Washington, and Wyoming fallowing by many irrigators to supply all classify recreation and fish or ripar- water for growing needs in the state with ian area preservation as beneficial uses. significant positive effects, and without These uses, in addition to a few similar ones in other states, are the basis for rights to instream flows. The concept of 10 Co l o . Re v . St a t . § 37-92-103(2) (“…Any pe- instream flow is counter to the classic riod of nonuse of any portion of a water right shall be tolled, and no intent to discontinue tenets of prior appropriation, and can permanent use shall be found for purposes of require an exception to one fundamental determining an abandonment of a water right aspect of traditional beneficial use in for the duration that: (a) The land on which the water right has been historically applied many states, the need for a physical is enrolled under a federal land conservation diversion. Some states also exempt program; or (b) The nonuse of a water right is a instream flow uses from forfeiture. result of participation in: (I) A water conservation program approved by a state agency, Where recognized, instream flow rights a water conservation district, or a water conservancy district; (II) A water conservation protect a number of human uses, includ- program established through formal written ing recreation and fishing, as well as action or ordinance by a municipality or its valued ecosystem services such as water municipal water supplier; (III) An approved land fallowing program as provided by law in purification, flood protection, and a buf- order to conserve water…”). fer for water supplies. Where instream

11 flow rights may be temporary, rather Nevada than a permanent dedication, they can offer a means of meeting emergency In 1969, the Nevada Legislature en- environmental needs without sacrific- acted a statute recognizing recreation ing the normal year-to-year use of the as a beneficial use.12 While this formal water. Classifying instream flow as a declaration is not groundbreaking, the beneficial use of water or exempting it instream flow policies in Nevada that de- from forfeiture provides the opportunity veloped from this statute are unique. In to accomplish multiple objectives and the 1988 case of Nevada v. Morros, 766 improve the long-term sustainability of P.2d 263, 267 (Nev. 1988), the Supreme water supplies. Perhaps more important, Court of Nevada found that diversions it sends a clear signal to water users that are unnecessary and often incompatible water rights will not be lost if used for with most water recreation, leading it to this purpose. the conclusion that an actual diversion is not necessary to perfect an instream flow Private Right right. The court also held in that case that “wildlife watering” falls under the definition of recreation, since the legisla- Each state has a unique set of rules on ture had intended that result. who, if anyone, may appropriate a new right for instream flow uses and who In Nevada, instream flow rights are may transfer and hold an existing right treated the same as other water rights. 11 that has been changed to those uses. Any person, whether an individual, New appropriations are the most junior private organization, or government rights on the river, therefore new ap- agency, may appropriate a new right propriations for instream flow are only for instream flow or change the use of valuable for habitat protection. In effect, an existing right to instream flow. Also, these new rights simply maintain the such changes of use may be temporary or status quo, protecting instream flows permanent. In practice, those who actu- from new demands for the water. But ally hold instream flow rights range from the opportunity to change the purpose of water suppliers, to tribes, to government use from consumption to instream flows entities. Agreements, like those between is critical to restoring riparian habitat suppliers and tribes, occasionally result because it replenishes water that nor- in instream flow rights to protect cultur- mally is removed from the stream. When ally and environmentally important the right holder may continue to hold the riparian areas. right while its purpose of use is changed to instream flow, it is a private instream flow right. 12 Ne v . Re v . St a t . § 533.030(2) (“The use of water, from any stream system as provided in this chapter and from underground water as provided in NRS 534.080, for any recreational 11 For more information, see chart of state purpose, is hereby declared to be a beneficial instream flow laws in Appendix D. use.”).

12 Western Water in the 21st Century

Nevada has very little surface water, are lending flexibility to water use in and this statutory provision has been Montana. helpful in supporting instream flows. For example, in the Reno-Sparks area, much This statute has had influence inde- of the water that has been transferred pendent of the Bean Lake III decision. from agricultural use has gone not just to Naming recreation, fish, and wildlife as municipal use, but also to instream flows. beneficial uses has eased the transition to instream flows by aiding cultural Montana

In 1973, the Montana Legislature passed the Water Use Act, which included recreation, fish, and wildlife in the definition of beneficial use.13 In the 2002 Bean Lake III decision, 55 P.2d 396 (Mont. 2002), the Su- preme Court of Montana held that not only were these purposes recognized as beneficial uses prior to the Water Use Act, but that no diversion was required acceptance of flow as “use.” The current for a valid appropriation. Through the definition of beneficial use also references statute and judicial decision, instream two other statutes, Montana Code Sec- flow uses have become feasible and tions 85-2-408 and -436. These statutes serve the same purpose, allowing the 13 Mo n t . Co d e Ann . § 85-2-102(4) (“‘Beneficial temporary change of an existing right use’, unless otherwise provided, means: (a) a to instream flow, but -436 applies to the use of water for the benefit of the appropriator, other persons, or the public, including Montana Department of Fish, Wildlife, but not limited to agricultural, stock water, and Parks while -408 applies to everyone domestic, fish and wildlife, industrial, irrigation, else.14 Much of the growing participation mining, municipal, power, and recreational uses … (c) a use of water by the department in and success of conservation and res- of fish, wildlife, and parks through a change toration efforts for Montana’s rivers and in an appropriation right for instream flow to streams have been attributed to these protect, maintain, or enhance streamflows to two statutes. benefit the fishery resource authorized under 85-2-436; (d) a use of water through a tempo- 14 The fact that there are two statutes of this rary change in appropriation right or lease to nature is a function of history rather than a enhance instream flow to benefit the fishery strategic division of rights; -436 was passed in resource in accordance with 85-2-408…”). 1989 and paved the way for -408.

13 Presently only the Montana Department (recreation and fish and wildlife pres- of Fish, Wildlife, and Parks (FWP) and ervation are beneficial uses) a means of U.S. Forest Service may permanently protecting instream flows beyond the transfer existing rights to instream flow state’s minimum flow levels.15 Section uses, and only on a limited basis. But 1243 supports Section 1707(a)(1), temporary transfers have been gaining which makes explicit the permission to momentum in the state, particularly in change the use of an existing right to one areas with a history of environmental of the listed instream flow purposes.16 restoration, like the Blackfoot Basin. Section 85-2-408 limits right holders’ Since Section 1707’s enactment in 1991, change of water rights to instream flow several cases of changing use to instream to no more than 10 years, or 30 years if flow have been approved. In some in- the water is the result of a conservation stances there were monetary incentives or storage project, but with an option to change the use and then lease the to renew. Section 85-2-436 lays out the water for fish passage and other envi- same opportunities and restrictions for ronmental purposes. In other instances, instream flow leases by FWP. Few private the authority of the State Water Re- water right holders have done this on sources Control Board to force diversion their own; most people interested in this bypasses under the trust doctrine has option have leased their rights to the played a role in encouraging the change Montana Water Trust or Trout Unlimited. to instream flow. There have been approximately 30 Section 1243 itself has promoted flexibil- such transfers, with numbers increas- ity in the system and balanced ecological ing in recent years. These leases take and consumptive uses in a mutually ben- large chunks of concentrated time, but eficial manner. For example, the statute the process is getting streamlined as has allowed several right holders in the those involved gain experience with the Sacramento River Basin to change their procedures. point of diversion from a small creek to the main stem of the river, often with California the help of public funds, to benefit fish populations. Instances of land fallowing Unlike some states, California still requires a diversion in order to appropriate 15 Ca l . Wa t e r Co d e § 1243 (“The use of water water. This rule prohibits the appropria- for recreation and preservation and enhance- tion of new water rights for instream ment of fish and wildlife resources is a beneficial use of water…”). flow purposes. But changing the use of 16 Ca l . Wa t e r Co d e § 1707(a)(1) (“Any person an existing right to instream flow can entitled to the use of water, whether based avoid this requirement because the right upon an appropriative, riparian, or other right, at one point was a quantified diversion may petition the board pursuant to this chapter … for a change for purposes of preserving right. This interpretation has made Sec- or enhancing wetlands habitat, fish and tion 1243 of the California Water Code wildlife resources, or recreation in, or on, the water.”).

14 Western Water in the 21st Century

and groundwater usage in lieu of surface This statute is commonly viewed to flows for the sake of environmental have had limited practical effect since it protection also have been attributed to only applies in the case of cancellation Section 1243. hearings, and cancellation is not often enforced in Texas. Even then, the statute Permanent transfers for instream flows, only requires the commission to consider or any separation of water from land, whether the water was reserved for occur rarely if ever in California. This is instream flows when determining if the due in large part to the fact that neither nonuse is justified. It is not certain that a permitee (Cal. Water Code § 1392) nor reservation for instream flows always licensee (Cal. Water Code § 1629) may will be a justified nonuse. Thus, there sell a water right for more than was origi- is no assurance to the right holder that nally paid for it. water rights reserved for instream flow use will not be cancelled. Texas But, the legislature’s 2007 declaration of instream flows as a beneficial use In addition to explicit exemptions from may provide the assurance that the its cancellation statute, Texas also al- cancellation statute does not. The Texas lows nonuse without cancellation under Legislature extended the normal protec- certain circumstances, one of which is tions and opportunities of water rights instream flows. In 1997, the state legis- to instances in which they have been lature set out conditions that the Texas changed to an instream flow use.18 This Commission on Environmental Quality allows an instream flow right to be pri- must consider at the end of a cancellation vately held and leased or sold, increasing hearing in order to determine whether both the number of potential parties nonuse was justified. Among these condi- that may promote restoration and the tions is whether a water right has been possible financial benefits to the original reserved for instream flows or bay and right holder. The state has a water trust, estuary inflows.17 These revisions were a but dedication of instream flow rights to part of a broader bill designed to improve the trust is not mandatory and only a few water management decisions in the face right holders have done it. of heightened environmental concerns and competition for water. In Texas, a change of use to instream flow follows the same rules as any other change of use. In the past, there was little

17 Te x . Wa t e r Co d e Ann . § 11.177(b) (“In deter- 18 Te x . Wa t e r Co d e Ann . § 11.0235(d-1) (“The mining what constitutes reasonable diligence legislature has determined that existing water or a justified nonuse as used in Subsection (a) rights that are amended to authorize use for (2), the commission shall give consideration to environmental purposes should be enforced in … (5) whether the permit, certified filing, or cer- a manner consistent with the enforcement of tificate of adjudication has been reserved to water rights for other purposes as provided by provide for instream flows or bay and estuary the laws of this state governing the appropria- inflows.”). tion of state water.”).

15 administrative review of use changes, use, why, and for how long. The water which made the process relatively quick right for which the fishing group seeks and easy. But a recent decision of the a change of use must be a perfected, Texas Supreme Court raised the expecta- consumptive right. In other words, it tions of analyses by the Texas Commis- must be an established right that has sion on Environmental Quality. Exactly been fully diverted in previous years and what these analyses now will entail is put toward a consumptive use like crop up in the air, but administrative review production. Further, the fishing group is bound to become more thorough for must identify the precise stream section changes of use to instream flows and in which it seeks to increase flows, and other purposes. the protection or restoration must be focused on one of three specific native Utah fish species. These changes of use may be for no more than 10 years, and the fishing group must receive the approval In 2007, the Utah Legislature expanded of the Utah Division of Wildlife Resources its definition of beneficial use to include before filing the change of use application instream flow use by fishing groups in with the state engineer. certain circumstances.19 As seen above, fishing groups have been influential in re- Given the statute’s recent enactment and storing stream flows in states that allow narrow scope, there has been little expe- anyone to hold water rights that have rience to date with its implementation. been changed to instream flow. Thus, this statute creates a narrow exemption for a proven means of flow restoration. The Arizona Utah statute defines “fishing group” as an organization that is tax-exempt and Arizona law regarding instream flows “promotes fishing opportunities in the is unique in that it allows any person state.” An organization like Trout Unlim- to appropriate water for the purpose ited would qualify under this definition. of recreation or wildlife, including fish, but effectively prohibits the holder of an This statute is narrow not only in who existing water right from changing its may hold the right, but also in what use to instream flow without transfer- rights are approved for a change of ring it to the state. A water right holder may transfer the use of water to another 19 Ut a h Co d e Ann . § 73-3-30(3)(a) (“A fishing group may file a fixed time change applica- location without losing the right’s prior- tion on a perfected, consumptive water right ity date. But if the right holder wishes to for the purpose of providing water for an use the water for instream flow purposes, instream flow, within a specified section of a natural or altered stream channel, to protect the statute requires that the right be or restore habitat for three native trout: (i) the permanently transferred to the state, or Bonneville cutthroat; (ii) the Colorado River a subdivision thereof, if it is to retain its cutthroat; or (iii) the Yellowstone cutthroat … 20 (7) Water used in accordance with this section priority date. is considered to be beneficially used…”). 20 Ari z . Re v . St a t . § 45-172(A) (“A water right

16 Western Water in the 21st Century

Arizona law also allows the right holder to retain the water right when put to Public Trust instream flow use, but at the expense of the right’s priority date. Since an Most Western States that do not allow established water right is valuable private parties to retain control of a largely because of its seniority, losing water right once it has been changed the priority date is effectively the same to instream flow do allow permanent as losing the right. Retaining the right donations to the state for that purpose. under a new priority date is analogous to But allowing only permanent donations, appropriating a new right. Since Arizona or even sales, to the state still limits the allows any person to appropriate a new long-term options for the right holder water right for instream flow, this is not and can be viewed as similar to “losing” an opportunity unique to existing right the right. Colorado, Oregon, Utah, and holders and offers no greater flexibility Washington try to address this concern in the use of a water right for instream by classifying as beneficial use or ex- flow purposes than does the opportunity empting from forfeiture or abandonment to permanently transfer the right to the temporary water right transfers to the state. state for instream flow. The resulting instream flow rights are similar to those Allowing a right holder to put a water in states that allow a private party to right to use for instream flow only when hold the instream flow right, except that dedicating that right to the state is not the right must be transferred to the state unusual in the West. However, the fact for as long as it is put to an instream flow that the state allows any person to hold use. Oregon and Washington each have an instream flow right when newly established a highly publicized water appropriated, but not when changed trust within a state agency to manage from an existing right is contrary to instream flow rights. the approach of many other Western States. Arizona’s instream flow laws are Oregon progressive for appropriations but fairly restrictive for existing uses, which pro- In Oregon, an instream flow right is motes preservation but limits restora- defined as “a water right held in trust tion, responsiveness, and options for use. by the Water Resources Department for the benefit of the people of the State of may be severed from the land to which it is ap- Oregon to maintain water in-stream for purtenant or from the site of its use if for other public use.” (Or. Rev. Stat. § 537.332) than irrigation purposes and with the consent Instream flow rights may not be held and approval of the owner of such right may be transferred for use for irrigation of agricul- by private parties, but, anyone may tural lands or for municipal, stock watering, purchase, lease, or accept as a gift an power and mining purposes and to the state existing water right for the purpose of or its political subdivisions for use for recreation and wildlife purposes, including fish, without converting it to instream use. During the losing priority theretofore established…”). time the water right is used for instream

17 flow purposes, permanently or temporar- managed by the Washington Department ily, it is held in trust by the state and is of Ecology.22 The same year, 1991, that considered to be beneficially used.21 the state-wide trust was authorized, the state definition of “beneficial use” was Water right leases, which are five years expanded to include the use of trust or less in Oregon, and other transfers water rights for instream flow purposes. for instream flow purposes have been very common: approximately 1,000 But not until ten years later, in the leases and transfers totaling around 500 midst of exempting instream flows from cubic feet per second throughout the multiple aspects of the state water code, state (http://www.oregon.gov/OWRD/ did the legislature explicitly exempt mgmt_instream_milestones.shtml). The instream flows from forfeiture, termed fact that a water right held in the public “relinquishment” in Washington.23 This trust for instream flow is classified as a statutory amendment likely is not neces- beneficial use has encouraged the dedica- sary since instream flow use of a trust tion of water rights to the state for this water right already is explicitly labeled purpose. The objectives of individual in law as a beneficial use. Relinquishment donors varies from ecological preserva- only is a concern when a water right is tion, to payments from an environmental not being applied to its beneficial use. But organization, to simply trying to avoid this amendment does provide consisten- forfeiture, but in each case the fact that cy within state law, clarifying that trust instream flows are a beneficial use makes water rights, whether used for instream the objective possible and increases the flows or another purpose, are not subject flexibility of the owner’s right to water. to relinquishment.

Washington It is difficult to gauge the direct effects of labeling instream flow use as beneficial or exempting it from relinquishment in In Washington, as in Oregon, when Washington. But without one of these the use of an existing water right is statutory amendments, the trust pro- changed to instream flow, the right is gram might not be possible. If instream simultaneously transferred to the state flow was not made a beneficial use or for the duration of the change of use, be exempted from forfeiture, the trust it permanent or time-fixed. The state would need to defend its use of water for trust water rights program, in which all instream flow for more than five consecu- such instream flow rights are held, is tive years under a different beneficial

21 Or. Re v . St a t . § 537.348(2) (“Any person who 22 Wa s h . Re v . Co d e § 90.42.040(1) (“…Trust has an existing water right may lease all or a water rights acquired by the state shall be held portion of the existing water right for use as or authorized for use by the department for an in-stream water right for a specified period instream flows, irrigation, municipal, or other without the loss of the original priority date. beneficial uses…”). During the term of such lease, the use of the 23 Wa s h . Re v . Co d e § 90.14.140(2) (“… there water right as an in-stream water right shall be shall be no relinquishment of any water right … considered a beneficial use.”). (h) If such right is a trust water right…”).

18 Western Water in the 21st Century

use category, such as fish. This practical 2007, amending the abandonment stat- difficulty likely is the reason why the ute has aided these efforts. Clarifying legislation enacting the trust expanded that a water right is not subject to aban- the definition of beneficial use to include donment while loaned to the Board has instream flows. eased the concerns of some water right holders contemplating this option. The There is debate about the effectiveness added justification for nonuse also has of the trust water rights program as the potential to encourage instream flow compared to allowing anyone to hold an loans as a means of protecting a portion instream flow right, but there is little of a water right not currently needed. question that the trust has been important to riparian protection and restoration as well as flexibility in water right Mitigation use in Washington. Under prior appropriation, changing the Colorado purpose or place of use is rarely seamless. Geologic and hydrologic variables often make it difficult to move water as As noted above, Colorado does not have a desired without detrimental impacts to forfeiture statute, but a rebuttable pre- the rights of others. Mitigation patches sumption of abandonment is established some of these seams by, among other if water is unused for ten consecutive things, replacing the water that was years. In 2007, the Colorado General removed. Defining the use of water for Assembly added another justification for mitigation purposes as beneficial or nonuse that rebuts the presumption, this exempting it from forfeiture can allow time one that pertains to instream flow more options for the use of water while use.24 All instream flow rights, whether encouraging greater responsibility in permanent or temporary, are held in water management. trust by the Colorado Water Conserva- tion Board. The only way for water right holders to participate in instream flow Idaho protection without threat of abandoning a right is through the Board. In 2004, the Idaho Legislature added nonuse that results from approved While the Board had entered into water mitigation efforts to its list of forfeiture right loans for instream use prior to exemptions.25 According to the official 24 Co l o . Re v . St a t . § 37-92-103(2) (“…Any period of nonuse of any portion of a water right 25 Id a h o Co d e § 42-223(10) (“No portion of any shall be tolled, and no intent to discontinue water right shall be lost or forfeited for nonuse permanent use shall be found for purposes of if the nonuse results from the water right being determining an abandonment of a water right used for mitigation purposes approved by the for the duration that … (b) The nonuse of a director of the department of water resources water right is a result of participation in … (V) A including as a condition of approval for a new loan of water to the Colorado water conserva- water right appropriation approved pursuant tion board for instream flow use…”). to section 42-203A, Idaho Code, a water right

19 statement of the bill’s purpose, “this Montana legislation is to provide assurance that a water right is not subject to forfeiture for In 2007, Montana amended its defini- non-use if it is being used as approved by tion of beneficial use in the course of the Director of the Department of Water establishing new groundwater use and Resources to mitigate for the effects of storage laws. Among the laws enacted as using water under a portion of the same part of this package was a requirement to or another water right.” In essence, this replace pumped groundwater or mitigate statutory amendment serves as support the hydrologic effects of that withdrawal for the decisions made by the Director, when newly appropriating groundwater specifically those making use more flex- in a closed basin. To accommodate this ible but protecting existing users and the requirement, the state added “aquifer environment. recharge or mitigation” to the definition of beneficial use of surface water.26 This This statutory amendment applies to amendment makes possible a change of specific instances, each of which can use of existing water rights to aquifer improve the flexibility and adaptability recharge with no intent of future use, of water management. Appropriating a change to instream flow to offset flow new rights or transferring or exchang- reductions from pumping, and other such ing existing rights can be important to uses. It increases the flexibility of water getting water where it is most needed. use and promotes responsible coordina- Conditioning a new right, transfer, or tion of surface and groundwater. exchange on minimizing the resulting impacts often is valuable, or even criti- This amendment is relatively recent, and cal, for protecting existing water users the public discussion of aquifer recharge and the environment from the effects and mitigation is still in its early stages. of these actions. Without a condition, But this new beneficial use category such an action might not be approved. already has been applied in a few cases in By explicitly protecting water rights not the Upper Missouri River Basin. In those used due to such an approval condition, instances, wells were affecting river the law is clear that following mitigation flows, so the use of several established requirements set out by the Director will water rights were changed to recharge not adversely affect the right. and diverted for that purpose. This option helped the Montana Department of The practical impact of this exemption is Natural Resources and Conservation out yet unclear. of a difficult regulatory dilemma.

There is some concern among the transfer approved pursuant to section 42-222, state’s environmental community that Idaho Code, a water exchange approved pursuant to section 42-240, Idaho Code, or a 26 Mo n t . Co d e Ann . § 85-2-102(4) (“‘Beneficial mitigation plan approved in accordance with use’, unless otherwise provided, means … (e) rules promulgated pursuant to section 42-603, a use of water for aquifer recharge or mitiga- Idaho Code.”). tion...”).

20 Western Water in the 21st Century

adding aquifer recharge and mitigation beyond the statutory forfeiture period. to the list of approved uses of water Thus, including underground storage in will increase demand for, and hence the the definition of beneficial use may be price of, senior rights for instream flow necessary to encourage this practice, let and other purposes, thus limiting the alone for it to be legally viable. effectiveness of those programs. But higher prices may be welcome news for Montana senior right holders and have potential to promote greater efficiency by any user The same Montana bill that added since there would be significant financial aquifer recharge and mitigation to the incentives to reducing consumption. definition of beneficial use in 2007 also authorized aquifer storage and recovery Underground Storage projects in closed basins. To make this legally feasible, the legislature classified With a greater understanding of the the use of water for aquifer storage and 27 environmental impacts of dams, and subsequent recovery as beneficial. The the resulting political obstacles to their state has yet to set regulations on these construction, states have turned to other projects, including whether and when means of water supply management. stored water must be pumped and used. When storage space is available in an Aquifer storage and recovery projects aquifer, there is potential to use it like have not been developed as quickly in available space behind a dam. Aquifer Montana as have recharge and mitiga- storage and recovery adds flexibility in tion efforts. But storage and recovery the use of existing water rights, such as likely will gain momentum in the coming storing water unused because of crop years. As with recharge and mitigation, rotation and then using it in a dry year. storage and recovery presents an added But this approach also has significant opportunity for existing right holders implications for supplementing existing and may generate added competition for rights. A water user may appropriate senior rights. The implications of higher water in winter months or a particularly values for water rights may be detri- wet year, when there is water available mental for existing purchasers like the for new appropriation, and store it un- Montana Water Trust, but might improve derground until it is needed. Storage and use efficiency overall. extraction of surface water in an aquifer can promote conjunctive management of ground and surface water as well as improve long-term supply management. This use of water may not fit under a 27 Mo n t . Co d e Ann . § 85-2-102(4) (“‘Beneficial state’s traditional water storage laws, use’, unless otherwise provided, means … (f) a and the storage period may extend use of water for an aquifer storage and recovery project...”).

21 California Aquifer storage and recovery also can be applied on a larger scale, opening the California classifies aquifer storage as opportunity for groundwater banking. In beneficial use so long as the water is California, the Semitropic Groundwater subsequently pumped and put to the Banking Program is a good example of beneficial use for which it was being this approach. The bank has partners stored.28 The default timeframe for from the agricultural, urban, and private pumping stored water is ten years, but sectors, each of which deposits some the development schedule on the storage of its water entitlement from the State permit may set a different deadline for Water Project when demand for that withdrawal. Under any timeframe, this water is low. Semitropic either uses this authority adds options to a water user’s surface water to recharge the aquifer or long-term supply strategy, especially directly for irrigation instead of pumping when experiencing significant fluctua- groundwater. Upon request, the bank tions in supplies. delivers the partner’s stored water either by pumping it from the aquifer or Despite a long history in California, it by providing the equivalent amount from is difficult to determine exactly how Semitropic’s State Water Project entitle- frequently aquifer storage and recovery ment. (Clifford et al. 2004, at 51) has been used. The database run by the State Water Resources Control Board Utah allows a permit to be listed for surface or ground storage, but not both. Thus, the In 2008, the Utah Legislature amended few permits for underground storage on the language of the water storage ex- record may not be representative of the emption to Utah’s forfeiture statute to true number of projects. Additionally, the include aquifer storage, not just surface law in California is unclear as to whether reservoirs.29 This change was promoted a change petition is required for aquifer by a single district that is storing water storage when the water being stored is in an aquifer because it does not yet have an existing water right – the point of a demand for water equal to its supply. diversion and ultimate purpose and place As a result of the amendment, the use of use likely are the same, the use is just delayed. Hence, permits may never have 29 Ut a h Co d e Ann . § 73-1-4(2)(a) (“When an been sought for these projects and accu- appropriator or the appropriator’s successor in interest abandons or ceases to use all or a rate numbers cannot be tallied. portion of a water right for a period of seven years, the water right or the unused portion of 28 Ca l . Wa t e r Co d e § 1242 (“The storing of that water right is subject to forfeiture … (e) water underground, including the diversion This section does not apply to … (v) a water of streams and the flowing of water on lands right to store water in a surface reservoir or an necessary to the accomplishment of such aquifer … if: (A) the water is stored for pres- storage, constitutes a beneficial use of water if ent or future use; or (B) storage is limited by a the water so stored is thereafter applied to the safety, regulatory, or engineering restraint that beneficial purposes for which the appropria- the appropriator or the appropriator’s succes- tion for storage was made.”). sor in interest cannot reasonably correct.”).

22 Western Water in the 21st Century

of a water right for aquifer storage and supplies. Defining source substitutions as later use is not at risk of forfeiture even a beneficial use or exempting them from though aquifer storage is not considered forfeiture removes the threat of losing a beneficial use in Utah. the right to the old water source and makes these opportunities more viable. Since this amendment is so recent, its practical impact is yet unknown. But, Arizona it has the potential to reduce disincentives to short- and long-term storage and recovery projects, including storing Arizona is unique in its management of water in winter months to be used in the its different sources of water. The state summer and storage in wet years to be has four categories of water supplies, used in dry years. This could get more each managed differently: Colorado River use out of limited water supplies and water, surface water other than Colorado facilitate cooperative agreements among River water, groundwater, and effluent. users. Currently, there are no regulatory Colorado River water is allocated based limitations on the duration of storage to on the law of the river, other surface qualify under this exemption. The state’s water rights are allocated by prior ap- recharge and recovery program does ac- propriation, and rights to groundwater count for hydrologic losses, reducing the differ by location. Arizona has no regula- accessible water by five to ten percent tory scheme for effluent, but because of a per year. decision by the Arizona Supreme Court, Arizona Public Service Co. v. Long, 773 P.2d 988 (Ariz. 1989), those who treat Source Substitution wastewater are entitled to put it to any reasonable use. Water can come from a variety of sources, some natural and some arti- In 1992, the Arizona Legislature enacted ficial, some hydrologically linked and comprehensive legislation on water some not. Long-term sustainability of substitutions and exchanges. That bill water supplies requires thinking about added Subsection E to Section 45-141 of these sources together. Management of the Arizona Revised Statutes, exempting ever-changing demands and variations in surface water rights involved in substitu- supplies is aided by flexibility in source tions or exchanges from forfeiture or 30 usage. In some cases, using a different abandonment. As a result, exchanging source in lieu of an established one can 30 Ari z . Re v . St a t . § 45-141(E) (“The following water exchange arrangements or substitu- help protect the quantity and quality tions do not constitute an abandonment or of that old supply. For example, using forfeiture of all or any portion of a right to use groundwater in lieu of surface water in surface water: 1. Exchanging surface water for dry years can preserve streamflow, and groundwater, effluent, Colorado river water, including water delivered through the central using surface water instead of ground- Arizona project, or another source of surface water in wet years can preserve aquifer water pursuant to chapter 4 of this title. 2. Substituting groundwater, effluent, Colorado

23 rights.31 This statute allows water right holders to use wastewater instead of the original water, yet the original water is considered to be used. In essence, the right holder lets water flow past the normal point of diversion, but does not return water to the stream where the wastewater normally is deposited. Theo- retically, more water is in the stream than normal from the point of diversion to the point of deposit, but otherwise there is no impact on water quantity. Perhaps more importantly, the quality water or using an alternative source of water after the point of deposit should in lieu of the original source of water be better than before this exchange explicitly would not risk loss of the water since the wastewater is no longer being right, regardless of whether the original directly added to the river. right is beneficially used. In 1995, after the completion of a significant portion of So far, this statute has had little effect in the Central Arizona Project, Subsection E California. Its purpose is to promote the in turn was amended to include Colorado use of recycled water, desalinated water, River water in the justified sources for and wastewater instead of surface water. substitution and exchange. But in practice, these alternative sources often are used to supplement surface As Arizona increases flexibility in sup- supplies, not to replace them. In fact, ply and eases the burden on certain water reuse and desalination have been sources of water, often groundwater, instrumental in expanding the water by meeting demand with other sources, supplies of coastal cities in California, source substitutions and exchanges have and the interest in both technologies become critical to holistic water manage- continues to grow. However, they are ment and the long-term sustainability of expensive processes, often much more Arizona’s water resources. 31 Ca l . Wa t e r Co d e § 1010(a)(1) (“The cessation of, or reduction in, the use of water under California any existing right regardless of the basis of right, as the result of the use of recycled water, desalinated water, or water polluted by waste California explicitly classifies the use of to a degree which unreasonably affects the recycled water, desalinated water, and water for other beneficial uses, is deemed equivalent to, and for purposes of maintain- wastewater as beneficial, to the extent ing any right shall be construed to constitute, that it is used in lieu of other water a reasonable beneficial use of water to the extent and in the amount that the recycled, river water, including water delivered through desalinated, or polluted water is being used the central Arizona project, or another source not exceeding, however, the amount of such of surface water for surface water.”). reduction.”).

24 Western Water in the 21st Century

costly than diverting water. Water users Use of reclaimed water and reused water have been willing to pay a premium for as justifications for nonuse were enacted the added supply, but they are unlikely in 1991 and 1997, respectively. Each to pay it for improved water quality for was a part of a larger bill promoting downstream users. Therefore, correcting the development and expansion of the the legal disincentives against replacing practice. Forfeiture presents a hurdle to surface water supplies with recycled wa- replacing an existing water right with ter, desalinated water, or wastewater has a new source. The new source likely is meant very little as long as the economic less consistent or stable than an existing disincentives to replacing the original right, especially a senior one. In many supply, as opposed to supplementing it, cases, the risk of losing the existing right are so high. outweighs the benefits of the new source. By removing the forfeiture concern, that Oregon risk no longer factors into the equation. As noted above, reclaiming water in- Oregon’s forfeiture statute identifies sev- volves an expensive treatment process. eral acceptable justifications for nonuse In most cases, it is cheaper to continue of a water right. Two of these concern using the existing surface water supplies water source substitution: the use of than replacing it with treated wastewa- reclaimed water and the reuse of water 32 ter. However, this statute may gain more instead of water from an existing right. traction if wastewater treatment is the Reclaimed water is defined in Oregon law least expensive way of correcting a water as water used for municipal purposes quality impairment. While water reuse is and subsequently made suitable for a not necessarily expensive, the quality of beneficial use through treatment. By water likely is lower than existing sup- contrast, water reuse does not demand plies, and hence a disincentive to replac- treatment, originates from industrial ing existing supplies except in certain or confined animal feeding uses, and is circumstances. applied to land for irrigation purposes. Washington

32 Or. Re v . St a t . § 540.610(2) (“Upon a showing In 2001, the Washington Legislature of failure to use beneficially for five succes- sive years, the appropriator has the burden passed a bill that amended several stat- of rebutting the presumption of forfeiture by utes to promote the reuse of agricultural showing … (h) The nonuse occurred during industrial process water from food pro- a period of time within which the water right cessing. The Legislature explicitly noted holder was using reclaimed water in lieu of using water under an existing water right. (i) that this industry can play a significant The nonuse occurred during a period of time role in promoting water use efficiency. within which the water right holder was reusing To assist the development of these reuse water through land application as authorized by ORS 537.141 (1)(i) or 537.545 (1)(g) in lieu of efforts, the Legislature removed several using water under an existing water right.”). potential water right and permitting

25 hurdles. Among them was relinquish- Idaho ment. The 2001 bill added a new subsection to the state’s relinquishment In 2002, the Idaho Legislature made statute, exempting a water right use that several additions to its list of exceptions is satisfied by reused agricultural indus- and defenses to forfeiture, among them 33 trial process water. depositing a right in the water supply bank.34 This statutory provision codified Despite this statute and a simplified the existing understanding that a water permit process for applying agricultural right deposited in the bank, regardless industrial process water (through the of whether it actually is rented or not, state waste discharge permit), such qualifies for the forfeiture exemption. water is not often used in lieu of existing water rights. The wastewater must be The success of Idaho’s statewide water treated to a level that is suitable for its bank has been widely attributed to this intended use, usually agriculture. Again, forfeiture exemption for deposited water the cost of treatment, as well as the risk rights. The bank often is used by right of contamination, may surpass the cost holders to protect from forfeiture the and risk associated with existing water portion of their rights that are in excess supplies, discouraging the switch. of what they need. There are some time limitations, but water stays in the bank Water Banks if it is not rented. Thus, the forfeiture exemption simultaneously reduces a barrier to using the bank, establishes an Water banks have the potential to incentive for participating, and promotes expedite water transfers, temporarily saving water for dry periods and trans- or permanently filling needs as they ferring it to the uses for which it is most arise. Use of a water right by another user commonly is viewed the same for needed. purposes of forfeiture as use by the right holder. But if the water right is deposited Colorado with a bank and goes unused, it would not be protected. Therefore, exempting As noted above, Colorado does not have a from forfeiture water rights that are forfeiture statute, but a rebuttable pre- deposited in the water bank facilitates, sumption of abandonment is established and can even encourage, participation in if water is unused for ten consecutive the bank. years. The state statutorily exempts specific circumstances from the rules

34 Id a h o Co d e § 42-223(5) (“A water right 33 Wa s h . Re v . Co d e § 90.14.140(2) (“…there shall not be lost or forfeited by a failure of the shall be no relinquishment of any water right owner of the right to divert and apply the … (g) If such a right or portion of the right is water to beneficial use while the water right is authorized for a purpose that is satisfied by the placed in the water supply bank or is retained use of agricultural industrial process water…”). in or rented from the water supply bank…”).

26 Western Water in the 21st Century

of abandonment. In 2005, the Colorado rights, and the ease of using the bank as General Assembly added several items a “bulletin board”—entering agreements to this list, including participation in a outside of it. (Simpson 2005) water bank program.35 The threat of abandonment did not appear to affect participation in the bank, and the bank did not fair any better after passage of the 2005 abandonment exemption than it did before the exemption. There has been little expressed interest in water banking in other regions of the state, and since the end of the Arkansas Water Bank Pilot Program, there are no long-term water banking programs created in Colorado. Thus, the abandonment exemption for participation in a water bank appears to have had no influence on right holders or state programs. With other means of large-scale, shorter-term water transfers, like the “Super Ditch,” Despite Colorado’s long and active his- in place or under development, water tory of water marketing, the state has banks and their associated statutes may had a relatively short and tumultuous continue to be of limited significance in history with water banking. The first Colorado. real attempt at a regulated water bank in Colorado, the Arkansas Water Bank Pilot Texas Program, was approved by the Colorado General Assembly in 2001 and became As explained above, Texas allows nonuse operational in 2003. It had little, if any, without cancellation under certain cir- success. The failure of the bank has cumstances. As part of a large 1997 bill been attributed to a number of factors, designed to improve water management including the duration of the transaction decisions, the state legislature drasti- review period, restrictions on multi-year cally revised the list of conditions that contracts and out-of-basin transfers, must be considered when determining prohibition against banking direct flow whether nonuse is justified. Among the 35 Co l o . Re v . St a t . § 37-92-103(2) (“…Any pe- resulting conditions is the deposit of a riod of nonuse of any portion of a water right water right into the state water bank.36 shall be tolled, and no intent to discontinue permanent use shall be found for purposes 36 Te x . Wa t e r Co d e Ann . § 11.177(b) (“In deter- of determining an abandonment of a water mining what constitutes reasonable diligence right for the duration that … (b) The nonuse or a justified nonuse as used in Subsection (a) of a water right is a result of participation in … (2), the commission shall give consideration (IV) A water banking program as provided by to … (4) whether the permit, certified filing, or law.”). certificate of adjudication has been deposited

27 The Texas Legislature created the Texas the right.37 As is true in other Western Water Bank in 1993. But prior to the states, forfeiture in Utah is not an all-or- 1997 amendments, no water rights had nothing issue. Partial forfeiture is the been marketed through the bank. Along loss of the portion of a water right that is with other changes to improve the bank’s unused for the statutory period, which in marketing capabilities, the legislature Utah is 7 years. In other words, if a right provided protection from cancellation for holder uses 60 percent of the right for 7 those water rights deposited in the bank. years, he is subject to losing the other 40 Still, these changes have not had a no- percent. The addition of the substantial ticeable impact. This result is due in large use exemption in 2002 modifies partial part to three main factors. First, the forfeiture in Utah by protecting the Texas Water Bank primarily operates as entire right if “substantially all” of the an information clearinghouse, including right has been beneficially used within a list of sellers and buyers, which makes the 7 years in question. transactions outside the bank easier, and makes data on the true influence of the “Substantially all” is not defined in the bank incomplete. Second, cancellation is statute. The legislature could not resolve not well enforced in Texas, and without what percentage of usage should qualify enforcement, protection from cancel- under this exemption, so it left that lation does not offer much incentive. determination to the state engineer with Third, the protection is not absolute. The only the vague guidance of “substantially statute only requires that depositing the all.” The state engineer has not yet deter- water right in the bank be considered, mined an exact standard, but according not that it is determinative. to his office, it will be fairly high—some- where in the range of 80 to 95 percent.

Substantial Use This forfeiture exemption has not yet been applied in practice. But it has the Forfeiture often applies to any portion of potential to relieve concerns of strict a water right that is unused. In practice, forfeiture enforcement, where it exists, it is difficult to enforce this strictly. The and allow small reductions in usage from exemption from forfeiture of water rights conservation and general variability in that are “substantially used” can be a use. The exemption puts breathing room practical adaptation to the law, expressly into a law that theoretically is very tight. allowing a little more flexibility. 37 Ut a h Co d e Ann . § 73-1-4(2)(a) (“When an appropriator or the appropriator’s successor Utah in interest abandons or ceases to use all or a portion of a water right for a period of seven years, the water right or the unused portion In 2002, the Utah Legislature added sev- of that water right is subject to forfeiture … eral exemptions to its forfeiture statute. (e) This section does not apply to … (vi) a water right if a water user has beneficially Among these was the substantial use of used substantially all of the water right within a into the Texas Water Bank…”). seven-year period…”).

28 Western Water in the 21st Century

Assisting Incentives for Sustainability from the Market

Reducing the disincentives to sustain- being consistently productive, and mu- able practices posed by forfeiture and nicipal and industrial users would have abandonment is only one step toward a to buy the same or less despite increas- prior appropriation system aligned to ing populations and production. meet the West’s water challenges. And it is a small step. Beyond legal rules, a Classifying water conservation as a use driving force in encouraging efficiency or exempting it from forfeiture removes and relocating uses is the market. The concern about forfeiture or abandon- water market can be seen as a friend or ment, but it does not necessarily allow foe, the means of securing senior rights for the influence of the market. For that, or a destroyer of long-established societ- the state must allow conserved water ies and livelihoods. to be transferred, or at least authorize a change in the purpose or place of use, Part of the reason for this disconnect is while retaining its appropriation date the rigidity of the traditional rules sur- (seniority). The right holder is then able rounding prior appropriation. The more to reap financial benefit from improved expensive and time-intensive the water efficiency, either by leasing or selling right transfers, the greater the incen- the conserved water or using it for other tive to “buy and dry” agricultural lands. productive purposes. Conversely, quick yet thorough transfer reviews, responsive transfer agreements, However, the traditional rules surround- sufficient third-party protections, and ing prior appropriation require detailed the authority to transfer or otherwise review of any significant modification use conserved water create potential in- to a water right. This affects the speed centives for efficiency and effective water with which a transfer or other change use under any hydrologic condition. in a water right may occur, and hence reduces the responsiveness of a water A market that timely responds to de- market. But this review does serve mand shifts could allow water to be used an important purpose under prior ap- for agriculture except when most needed propriation. In most Western states, the for other uses, giving society the crops amount of water that one has a right to and products it demands when feasible divert (paper right) is not necessarily and supporting the farmers when not. the amount that the right holder may A responsive market also can create a consume (consumptive use right). Paper real price for water, giving all users more rights for agricultural irrigation based incentive to be efficient. Farmers would on field-flooding practices can be triple have more water to lease or sell while the amount of water actually consumed.

29 Water can be “lost” to evaporation, via in order to assure that they will not surface runoff, and by percolating into impair other water rights. Without groundwater, in transport or application. such protections, upstream users could Water that returns to the stream or river disrupt the delicate balance of use and through surface runoff and groundwa- return flows, affecting the availability ter commonly is used by right holders of water for downstream right holders. downstream. Therefore, the operation of The science required for determining the series of rights in a given basin often consumptive use and whether a change relies heavily upon these return flows to will affect other right holders can be remain viable. time-intensive and expensive. There also may be a long line of other applicants, Changing the purpose of use, e.g., from delaying the process further. agriculture to industrial, and the place of use, e.g., from abutting a river to three This chapter explores examples of how miles from it, can affect the quantity and states have modified their laws to bal- location of these return flows. Chang- ance these protections with flexibility ing the point of diversion, e.g., from and expediency in ways that allow a upstream to downstream, affects where more responsive water market and the water is demanded and how much is ultimately greater incentive for water “lost” in transport. Thus, these amend- use efficiency. ments to a water right must be approved

30 Western Water in the 21st Century

receiving money through transfer of the Allow the Use or Sale of Water conserved water, by using the conserved Conserved water to meet settlement obligations, or by applying the conserved water to Determining whether water conserva- a new purpose or location, among other tion measures are actually reducing con- options. sumptive use and evaporative losses, as The potential impact of this language is opposed to simply reducing return flows magnified by the fact that in California to the river, is difficult. This practical the amount of water conserved is based obstacle makes granting the authority to upon the reduction of withdrawal at the use conserved water for another purpose point of diversion. Under this practice, or in another place a risky proposition – consumption and conservation are not it may enlarge the right. But allowing a necessarily connected. A permittee or right holder to otherwise use or transfer licensee can “conserve” water by limiting conserved water provides an added transportation and application losses incentive for conservation and makes a that otherwise would return to the greater number of projects economically stream or aquifer. This liberal application viable. of the term makes credits for conservation much easier to get than in other California states. But greater total consumption, and consequently less water recharging Closely linked with Subsection (a) of the aquifer and returning to the stream, California Water Code Section 1011, threatens the quantity of groundwater which makes water conservation a ben- supplies and increases the potential for eficial use (explained in detail in Chapter impairment of other water users. II), subsection (b) allows conserved water to be transferred and its purpose Despite a very favorable environment of use, place of use, and point of diversion for conservation, this statute has not changed just like any other water right.38 been widely used. There have been only This affords the permittee or licensee of a a few cases, the most notable of which is water right in California the opportunity the transfer of approximately 500,000 to benefit from efficiency measures by acre-feet of conserved water from the Imperial Irrigation District to the San 38 Ca l . Wa t e r Co d e § 1011(b) (“Water, or the Diego County Water Authority. Individu- right to the use of water, the use of which has als involved in this area attribute the ceased or been reduced as the result of water conservation efforts as described in subdivi- untapped conservation potential not to sion (a), may be sold, leased, exchanged, or the laws of the state, but to failure to otherwise transferred pursuant to any provision advertise the opportunities available, as of law relating to the transfer of water or water well as water users’ limited view of the rights, including, but not limited to, provisions of law governing any change in point of diver- need for water use efficiency. sion, place of use, and purpose of use due to the transfer.”).

31 But as drought in California looms even transportation and use techniques and larger, the available supply of water technologies, it may also reduce the will decrease and the price of water will severity of hydrologic drawdown and increase, particularly due to municipal chance of future impairment claims. demand. Those with water will have a significant financial incentive to transfer Additionally, Oregon Revised Statute all or some of it, and this statute could Section 537.470(3) requires that, of the provide a valuable means of retaining quantity of water remaining after the current use while receiving additional mitigation reduction, at least 25 percent funds from conserved water transfers. be allocated to the state for instream flow use. If the conservation was achieved Oregon with government funding, this percentage increases relative to the level of that funding, but no more than 75 percent. Oregon’s Conserved Water Program is Theoretically, such a structure gives designed to provide economic incentives incentive to the state to promote water for improving water use efficiency and efficiency measures, whether financially thereby increasing water availability. or otherwise, so as to improve instream The authority to transfer or otherwise flows. But the 25 percent minimum use the conserved water is an important dedication to the state, even when there part of that incentive structure, allowing is no government funding for the project, the water right holder to gain additional 39 further reduces the potential benefit to income from water saved. As in Califor- the water right holder. nia, conservation measures in Oregon do not necessarily have to reduce consump- The program’s market-based incentives tive use; they can include projects like have not been used often, nor have they canal lining. spread much water to new uses. The program began in 1987, but the state But unlike California, Oregon law received only two conserved water ap- mandates that credit for the quantity plications before 1996. (Aylward 2008, of water conserved be reduced by the at 7) Since then the number of applica- amount necessary to mitigate the effects tions has grown slowly but steadily, with of the efficiency measures on other water most of the activity in the Deschutes and users. In practice, this mitigation amount Umatilla basins. The Walla Walla sub- can consume a significant portion of the basin of the Umatilla has had a number of water deemed to be conserved. While conserved water applications for on-farm this reduces the benefit to the water efficiency projects, primarily because right holder of adopting more efficient mitigation is not an issue. The Walla Walla flows into Washington, and there is 39 Or. Re v . St a t . § 537.490(1) (“Any person or no responsibility for losses to water right agency allocated conserved water under ORS 537.470 may reserve the water in stream holders across the border. Instead of this for future out-of-stream use or otherwise use or geographic advantage, the Deschutes dispose of the conserved water.”).

32 Western Water in the 21st Century

basin has a geologic one. The volcanic as the laws of California and Oregon, but rock base in the area causes significant Washington offers similar market-based seepage losses, creating the opportunity incentives. Washington law authorizes for large piping projects to conserve the use of water in a new place and for substantial amounts of water. a new purpose if it does not increase the annual consumptive quantity of the In practice, Conserved Water Program right.40 This is not an efficiency-oriented projects often must be large to be eco- statute on its face, but the flexibility in nomical. The costs of developing the usage that it allows as well as its con- project, coordinating participants, and straints on consumption lend itself to going through the application process this end. are considerable, so the amount of water available for use at the end of the pro- The statute defines the annual consump- cess must be enough to have made that tive quantity as the average of the expense a logical investment. (Aylward two years of most use within the last 2008, at 33) Additionally, the application five-year period of continuous use. Use process is time-intensive, which means a is determined by the amount of water significant delay in seeing a return on the diverted in that year, minus the esti- initial investment. Part of the success of mated return flows. Thus, the amount of the Deschutes River Conservancy in us- water available for other uses or places ing this program is attributed to the fact is linked to the reduction in consumption that a pre-existing USGS study sped up at the original location for the original the process for determining the amount purpose. Under this structure, if water of water needed for mitigation. The right holders apply efficiency techniques Oregon Water Resources Department has and technologies that actually reduce sought to address this general problem water consumption, they may be able to by dedicating a staff member exclusively maintain the productivity of their cur- to the program and striving for a five- rent usage while making water available month timeframe for review. for other purposes or places, or even for lease. For the most part, projects in other basins have not had the same success with In practice, this statute has been one of the Conserved Water Program because the more successful tools for encourag- they do not have one of the aforemen- ing water use efficiency in Washington. tioned characteristics. But the program It has influenced usage decisions and is still developing and the fundamental opened discussion about innovations in structure still has promise. 40 Wa s h . Re v . Co d e § 90.03.380(1) (“…A change in the place of use, point of diversion, and/or purpose of use of a water right to Washington enable irrigation of additional acreage or the addition of new uses may be permitted if such Washington law is not as explicit about change results in no increase in the annual consumptive quantity of water used under the using and transferring conserved water water right…”).

33 conservation. While pleased with these “salvage” as “mak[ing] water available outcomes, many of the state’s water- for beneficial use from an existing valid focused non-profit organizations are appropriation through application of concerned about the statute’s potential water-saving methods.” (Mo n t . Co d e An n . for increasing agricultural acreage. For § 85-2-102(20)) The state defines “wa- this reason and others, there is a push ter saving method” as “a change to the for the state to promote certain uses of actual water use system or management this conserved water over others. of water use in which the modification being made would decrease the amount While there is no hierarchy of uses for of water needed to accomplish the same conserved water in the state, Washington result. Water saving methods might in- Revised Code Section 90.42.030 requires clude: (a) changing from a ditch convey- that public benefits, often in the form ance to a pipeline; (b) lining an earthen of water for instream flows, be given to ditch with concrete or plastic; and (c) the state if it or the federal government changing management of a water system financially supports the water conser- to decrease water consumption.” (Mo n t . vation project. As in Oregon, the state Ad m i n . R. 36.12.101(77)) Therefore, the water trust receives a portion of the Montana salvage statute opens the op- conserved water equal to the proportion portunity for market-based incentives of the project cost funded by the govern- for conservation by allowing the new use ment. Unlike Oregon law, Washington or sale of water saved through conserva- has no minimum or maximum donation tion measures. requirements to the state water trust. Thus, if the project receives no govern- In effect, the Montana salvage statute ment funding, it is under no obligation was a codification of existing practice. to donate any of the conserved water. The Montana Department of Natural On the other hand, the project could be Resources and Conservation (DNRC) required to contribute more than 75 per- had been allowing such activity prior cent of the conserved water to the trust if to the bill’s enactment. According to more than that percentage of the project several state officials, neither before nor cost is covered by government funds. after 1991 did this opportunity result in a significant change in the number or Montana extent of conservation projects in the state. The Montana Department of Fish,

In 1991, the Montana Legislature passed may retain the right to the salvaged water for a bill that allowed salvaged water to be beneficial use. Except for a short-term lease put to a different use, applied to a new pursuant to 85-2-410, any use of the right to salvaged water for any purpose or in any location, leased, or even sold, so long as place other than that associated with the the right holder met the requirements original appropriation right must be approved for state approval.41 The state defines by the department as a change in appropriation right ... Sale of the right to salvaged water 41 Mo n t . Co d e Ann . § 85-2-419 (“…holders … and the lease of the right to salvaged water of appropriation rights who salvage water must be [approved].”).

34 Western Water in the 21st Century

Wildlife, and Parks has used the salvage above, New Mexico does not explicitly water statute to make water available for recognize conserved water as a beneficial instream flow while maintaining agricul- use in its statutes. In fact, this 2007 bill tural production. Trout Unlimited also originally included language declaring has used this statute a number of times. conserved water to be a beneficial use, but it was stricken prior to passage. As in other states with statutes that al- Despite this circumstance, the water low the transfer or new use of conserved allowance statute preserves an owner’s water but do not tightly link conserva- irrigation water rights and appurtenant tion to reductions in consumption, there acreage even if water usage drops due is a general concern in Montana over to conservation. It also establishes a the statute’s potential for increasing means of putting that conserved water to impairment of other users’ water rights. another use in another location. If the right holder receives approval to use more water than actually was saved Under the 2007 amendment, the water by reducing consumption, the state is right owner bears the burden of dem- effectively sanctioning expansion of the onstrating conservation to the state consumptive use right. If water users engineer. The statute states that conser- upstream are actually consuming more vation can result from improved irriga- than they traditionally have, there will tion or changes in agricultural practices. be less water available for downstream While this does not appear to include users and a greater chance of water canal lining and other projects noted in right impairment. Montana already has other states’ definition of conservation, started to see some of these problems it still is a generous view of conservation due to piping and certain irrigation and is not necessarily connected to an techniques. According to state officials, actual reduction in evaporative or seep- Montana DNRC has begun to take a con- age losses or consumptive use. servative view of what can be considered consumptive use. Litigation on this issue The statute also states that conserva- is pending. tion may not impair or diminish other water rights. The 2007 bill as originally New Mexico introduced included the more stringent requirement that there be no increase

In 2007, the New Mexico Legislature irrigation or changes in agricultural practices amended its water allowance statute to have resulted in the conservation of water shall provide flexibility in usage of conserved be able to make an application to the state water. The state engineer was given engineer for a change in the point of diversion or place or purpose of use of the quantity of authority to approve the change of use, conserved water, provided that: (1) conserva- place of use, or point of diversion for tion of water shall not result in impairment or conserved irrigation water.42 As noted diminishment of other water rights; and (2) priority and quality of right shall be assessed 42 N.M. St a t . Ann . § 72-5-18(C) (“Any water under the same standards as apply to trans- rights owner who demonstrates that improved fers.”).

35 in net depletions, but this provision was holders are unharmed by these changes removed before the bill was passed. Thus, is important but onerous. A long review the law technically allows reductions in process makes transfers expensive and stream flow as a result of conservation time-consuming. As a result, some trans- and subsequent change of purpose and fers are not feasible on account of the place of use, but only when other water small amount of water to be transferred rights are not affected (uneconomical given the costs) or the immediacy of the need (demand will In its official comments on the 2007 have passed by the time the transfer is bill, the Office of the State Engineer approved). expressed concern over the potential to further reduce instream flows. The Office Accelerating the review process can stated that agricultural conservation make more of these transfers possible. usually results in the same consumptive Water supply can be more responsive use or even an increase in consumption, to demand. Water rights can remain and when there are true water savings, with lower-value uses, such as agri- they are nearly impossible to quantify culture (commonly the most senior with certainty. The Office noted that the water rights), and then leased to other bill, in conjunction with an elimination of users in dry periods. This reduces the watermasters, likely would result in ad- incentive for one-time transfers (hence ditional water depletions and an expan- less pressure to “buy and dry”), may sion of the problems faced in the Pecos provide income beyond the opportunity River to most of the state’s compacted cost of fallow fields, and keeps farms in rivers. business.

This statute has the structure for in- But a too-quick review process at the centivizing conservation in agricultural expense of protecting other users and water use, particularly since it may third parties may simply lead to politi- result in leases to municipalities. But it cal roadblocks and more litigation after has not yet been a factor in increasing approval of the transfer, both of which municipal supplies. ultimately slow the process again. Thus, expedited review must be sufficiently Accelerate the Transfer Process thorough or rely on accurate estimates to truly accelerate the process. To allow transactions to occur even faster than Transferring a water right, whether any full-blown process would permit, in the short or long term, can greatly the state can conditionally pre-approve disrupt the delicate structure of use transfers or allow greater variance in the and return flows in the basin. Transfers terms of a water right, such as when and often entail a change in purpose of use, where the water is used. Faster transfer place of use, and point of diversion. procedures that also retain their basic The science and procedure commonly protections have the potential to meet required to ensure that other right

36 Western Water in the 21st Century

the many, varied demands for water as process while maintaining a relatively frequently as possible. high quality of analysis. The expedited review has in turn resulted in more Expedite Review Procedures petitions to the SWRCB for temporary changes, now about five per year. This increase in short-term changes has not Quick reviews make it economically and had an apparent effect on the number temporally viable to affect a greater of long-term leases, which suggests that number of transfers and other changes, expedited review is making more trans- particularly those for the short term. actions feasible rather than simply alter- ing transaction strategies. With a quick California review process for temporary changes, water users in California have been able In 1999, the California Legislature re- to be more responsive to changing cir- pealed Water Code Section 1726, govern- cumstances, a trait that will be increasing the petition requirements for a tem- ingly useful as water supplies become porary change in the point of diversion, more uncertain. place of use, or purpose of use. It was replaced by a statute that sets deadlines Colorado for the State Water Resources Control Board (SWRCB) for temporary water In 2002, Colorado enacted legisla- right changes, those that last for one tion that codified temporary review 43 year or less. The SWRCB must begin its procedures for augmentation plans, review of these petitions within 10 days rotational crop management contracts, of receiving them and decide within the and changes to water rights.44 In Colo- following 35 days whether the change rado, review of these plans, contracts, would harm another water user. In the

case of a protest or other good reason, 44 Co l o . Re v . St a t . § 37-92-308(4)(a) (“…if an the SWRCB may extend the review pe- application for approval of a plan for augmen- riod by at most 20 days. As compared to tation, rotational crop management contract, or change of water right has been filed with changes that took one year or more, this a water court and the court has not issued a is a quick turnaround. decree, the state engineer may approve the temporary operation of such plan, contract, In practice, these time constraints or change of water right as a substitute water have effectively accelerated the review supply plan … (5)(a) … for new water use plans involving out-of-priority diversions or a change of water right, if no application for 43 Ca l . Wa t e r Co d e § 1726 (“… (e) Within 10 approval of a plan for augmentation or a days of the date of receipt of a petition, the change of water right has been filed with a board shall commence an investigation of the water court and the water use plan or change proposed temporary change … (g)(1) … the proposed and the depletions associated with board shall render a decision on the petition such water use plan or change will be for a not later than 35 days after the date that limited duration not to exceed five years, the investigation commenced or the date that the state engineer may approve such plan or notice was published, whichever is later.”). change as a substitute water supply plan…”).

37 and changes are to be performed by a In practice, this legislation has improved state water court. But the statute also the efficiency of water transfers in grants authority to the state engineer to Colorado, but only as all parties have approve a plan, contract, or change for become accustomed to the process. Soon one year or less if it has been filed with after the bill’s passage, the city of Aurora a water court. The state engineer may used this method of temporary approval renew its approval each year until the for its Highline project, a 2-year pilot court issues a decree, so long as delay in water leasing-fallowing agreement with obtaining a decree is justified. In essence, 160 farmers. Even under this expedited this allows temporary operation of a plan process for short-term projects, it still following an administrative review while took 18 months before the substitute a more formal decision is being made by water supply plan was approved by the the court. state engineer. However, a number of factors contributed to this delay, includ- If an augmentation plan or change of ing the very large amount of water to be water right has not been filed with the transferred, the fact that it proposed an court, this statute authorizes the state inter-basin transfer, and the numerous engineer to approve the plan or change, other augmentation plans and substitute so long as the effects of the project will water supply plans submitted to the state not last beyond five years. The state engineer. Since that time, petition writ- engineer may renew the substitute water ers and the state engineer have become supply plan each year up to the fifth year. more comfortable with the process for In essence, this offers temporary opera- submitting and reviewing these petition of short-term augmentation plans or tions; applicants now are required to changes of water rights. file by December 31, and approvals are routinely granted by March 31, the start In either instance, the applicant still of the “water year” in Colorado. must provide notice to relevant parties, and the state engineer must allow thirty In the near future, this expedited process days for comments. The state engineer will serve as the mechanism for trans- must consider all comments but is not ferring water under the water leasing required to hold formal hearings or other program commonly known as the “Super proceedings. The state engineer may Ditch.” Modeled in large part after the impose terms and conditions on the sub- water transfer agreement between stitute water supply plan to ensure that the Palo Verde Irrigation District and the plan will replace all out-of-priority Metropolitan Water District of Southern depletions in time, location, and amount; California, the Super Ditch is designed to will prevent injury to other water rights; maximize the short- and long-term use and will not affect compliance with inter- and value of irrigation water and retain state compacts. water rights in the hands of farmers. When the “Super Ditch” begins operation, it will lease water, made available from

38 Western Water in the 21st Century

field fallowing by farmers in a number as a 50 percent return flow requirement. of ditch and reservoir companies in the If the 50 percent estimate is significantly Lower Arkansas River Valley, to mu- in error, the state engineer may deter- nicipalities and other water users. The mine the actual amount of historical amount of water supplied to customers return flow and limit the consumptive will largely depend on the demand in a use amount accordingly. But the 50 given year. Hence, the expedited review percent estimate serves as a convenient process is instrumental to the annual and sufficiently accurate baseline for flexibility of the supply and ultimately to most temporary use changes. maximizing the water’s use and value. Wyoming’s temporary water use statute Wyoming is more limited in scope than those seen in other states, in large part due to its historical purpose of providing flexibility Starting in 1959, the State of Wyoming between sectors for brief emergency has allowed an expedited water transfer uses. Thus, intra-sector transfers, e.g., review process for changes of use of two 45 between farmers, may not use this expe- years or less. Normally the change of dited process. The statute also explicitly use or place of use must be approved references the type of temporary uses by the State Board of Control under envisioned by the Wyoming Legislature, Wyoming Statutes Annotated Section including highway and railroad construc- 41-3-104, a process that requires careful tion and drilling operations. But the list consideration of historical consumptive is not exhaustive; the statute has been use and historical return flow, and may used to, among other things, supply require a public hearing at the petition- municipalities with water during periods er’s expense. Under the temporary water of drought. Attempts have been made to use statute, petitions are reviewed by the use this statute for temporary changes state engineer and the procedures are of use to instream flow, but that has been abbreviated. While the temporary change rejected as beyond the bounds of the of use still may not exceed historical use statute. There is significant opposition to amounts, this restriction is roughly esti- making the statute more inclusive, due in mated in the temporary change context part to a comfort level with existing uses

45 Wy o . St a t . Ann . § 41-3-110(a) (“Any person and a belief that the statute was meant shall have the right to acquire by purchase, for truly temporary uses. Bills for new, gift or lease the right to the use of water which more inclusive statutes on temporary may be embraced in any adjudicated or valid unadjudicated water right, or any portion change of use procedures have been and thereof, for a period of [sic] not to exceed two continue to be introduced. (2) years, for highway construction or repair, railroad roadbed construction or repair, drilling The temporary water use statute explic- and producing operations, or other temporary itly limits the duration of the changed purposes … (b) Before any right to such use shall become operative, an application … use to two years to qualify as temporary. shall be filed in the office of the state engineer However, renewals are permitted, and for his ratification and approval.”).

39 state bank, five local rental pools, and a bank created by the Shoshone-Bannock Tribe. The Idaho Water Resources Board (IWRB) sets policy and runs the Idaho State Water Supply Bank. The rental pools are a subset of the bank system run by local committees appointed by the IWRB. (Clifford et al. 2004, at 61-62)

For the State Bank, the IWRB serves as an intermediary between lessors and les- sees of water, obtaining rights to water, commonly natural flow rights as opposed there is no limit on renewals. A few of to storage rights, and subsequently leas- the changes have been renewed several ing them. As with any other water trans- times, but most actually last for two fer, rental of water from the State Bank years or less. One issue that has yet to must be approved by the Director of the be resolved is whether there is abandon- Idaho Department of Water Resources ment of a water right if the temporary and may not, among other things, impair transfer surpasses five years. Like the other water rights, enlarge the right at push to include more uses under the issue, or conflict with the public interest. statute, there also has been a demand for However, the administrative procedures a permit period longer than two years. for approval of a rental from the State But, this has met with resistance as well, Bank are less onerous than, and replace, mostly out of concern over losing the the procedures required for other water original purpose of the water right be- transfers.46 For example, the Director cause of it being used for something else need not seek the advice of the district for a long period. watermaster, provide notice of the The temporary water use statute has rental, or conduct hearings about the been instrumental in facilitating water rental. While the protections of other use transfers in Wyoming. Between 100 users remain mostly intact, the abbrevi- and 200 such applications are approved ated process allows for quick review and by the state engineer every year. ultimately faster transfers.

The rental pools share some common Idaho rules set by the IWRB but have developed their own unique operating procedures. Informal water banking has occurred in The Snake River Rental Pool, the most Idaho since the early 1930s, but formal active of the pools, has a late-season fill statutory provisions governing this process were not enacted until 1979. Idaho 46 Id a h o Co d e § 42-1764(1) (“The approval of a rental of water from the water supply bank has several types of banking programs: a may be a substitute for the transfer proceeding requirements…”).

40 Western Water in the 21st Century

program that attempts to reimburse par- and the U.S. Bureau of Reclamation to ticipants for water shortages caused by facilitate short-term water transfers and the previous year’s rentals rather than relieve the effects of the 2001 drought in attempting to prevent those shortages up the Yakima Basin. The WTWG served as front. This results in a standardized, ex- a means of expediting the review process pedited rental process. Each year 50,000 for water transfers – with a 15-day turn- acre-feet of late-season fill water is made around objective. available for rent. If the reservoirs do not fill the next year, participating reservoir Representatives of the Bureau of Recla- spaceholders will be paid in proportion mation and DOE, the two agencies with to the impact of those rentals on their decision-making authority on water current water storage supply. These rights transfers, hosted the WTWG, payments are made from the Impact which included hydrologists, water Fund and limited to the amount of money users, and water rights experts from in the Fund. Each year 70 percent of the across the Yakima Basin. Members of net proceeds from rentals is distributed the WTWG served voluntarily and did to participating spaceholders, and the not formally represent their respective remaining 30 percent is put into the organizations. Since those likely to sue or Impact Fund. If the Fund is not used in raise objections to transfers were a part a given year, it carries over to the next of the WTWG, concerns could be vetted in year, building a larger financial buffer for the group, and unanimous approval was participants. a positive indication that the transfer would not adversely affect streamflow For short-term leases or rentals, the or other users. The WTWG established Idaho water banking system has been a set of guidelines,47 and if the proposed very effective, in some cases with nearly transfer was found to be consistent with seamless day-to-day transfers. It has not those guidelines, the WTWG would label been as effective for longer-term leases the proposal as “recommended.” If the or permanent transfers. As noted in proposal did not receive this label, the Chapter II, the statutory exemption of WTWG often would help the applicant banked water from forfeiture contributes make the necessary adjustments to be to the success of this system as water “recommended.” right holders commonly use it to protect their rights from forfeiture. For temporary transfers or changes in water rights subject to the Yakima River

Washington 47 Wa t e r Tr a ns f e r Gui d e l in e s , Ya k im a Ri v e r Ba sin Co ns e r v a t i o n Ad v is o r y Gr o u p (“(A) Basic Criteria for “fast track” response to transfer request: The Yakima Basin Water Transfer Work- (1) Equivalent reductions in consumptive use, ing Group (WTWG) arose in 2001 as part (2) Water that would have been used if not for of the Yakima Emergency Water Bank. transfer, (3) Transfer must adhere to specific delivery schedule, (4) Must be no adverse The Bank was established by the Wash- change in instream flow, (5) Operational ington Department of Ecology (DOE) Impacts.”).

41 Adjudication, which most proposals other. Finally, the fact that reservoirs are were, the Yakima County Superior Court high in the basin helps with the flexibility holds the authority to approve or deny of water transfers. the proposal. The WTWG would notify the court of “recommended” proposals. Replicating this scenario elsewhere If a proposed transfer was not “recom- would be difficult, if not impossible. But mended,” the applicant was still free to the success of the WTWG suggests that a apply to the court for approval. (http:// similar program in a different environ- www.ecy.wa.gov/programs/WR/ywtwg/ ment may still have positive results for ywtwg_qanda.html) The judicial ap- optimizing the speed, while retaining proval rate of “recommended” proposals the thoroughness, of the transfer review was 100 percent. process.

The success of the WTWG in 2001 led Protect Third Parties to its permanent status. It continues to function just as it did then, but the high transfer volume in dry years like 2001 Third parties, those that are not on makes the system, particularly pricing, either end of the water transfer, could de- faster and easier than in wetter years. A lay the transfer process through formal 45-day turnaround period has been the comments and formal hearings, sub- goal in non-drought years. In 2005, the sequent lawsuits, or political pressure, next drought period, the WTWG operated if available. Therefore, minimizing the better, more cheaply, and faster than in direct and indirect effects of transfers 2001, in large part because it was com- and other water right changes on third posed primarily of the same people as in parties can be an important factor in ex- 2001. That year it reserved more water pediting the transfer process. Balancing for instream flows than in 2001 and was the time and money for this effort with done by May rather than July. the extent of third-party protections can optimize the average time needed for The continued success of the WTWG in transfer approval. expediting water transfers and changes of use is attributed to several key fac- Colorado tors. First, it is composed of dedicated experts, familiar with the area and In 1992, Colorado began requiring coming from the entire range of interests revegetation provisions in change of in the Yakima Basin. Second, the court use agreements that move water from is responsive, holding hearings every irrigation to other uses. In 2003, the week when there are water matters for legislature expanded this law to include it to decide. Third, the Yakima Basin is noxious weed management. As now fully adjudicated, which clarifies what is composed, the law requires that former being reviewed and provides a base for farmlands from which water is removed collaboration since the parties know each by a transfer agreement be managed so

42 Western Water in the 21st Century

as to accomplish both goals.48 The trans- in the law, transition mitigation pay- fer applicant may stop maintaining the ments are meant to offset reductions former farmland for revegetation only in property tax revenue resulting from after receiving a final determination by significant water development activities. the court stating that no further water is Bonded indebtedness payments serve needed for that purpose. a similar purpose for bond repayment revenue. Each type of payment shall be In practice, this law has not been particu- made on an annual basis according to a larly influential until recently. This result schedule determined the applicant and is partly due to the fact that revegetation taxing entities if they come to an agree- provisions were already fairly common ment, otherwise by the court. by 1992. Perhaps more important, the statute does not explain what is meant This statutory amendment was born by “reasonable provisions,” only that from practice. For example, an agree- they must be included. Recent court deci- ment between Rocky Ford area farmers sions are beginning to create a baseline and the City of Aurora in the late 1980s, of standards, which is helping the statute Rocky Ford I, included payments in gain value and improve preexisting lieu of taxes. But while the payments practice. had precedent, they were not entirely commonplace. By allowing the courts Addressing a different consequence of to actively impose the payments, the water transfers on third parties, in 2003 statute promotes their inclusion in water the Colorado General Assembly amended transfer agreements and provides added the standards by which water judges protection for the interests of county and referees make their rulings. This governments from which the water new statutory provision allows courts to originates. impose transition mitigation payments and bonded indebtedness payments on Wyoming significant water transfers.49 As defined

48 Co l o . Re v . St a t . § 37-92-305(4.5)(a) (“The terms and conditions applicable to changes For over thirty years, the State of Wyo- of use of water rights from agricultural irrigation ming has had a detailed statutory proce- purposes to other beneficial uses shall include dure for changing the use or place of use reasonable provisions designed to accomplish of a water right. Included in this statute the revegetation and noxious weed management of lands from which irrigation water is is a list of limitations on such a change: removed.”). it shall not injure other water users, 49 Co l o . Re v . St a t . § 37-92-305(4.5)(b)(I) (“…a increase consumptive use, decrease his- court may impose the following mitigation toric return flow, or exceed the historic payments upon any person who files an application for removal of water as part of a basis ... (B) Bonded indebtedness payment … significant water development activity: (A) shall be made on an annual basis … shall be Transition mitigation payment … shall equal equal to the reduction in bond repayment the amount of the reduction in property tax revenues that is attributable to the removal of revenues for property that is subject to taxation water as part of a significant water develop- ... Such payment shall be made on an annual ment activity.”).

43 amount and rate of diversion. In addition transport water from seller to buyer. to these factors, the Wyoming State The statute prohibits state, regional, or Board of Control, the decision-making local agencies from denying the transfer authority over change of use and place of of water through conveyance facilities use petitions, must consider third-party that have unused capacity, so long as fair impacts that it believes are pertinent.50 compensation is paid for that use. As a result, the number of potential buyers Of note are the economic implications and sellers with realistic access to one to the community from which the water another increased: pipes and canals that right would be transferred, as well as the do not belong to either party can be used impact to the state if the use to which to transport water. Currently this statute the water had been put is discontinued. has significant application to the Cali- Concern over these losses can be reduced fornia State Water Project, an extensive by the economic benefits of the new use system of reservoirs, aqueducts, and of the water. But if the water is trans- pumping plants for the purpose of stor- ferred out of the original community, the ing and distributing water to urban and new use will not offset the community’s agricultural users throughout the state. losses even if it completely offsets the state’s losses. The statute placed a few limitations on this activity, including limiting unreason- In practice, this statute and these con- able impacts on fish, wildlife, and the siderations have affected the board’s overall economy and environment of decisions on some petitions. More than the seller’s county.51 In other words, if anything, the added considerations have a water transfer will have one of these prompted the rule of thumb that the impacts, public agency facilities shall not more information that is provided in transport that water. Where an alterna- support of a petition, and hence in mini- tive means of conveying the water exists, mizing these losses, the more likely it is this statute may not have much effect that the petition will succeed. on whether the transfer occurs. But the expansive network of publicly owned California conveyance facilities in California means that they may be not only the best way, In 1986, California enacted legisla- but the only way to get water from seller tion designed to facilitate voluntary to buyer. This scenario increases the water transfers by making it easier to likelihood that the statute will operate

50 Wy o . St a t . Ann . § 41-3-104(a) (“…The board of control shall consider all facts it believes 51 Ca l . Wa t e r Co d e § 1810(d) (“This use of pertinent to the transfer which may include a water conveyance facility is to be made the following: (i) The economic loss to the without injuring any legal user of water and community and the state if the use from which without unreasonably affecting fish, wildlife, the right is transferred is discontinued; (ii) The or other instream beneficial uses and without extent to which such economic loss will be off- unreasonably affecting the overall economy set by the new use; (iii) Whether other sources or the environment of the county from which of water are available for the new use.”). the water is being transferred.”).

44 Western Water in the 21st Century

to limit those water transactions with State Water Resources Control Board significant third party impacts. (SWRCB) decides whether the transfer would “unreasonably affect” these eco- In practice, these limitations have had a logical resources. If it would, the petition tangible result. Among other examples, is denied or conditioned. As compared a number of water transfers from the to a “no significant impact” require- Colorado River have had to address third ment, the SWRCB has some flexibility party impacts. Further, the California in its decision-making; it may balance Department of Water Resources used the the effects of the water transfer on fish considerations from this statute when and wildlife against the benefits of the developing the Environmental Water transfer. (Division of Water Rights 1999, Account, which is intended to reduce the at 3-9) impact of supply transfers on flows for fish species. The statute also was used as In practice, this added inquiry has had the basis for the environmental aspects more of an impact on the types of peti- of the 2009 Water Bank. tions submitted than in the number of petitions denied. Logically, people are Distinct from these conveyance rules, less likely to petition for a change if they California has long required consider- know it will not pass this stage of review. ation of “fish, wildlife, and other instream This can result in not submitting a peti- beneficial uses” in the course of review- tion or in submitting a petition struc- ing petitions for change in use, place of tured to protect or improve conditions use, or point of diversion of a water right. for fish and wildlife. The Yuba Accord is This language appears in a number of an example of the latter. statutes in the state’s water code, applying to both temporary and long-term The Yuba Accord is a long-term water water transfers.52 In both instances, the transfer strategy that includes three interrelated agreements. The Water Pur- 52 See, e.g., Ca l . Wa t e r Co d e § 1727(b) (“The chase Agreement delivers up to 140,000 board shall approve a temporary change if it determines that a preponderance of acre-feet of water in dry years for the the evidence shows … (2) The proposed California Department of Water Resourc- temporary change would not unreasonably es and the U.S. Bureau of Reclamation. affect fish, wildlife, or other instream beneficial The Conjunctive Use Agreement increas- uses. (c) The petitioner shall have the burden of establishing that a proposed temporary es groundwater usage, under a manage- change would comply with paragraphs (1) ment plan, to replace the water sold and (2) of subdivision (b)…”); Ca l . Wa t e r Co d e under the Water Purchase Agreement. § 1736 (“The board, after providing notice and opportunity for a hearing, including, but not The Fisheries Agreement increases limited to, written notice to, and an opportu- instream flow requirements in the lower nity for review and recommendation by, the Yuba River, down the Feather River and Department of Fish and Game, may approve Sacramento River, and to the Bay-Delta. such a petition for a long-term transfer where the change would not result in substantial (Yuba County Water Agency 2005) This injury to any legal user of water and would not unreasonably affect fish, wildlife, or other instream beneficial uses.”).

45 last agreement made the water transfer to remain the same. The rotation is law- in the Yuba Accord more appealing from ful only if it does not impair other water a fish and wildlife perspective. users.

The legislature’s stated rationale for Make Time, Place, and Use this statute is to encourage efficiency in More Flexible irrigation. During periods of drought as well with certain crops, topography, and Authorizing the modification of water soil conditions, irrigation can be more rights to increase available options for effective using this application pattern purpose and place of use without sig- than a continuous diversion of a small nificant further review can drastically flow for each water right. But despite be- accelerate adaptation to changing cir- ing in the law for a long time, the place of cumstances. Demand can be met closer use of irrigation water is not commonly to the time that it arises than with other rotated in this manner in Nevada. There transfer procedures, meaning that fore- has been some renewed interest lately, casting is less critical and water can be but few real developments. put to its regular use until it is otherwise Also relevant to the issue of flexibility needed. in usage, in 2007 the Nevada Legisla- ture declared temporary changes in Nevada water rights from agricultural use to use for wildlife or flow purposes to be Under Nevada law, multiple irrigators lawful.54 The statute requires the ap- may combine their water rights and plicant to follow the normal procedures rotate the usage of this larger amount for temporary changes in place of use, between them.53 The same opportunity purpose of use, or place of diversion. is available to individual irrigators with Under Nevada Revised Statute Section multiple water rights. In essence, this 533.345, temporary changes have an statute allows for irrigation at a higher abbreviated approval process compared volume but less frequently than under to permanent changes. For temporary any of the individual water rights. Of changes, if the state engineer determines course, the total amount of water used is that the change is in the public interest

53 Ne v . Re v . St a t . § 533.075 (“To bring about a and will not impair other water rights, more economical use of the available water the application need not be published or supply, it shall be lawful for water users owning go through a protest period and hearing. lands to which water is appurtenant to rotate in the use of the supply to which they may In all other cases, temporary changes in be collectively entitled; or a single water user, water rights are limited to one year, with having lands to which water rights of a different priority attach, may in like manner rotate in 54 Ne v . Re v . St a t . § 533.0243 (“The Legislature use, when such rotation can be made without hereby finds and declares that it is the policy injury to lands enjoying an earlier priority, to of this State to allow the temporary conversion the end that each user may have an irrigation of agricultural water rights for wildlife purposes head of at least 2 cubic feet per second.”). or to improve the quality or flow of water.”).

46 Western Water in the 21st Century

the opportunity for renewal. However, use the water for the historical purpose Section 533.0243 extends the timeframe for part of the year and then lease the for temporary changes in water rights entire amount of the right to the state from agricultural use to use for wildlife for instream purposes for another part or flow to three years, with the opportu- of the year. Restricting split-year leases nity for three-year renewals. to all-or-nothing usage reduces the likelihood of impairing other water rights and In practice, this law is not a significant consequently simplifies the review pro- change. More than anything, it emphasiz- cess. In addition, the statute requires the es the value of, and authority to, transfer holders of these water rights to measure water use from agriculture to instream and report the water usage, which pro- flow. According to participants in the tects other water users and documents Senate Committee on Natural Resources the entitlement to be protected instream. hearing on this bill, it clarifies the appropriate procedures for these water Split-year leases can be a helpful water right changes and relieves concerns management tool, particularly in areas about retaining the rights to water after that demand higher instream flows at the conclusion of the change period. Part certain times of the year. For example, a of the reason why this statute is not a split-year lease that switches water use bigger shift in practice is the state engi- from irrigation to instream flow during neer’s interpretation of the pre-existing salmon spawning can significantly aid law, reading it to allow these water right salmon populations. Leases designed changes in roughly similar form. for this purpose often change use in mid- to late-summer. While this prevents Oregon irrigation during that part of the growing season, it allows irrigation during the rest of the year and also protects an In 2001, the Oregon Legislature autho- important ecological resource. rized the split of a water right between 55 its historical use and instream flow use. Split-year leases can be viewed as a Under the statute, the split may occur means of maximizing water use for the in time but not amount. The historical full year. Additionally, these leases give and instream uses shall not occur simul- farmers certainty in timing; they can taneously; rather the right holder may plan the change in use roughly around 55 Or. Re v . St a t . § 537.348(3) (“A lease of all their crop schedule. There is little added or a portion of an existing water right for use risk in losing a crop investment on ac- as an in-stream water right under subsection (2) of this section may allow the split use of count of a split-year lease, unlike many the water between the existing water right dry-year leases. and the in-stream right during the same water or calendar year provided: (a) The uses are Despite the statute, split-year leases still not concurrent; and (b) The holders of the are not common in Oregon. There have water rights measure and report to the Water Resources Department the use of the existing been fewer than ten such leases to date. water right and the in-stream water right.”).

47 By contrast, numerous split-year leases be approved by the Water Resources have been successfully negotiated by the Commission, in effect pre-approving the Washington Department of Ecology and transfer. As noted in Oregon Administra- Washington Water Trust, most notably tive Rule 690-019-0080, the purpose of in the Dungeness and Teanaway River this law is to allow the planning for and basins. Oregon’s lack of success with mitigation of severe drought. The speed these leases commonly is attributed to of transfers is vital to that objective. the water use measurement required by the statute. In Washington, the measur- Prior to 2001, only local governments ing and reporting requirements are the and public corporations could benefit same for a split-year lease as normal use, from this law and only for the purpose and therefore not an issue. of distributing water. The 2001 amendments significantly expanded the pur- Also in 2001, the Oregon Legislature pose of the law and people to whom it is amended its drought agreement law to available. It now can serve as a means of include all water right holders, not just supplying a safety net during a drought local governments and public corpora- for any existing water user. tions.56 The statute allows any of these parties to enter into options or agree- Despite this opportunity, the statute has ments with water right holders to use not been used much to date. Drought their water after a declaration of severe, options and agreements do present continuing drought by the governor. complexities in water management. For In essence, the holder of the option or example, there is uncertainty in the agreement then has a backup water sup- timing of the lease; the parties do not ply in the event that a drought depletes know if or when it will occur as the year otherwise reliable water sources. begins. This also can lead to inefficiencies as crop investments may be lost due to Perhaps more importantly, this backup an option being exercised mid-season. supply often is easy to access and can Furthermore, there can be funding quickly satisfy demand as it arises. issues: not knowing when and for how Once the governor declares a state of long the option will need to be exercised severe, continuing drought, the only creates great uncertainty in how much requirement, beyond the terms of the the agreement will cost in the end. agreement, is to notify the local watermaster of intent to transfer the water. This responsiveness is possible because the option or agreement itself must

56 Or. Re v . St a t . § 536.770(1) (“The Water Resources Commission or a local government, public corporation or water right holder may purchase an option or enter an agreement to use an existing permit or water right during the time in which a severe, continuing drought is declared to exist.”).

48 Western Water in the 21st Century

Conclusion

Recent years and most forecasts A second step is allowing the use of suggest that the West will face unprec- conserved water beyond what is permit- edented water management challenges ted in the water right. Removing concern in the coming decades. Water resource over losing a portion of the right for not demands are likely to continue to rise, using it only goes as far as allowing other while the availability of supply is likely to costs, such as labor and energy, to have a become even more uncertain. The prior larger influence on the amount of water appropriation system has withstood that is diverted and used. By allowing extreme hydrologic events and chang- a water right holder to use conserved ing pressures throughout its history, water for another purpose, in another and there is nothing to preclude state place, or to transfer it to another user water laws founded on this system from even temporarily, improved efficiency overcoming the next set of challenges. can increase earnings as well as reduce But instead of simply surviving difficult costs. This financial incentive can make times through deep-rooted entrenchment a greater number of efficiency projects in practice and law, prior appropriation viable and give sufficient reason for has the potential to prepare the West for right holders to alter the status quo. The what is to come and soften the impact of opportunity carries with it a threat of what could be significant crises. enlarging water rights, if the evaporative and seepage losses and/or consumptive A small but important first step is reuse are not actually reduced. But, even ducing the active disincentives against if review procedures do not catch these using less water and supporting future mistakes, litigation can rectify impair- supplies. By adding to the definition ments of other water rights. of “beneficial use” or exempting more activities from forfeiture and abandon- A third, and perhaps most important, ment, one cost of those actions – loss of step is accelerating the transfer process. the water right – is removed. The lack of Quick transfer review procedures reduce enforcement of forfeiture and abandon- costs and the time lag between identify- ment in some Western states is beginning ing a demand and filling it. Reducing to achieve this end, but actually amend- third-party impacts reduces opposition ing the law provides assurance to water to a transfer, whether exercised through right holders that they will not lose their political pressure, administrative review right. Changing the perception of what procedures, or litigation, and accelerates is allowed and not allowed in terms of the transfer process. Greater flexibility water usage is difficult, and this legal in allowing activity under a water right clarification has been helpful in practice. and approving contingency transfer agreements essentially offer pre-approval of water transfers, hence very rapid

49 transaction times when the demand To accomplish the lofty goal of doing arises. An accelerated transfer process more with less water, all water users particularly benefits short-term water must be encouraged as well as allowed to transfers, since high transfer costs make use water more efficiently. State water brief transactions financially infeasible laws founded on the prior appropriation and a long review may not conclude in system of water allocation can do this, time to meet the need. Responsive short- but they mostly fall short at the moment. term transfers can lead to timely adapta- If corrected, an easier path will be paved tions to changing supply and demand, for science and technology to play their which in turn results in good use of water parts in reducing our water dependence in both wet and dry years. and meeting the challenges that lie ahead.

50 Western Water in the 21st Century

Appendix A

Resource Materials He a t h e r Co o l e y e t a l ., Mo r e wi t h Le ss : Agricu l t ur a l Wa t e r Co ns e r v a t i o n a n d Bruc e Ay l w a r d , Re s t o ring Wa t e r Co n - Ef f ici e nc y in Ca l i f o rni a (2008). s e r v a t i o n Sa v ings t o Or e g o n Ri v e rs : A Re v i e w o f Or e g o n ’s Co ns e r v e d Wa t e r Division o f Wa t e r Rig h t s , St a t e Wa t e r Stat u t e (2008). Re s o urc e s Co n t r o l Bo a r d , A Gui d e t o Wa t e r Tr a ns f e rs (1999). Cr a ig Be l l , Le g a l a n d Ins t i t u t i o n a l Co n t e x t f o r Augm e n t ing Existing Su p p l i e s Kimberly A. Felix, Improving Efficiency in (2008). Water Use: An Overview of the Recom- mendations of the Governor’s Commission Bureau of Land Management, Western to Review California Water Rights Law, 36 States Water Laws, at http://www.blm. McGe o rg e La w Re v i e w 165 (2005). gov/nstc/WaterLaws/abstract1.html. Go v e rn o r ’s Dr o ug h t Ta s k Fo rc e , Ari z o n a Ga r y Br y n e r & El i z a b e t h Purc e l l , St a t e wi d e Wa t e r Co ns e r v a t i o n St r at e g y Gr o un d w a t e r La w So urc e b o o k o f t h e (2004), at http://www.adwr.state.az.us/ We s t e rn Uni t e d St a t e s (2003). dwr/Content/Find_by_Program/GDTF/ conclusion/Statewide_Water_Conserva- Ca l i f o rni a De p a r t m e n t o f Wa t e r Re s o urc - tion_StrategyFINAL100804.pdf. e s a n d Bur e a u o f Re c l a m a t i o n , Wa t e r Tr a ns f e rs in 2009 In v o l v ing t h e Ca l i f o rni a Charles W. Howe, Protecting Public Values De p a r t m e n t o f Wa t e r Re s o urc e s a n d Bu- in a Water Market Setting: Improving r e a u o f Re c l a m a t i o n , Mid-Pacific Re gi o n Water Markets to Increase Economic Ef- (2008), at http://www.watertransfers.water. ficiency and Equity, 3 University o f De n v e r ca.gov/docs/sacvalleyintro09.doc. Wa t e r La w Re v i e w 357 (2000).

Sa s h a Ch a rn e y , Co l o r a d o Wa t e r Co n - Mary A. King, Getting Our Feet Wet: An s e r v a t i o n Bo a r d , De c a d e s Do wn t h e Ro a d : Introduction to Water Trusts, 28 Ha r v a r d An An a l y sis o f Ins t r e a m Fl o w Pr o gr a ms in En v ir o nm e n t a l La w Re v i e w 495 (2004). Co l o r a d o a n d t h e We s t e rn Uni t e d St a t e s (2005). Krista Koehl, Partial Forfeiture of Water Rights: Oregon Compromises Traditional Pe gg y Cl i f f o r d e t a l ., Wa s h ing t o n De- Principles to Achieve Flexibility, 28 En v ir o n - p a r t m e n t o f Ec o l o g y , An a l y sis o f Wa t e r m e n t a l La w 1137 (1998). Ba n k s in t h e We s t e rn Uni t e d St a t e s (2004).

51 Mo n t a n a De p a r t m e n t o f Na t ur a l Re s o urc - Wa t e r Co ns e r v a t i o n Im p l e m e n t a t i o n Ta s k e s a n d Co ns e r v a t i o n e t . a l ., Wa t e r Rig h t s Fo rc e , Te x a s Wa t e r De v e l o p m e n t Bo a r d , in Mo n t a n a (2006). Re p o r t t o t h e 79t h Le gis l a t ur e (2004).

Janet C. Neuman, Beneficial Use, Waste, Gregory A. Thomas, The Future of Water and Forfeiture: The Inefficient Search for Law Reform in California a Quarter Cen- Efficiency in Western Water Use, 28 En v i - tury after the Governor’s Commission, 36 r o nm e n t a l La w 919 (1998). McGe o rg e La w Re v i e w 495 (2005).

Janet C. Neuman, The Good, The Bad, University o f De n v e r , Co l o r a d o ’s Wa t e r and The Ugly: The First Ten Years of the Fu t ur e : Ex e cu t i v e Summ a r y f o r t h e DU Oregon Water Trust, 83 Ne br a s k a La w Wa t e r Fu t ur e s Pa n e l (2007). Re v i e w 432 (2004). Wa t e r Tr a ns f e r Wo r k gr o u p , Wa t e r Peter D. Nichols & Douglas S. Kenney, Tr a ns f e r Issu e s in Ca l i f o rni a : Fin a l Re p o r t Watering Growth in Colorado: Swept t o t h e Ca l i f o rni a St a t e Wa t e r Re s o urc e s along by the Current or Choosing a Better Co n t r o l Bo a r d b y t h e Wa t e r Tr a ns f e r Line?, 6 University o f De n v e r Wa t e r La w Wo r k gr o u p (2002). Re v i e w 411 (2003). Jason S. Wells, Leasing Water Rights for In- Or e g o n Wa t e r Re s o urc e s De p a r t m e n t , stream Flow Protection: The Opportunities Wa t e r Rig h t s in Or e g o n (2008). and Impediments to Improved Public Inter- est Involvement in Colorado’s Instream Ha l D. Sim p s o n , Re p o r t t o t h e Go v e rn o r Flow Protection Regime, 7 University o f a n d Le gis l a t ur e o n t h e Ar k a ns a s Ri v e r De n v e r Wa t e r La w Re v i e w 309 (2004). Wa t e r Ba n k Pi l o t Pr o gr a m (2005). We s t e rn Go v e rn o rs ’ Ass o ci a t i o n , Wa t e r Dan Tarlock, The Future of Prior Ap- Ne e d s a n d St r a t e gi e s f o r a Sus t a in a b l e propriation in the New West, 41 Na t ur a l Fu t ur e (2006). Re s o urc e s Jo urn a l 769 (2001). Yub a Co un t y Wa t e r Ag e nc y , Th e Pr o - Tim o t h y Te l l e e n -La w t o n & Jo h n Rum p l e r , p o s e d Lo w e r Yub a Ri v e r Acc o r d : A Co l - Using Wa t e r Wis e l y : So u t h w e s t Da t a l a b o r a t i v e Se t t l e m e n t Initiative (2005) Sh o ws t h e Pr o mis e o f Ef f ici e nc y (2008).

52 Western Water in the 21st Century

Appendix B

Index of State Laws

Arizona

Ari z . Re v . St a t . § 45-141...... 23 Ari z . Re v . St a t . § 45-172...... 16

California

Ca l . Wa t e r Co d e § 1010...... 24 Ca l . Wa t e r Co d e § 1011...... 6, 31 Ca l . Wa t e r Co d e § 1242...... 22 Ca l . Wa t e r Co d e § 1243...... 14 Ca l . Wa t e r Co d e § 1707...... 14 Ca l . Wa t e r Co d e § 1726...... 37 Ca l . Wa t e r Co d e § 1727...... 45 Ca l . Wa t e r Co d e § 1736...... 45 Ca l . Wa t e r Co d e § 1810...... 44

Colorado

Co l o . Re v . St a t . § 37-92-103...... 11, 19, 27 Co l o . Re v . St a t . § 37-92-305...... 43 Co l o . Re v . St a t . § 37-92-308...... 37

Idaho

Id a h o Co d e § 42-223...... 9, 19, 26 Id a h o Co d e § 42-1764...... 40

Montana

Mo n t . Co d e Ann . § 85-2-102...... 13, 20, 21 Mo n t . Co d e Ann . § 85-2-419...... 34

53 Nevada

Ne v . Re v . St a t . § 533.0243...... 46 Ne v . Re v . St a t . § 533.030...... 12 Ne v . Re v . St a t . § 533.060...... 5 Ne v . Re v . St a t . § 533.075...... 46

New Mexico

N.M. St a t . Ann . § 72-5-18...... 8, 35

Oregon

Or. Re v . St a t . § 536.770...... 48 Or. Re v . St a t . § 537.348...... 18, 47 Or. Re v . St a t . § 537.490...... 32 Or. Re v . St a t . § 540.610...... 9, 25

Texas

Te x . Wa t e r Co d e Ann . § 11.002...... 7 Te x . Wa t e r Co d e Ann . § 11.0235...... 15 Te x . Wa t e r Co d e Ann . § 11.173...... 7 Te x . Wa t e r Co d e Ann . § 11.177...... 15, 27

Utah

Ut a h Co d e Ann . § 73-1-4...... 10, 22, 28 Ut a h Co d e Ann . § 73-3-30...... 16

Washington

Wa s h . Re v . Co d e § 90.03.380...... 33 Wa s h . Re v . Co d e § 90.14.140...... 18, 26 Wa s h . Re v . Co d e § 90.42.040...... 18

Wyoming

Wy o . St a t . Ann . § 41-3-104...... 44 Wy o . St a t . Ann . § 41-3-110...... 39

54 Western Water in the 21st Century

Appendix C State Data

Arizona

Beneficial Use (relevant to sustainability): Recreation, wildlife (incl. fish), nonrecoverable water storage (Ari z . Re v . St a t . § 45-151) Abandonment/Forfeiture: 5 years, all or any portion Forfeiture proceedings must follow the period of nonuse. (Ari z . Re v . St a t . § 45-188) Exempt from forfeiture: underground storage when later beneficially used; exchanges; and substituting surface water for groundwater, effluent, etc. A( ri z . Re v . St a t . § 45-141) Changes and Transfers: Water right may be severed from land/site of use and transferred for agriculture, municipal, stock watering, power and mining, and to the state for recreation and wildlife purposes without losing its existing priority. Applications for severance and transfer must be filed with and approved by the director. (Ariz. Rev. Stat. § 45-172) Water exchanges are allowed if they meet the statutory criteria. (Ari z . Re v . St a t . § 45-1002) Instream Flows: Any person may appropriate water for recreation and wildlife, including fish. (Ari z . Re v . St a t . § 45-151) [The Arizona Court of Appeals interpreted this provision to provide for in situ appropriation – McClellan v. Jantzen, 547 P.2d 494, 496 (1976)] A water right may be transferred to the state or a political subdivision for recreation and wildlife uses, including fish, without losing its priority. (Ari z . Re v . St a t . § 45-172) Water Banking: Interstate water banking agreements with Nevada and California are authorized by the state under certain circumstances. Arizona may store Colorado River water and use it in place of diversions in years when CA or NV state agencies request water. The unused entitlement for that year allows for recovery by CA or NV of that amount of water. (Ari z . Re v . St a t . § 45-2471)

55 The legislature also established the Arizona water banking authority to regulate and coordinate water storage and distribution activities in the state. (Ariz. Rev. Stat. § 45-2423)

California

Beneficial Use (relevant to sustainability): Use of recycled water, recreation, preservation, enhancement of fish and wildlife resources, underground storage if later applied for appropriated use, failure to use if part of conservation effort (Ca l . Wa t e r Co d e § 1010, 1011, 1243) Abandonment/Forfeiture: 5 years (3 for WCA right), all or any portion (Ca l . Wa t e r Co d e § 1241) Exempt from forfeiture: crop control contracts, soil conservation contracts, case of hardship, lease, sale, transfer (Ca l . Wa t e r Co d e § 1241.6, 1244) Changes and Transfers: A right holder may change the point of diversion, place of use, or purpose of use if approved by the State Water Board and would not injure another user nor unreasonably affect fish, wildlife, or other instream beneficial uses. (Ca l . Wa t e r Co d e § 1701) The same is true for urgently needed changes (Ca l . Wa t e r Co d e § 1435), temporary changes for a transfer or exchange (Ca l . Wa t e r Co d e § 1725), and long-term changes from transfers (Ca l . Wa t e r Co d e § 1735). Instream Flows: Any right holder may petition the board for a change of use for purposes of preserving or enhancing wetlands habitat, fish and wildlife resources, or recreation in or on the water. (Ca l . Wa t e r Co d e § 1707) Water Banking: Dry Year Water Purchasing Program (2001-2003): the DWR negotiated MOUs with potential buyers to estimate water demand, and then it entered into dry-year option contracts or direct purchase contracts with sellers to purchase water on behalf of MOU participants. Drought Water Bank (1991-1992): the goal was to create “new” surface water through the implementation of three types of contracts: 1) fallowing agricultural land contract, 2) contract for selling surface water and using groundwater, and 3) stored water contract for releasing water from reservoirs. Extreme critical needs were given priority for supplies.

56 Western Water in the 21st Century

Semitropic Groundwater Banking Program: in high flow years, Semitropic uses surface flows for groundwater recharge or in lieu of groundwater use; in dry years, it doesn’t use its surface rights or pumps water to partners.

Colorado

Beneficial Use (relevant to sustainability): Recreation (incl. fish & wildlife), recreational in-channel diversions, minimum flows (Co l o . Re v . St a t . § 37-92-103(4)) Abandonment/Forfeiture: 10 years, all or any portion Exempt from abandonment: loans to CWCB, a banking program, approved land fallowing program, approved water conservation program. Municipalities are exempted. (Co l o . Re v . St a t . § 37-92-103) Changes and Transfers: A change of a water right, implementation of a rotational crop management contract, or a plan for augmentation must be approved by a referee or judge. Transfers from agricultural irrigation to other beneficial uses shall include reasonable provisions for revegetation and noxious weed management. Courts also may impose transition mitigation and bond indebtedness payments. (Co l o . Re v . St a t . § 37-92-305) If an application for any of the above has been filed with a water court and no decree yet issued, the state engineer may approve a temporary change every year for up to 5 years. (Co l o . Re v . St a t . § 37-92-308) Loans to CWCB for a maximum of 120 days, 3 in 10 years, for instream flows or by an irrigator to another irrigator on the same stream for 180 days is allowed if approved by the state engineer and division engineer, respectively. (Co l o . Re v . St a t . § 37-83-105) Instream Flows: Only the CWCB may appropriate or acquire by grant, purchase, donation, bequest, devise, lease, exchange, or other agreement water for minimum flows or natural lake levels (as it deems necessary to preserve the natural environment to a reasonable degree). Prior to using its funds to acquire and convert water rights, the board shall request recommendations from the division of wildlife and the division of parks and outdoor recreation. The board also shall request recommendations from the USDA and Interior. (Co l o . Re v . St a t . § 37-92-102(3))

57 Water Banking: The legislature created the pilot water banking program in the Ar- kansas River Basin. The law required favoring in-basin use over trans- basin development and authorized only stored water (not direct flows) for placement in the bank. C( o l o . Re v . St a t . § 37-80.5-104)

Idaho

Beneficial Use (relevant to sustainability): Minimum flows for the protection of fish and wildlife habitat, aquatic life, recreation, aesthetic beauty, transportation and navigation, water quality, and to prevent interstate diversions (Id a h o Co d e § 42-1501, -223(2)) Abandonment/Forfeiture: 5 years (Id a h o Co d e § 42-222) Exempt from forfeiture: nonuse from conservation that maintains full beneficial use, land application of waste instead, mitigation, compliance with groundwater management plan, in a supply bank, rented, or sold (Id a h o Co d e § 42-223) Changes and Transfers: Any right holder may apply to the DWR for a use change. In addition to no injury to other right holders, a change may not adversely affect the local economy where the right originated, significantly affect the agricultural base of the local area, nor be put to a use other than a beneficial one. I( d a h o Co d e § 42-222) Upon declaration of a drought emergency, the director of the DWR may allow temporary changes. (Id a h o Co d e § 42-222A) Instream Flows: When the Idaho WRB wants to appropriate minimum stream flow from unappropriated flows, it must submit an application to the director of the DWR, including the purpose of the minimum flow and the period of time or season proposed. It must be necessary for the preservation of fish and wildlife habitat, aquatic life, recreation, aesthetic beauty, navigation, transportation, or water quality of the stream; in the public interest; capable of being maintained at least 50% of the time; and not injuring another right holder. Approved applications must be accepted (or amended) by the state legislature before becoming effective. (Id a h o Co d e § 42-1503) Water Banking: The WRB operates the state water supply bank, serving as an intermediary in the rental of water. The board purchases, leases, or

58 Western Water in the 21st Century

otherwise obtains water rights. The terms and conditions of water rental from the bank must be approved by the director of the DWR. The bank is intended to provide adequate supplies and provide funding for facility efficiency. I( d a h o Co d e § 42-1761, -2, -3) As with other Idaho rental pools, the Lemhi Rental Pool is run by a local committee appointed by the IWRB. It is the only local rental pool that rents natural flow water and explicitly allows rental for instream flow purposes. I( d a h o Co d e § 42-1765A)

Montana

Beneficial Use (relevant to sustainability): Recreation, fish and wildlife, aquifer recharge, aquifer storage and recovery, use of rights leased through a DFWP program or approved by DFWP, temporary change to enhance instream flow for fishery resources, use by DFWP of a right changed to instream flow to benefit fishery resources (Mo n t . Co d e Ann . § 85-2-102(4)) Abandonment/Forfeiture: 10 years, all or any portion Exempt from abandonment: lease, temporary change, or state or federal conservation set-aside program (Mo n t . Co d e Ann . § 85-2-404) Changes and Transfers: The right to use water passes with the transfer of land (unless specifically exempted) or by operation of law without loss of priority. Changes in ownership must be filed with the DNRC. The DNRC must approve changes in water use. (Mo n t . Co d e Ann . § 85-2-403) The DNRC also must approve any temporary changes in a right, which are not to exceed 10 years unless for a new water conservation or storage project (30 years) – renewals for either shall not exceed 10 years. (Mo n t . Co d e Ann . § 85-2-407) Instream Flows: DFWP may change a water right it leases or holds in fee to an instream flow use to benefit a fishery. A lease for instream flows may be entered for up to 10 years per term, but not renewed after June, 2019. DFWP may change its rights in fee simple to instream right on only 12 stream reaches from 2007 to 2019, and none after. (Mo n t . Co d e Ann . § 85-2-436) Individuals may apply to temporarily (max. 10 years, unless new conservation or storage project, then 30 years) change rights to an instream flow purpose, or lease them to another person for that end, if they prove that it is needed for the fishery and won’t impair other rights. M( o n t . Co d e Ann . § 85-2-408)

59 The state, U.S., or agencies of either may appropriate a new right to maintain a minimum flow, level, or quality of water throughout the year or at periods or for a length of time that the DNRC designates, but it shall not exceed 50% of avg. ann. flow on gauged streams. They are reviewed every 10 years. (Mo n t . Co d e Ann . § 85-2-316)

Nevada

Beneficial Use (relevant to sustainability): Any recreational purpose (has been interpreted to include fish & wildlife) (Ne v . Re v . St a t . § 533.030) Abandonment/Forfeiture: 10 years for surface water rights Failure to use surface water for a beneficial purpose does not constitute forfeiture. There is no abandonment if within those 10 years there was delivery of water, payment of maintenance costs, capital improvements, or actual maintenance. The period of nonuse must immediately precede the abandonment claim. A water right primarily for agriculture is not abandoned if land is converted to urban use or has been acquired for a municipal purpose. (Ne v . Re v . St a t . § 533.060) 5 years for groundwater rights After non-use of part or all of a groundwater right for four consecutive years, the state engineer shall notify a water right owner that he has one year after the date of the notice to provide proof of beneficial use of the water right to avoid forfeiting it. If proof is not provided within one year, the state engineer shall declare the right forfeited within 30 days. (Ne v . Re v . St a t . § 534.090) Changes and Transfers: A water right holder wishing to change the place of use, manner of use, or place of diversion of his right must apply to the state engineer for a permit. The state engineer shall approve applications for temporary changes (not to exceed 1 year) if the change is in the public interest and does not impair other water rights. (Ne v . Re v . St a t . § 533.345) Instream Flows: Water used for “wildlife purposes” can include the watering of wildlife and the establishment and maintenance of aquatic habitats. (Ne v . Re v . St a t . § 533.023) In Nevada v. Morros, 766 P.2d 263, the Nevada Supreme Court up- held the right to appropriate water for instream flows.

60 Western Water in the 21st Century

Water Banking: The state engineer issued a groundwater pumping order of an average of 15,950 AF/year for Truckee Meadows Water Authority rights. Water not pumped is banked, and allows for an annual drought pumping limit of 22,000 AF for up to three consecutive years.

New Mexico

Beneficial Use (relevant to sustainability): New Mexico does not have an official list. The State Engineer has broad authority to determine what constitutes beneficial use. Abandonment/Forfeiture: 4 years plus 1 year after notice, all or any portion Exempt from abandonment: storage reservoirs, circumstances beyond the control of owner, acreage or conservation reserve program, active duty in the armed forces, showing of reasonable delay to state engineer, state engineer finds it to be in the public interest, municipality/county following water development plans or preserving supplies, or in a water conservation program, conservancy district, acequia or community ditch association, soil/water conservation district, irrigation district, or ISC (N.M. St a t . Ann . § 72-5-28) Improved irrigation methods or changes in agricultural practices resulting in conservation of water shall not affect an owner’s water right. (N.M. St a t . Ann . § 72-5-18) Changes and Transfers: Water rights for irrigation transfer with the land unless previously alienated. All or any part of a water right may be severed from the land and become appurtenant to other land or may be transferred for other purposes without losing its priority of right if approved by the state engineer. With approval of the state engineer, an appropriator may amend the right. (N.M. St a t . Ann . § 72-5-22, -23, -24) Water leases must be approved by the state engineer. Initial or renewal terms may not exceed 10 years except when leased by municipalities, counties, state universities, etc. (40 years). Lease may not be used to accumulate water year to year or to avoid forfeiture. (N.M. St a t . Ann . § 72-6-3, -4) Instream Flows: No statutes address instream flows. [The New Mexico AG issued a legal opinion stating that instream uses are beneficial uses and that changing the purpose of use of existing rights to instream flows is not prohibited – founded onState

61 Game Comm’n v. Red River Valley Co., 182 P.2d 421 (beneficial use includes fishing and recreation) and Reynolds v. Miranda, 493 P.2d 409 (diversion required for agricultural rights)] Water Banking: The New Mexico legislature authorizes the interstate stream commission to recognize a water bank established by an irrigation district, a conservancy district, an artesian conservancy district, a community ditch, an acequia or a water users association in the lower Pecos river basin for purposes of compliance with the Pecos River Compact. Such banks are intended to have procedures for temporary transfer without formal proceedings before the state engineer. Transfers are limited to those within the same stream system or underground water source. (N.M. St a t . Ann . § 72-1-2.3)

Oregon

Beneficial Use (relevant to sustainability): Recreation, enhancement of fish and wildlife and their habitats, conservation, and pollution abatement (Or. Re v . St a t . § 537.332, -4) Abandonment/Forfeiture: 5 years, all or any portion Forfeiture claim must be within 15 years of end of nonuse. Rebut the presumption of forfeiture: right held by municipality/ town for municipal use, using reclaimed water or land application instead, leased as instream right, climate conditions, no water available, federal conservation reserve program, and economic hardship (Or. Re v . St a t . § 540.610) Changes and Transfers: The holder of any water right may amend it without losing priority if approved by the WRD. (Or. Re v . St a t . § 540.510, -20) Any water right holder may apply to the WRC to use water from a different source in exchange for supplying replacement water to satisfy prior appropriations from the other source if: the person’s source of water is at times insufficient or better conservation and use of waters can be accomplished. (Or. Re v . St a t . § 540.533) A holder of an irrigation right may temporarily transfer (for no more than 25 years and with approval of the WRD) all or a portion of the right to a domestic water supplier in the Deschutes River Basin for municipal use. (Or. Re v . St a t . § 540.585) Instream Flows: An instream water right may only be held by the WRD and in trust

62 Western Water in the 21st Century

for the people for purposes of recreation, pollution abatement, navigation, and conserving/enhancing fish, wildlife, and their habitats. (Or. Re v . St a t . § 537.332) Any person may purchase, lease or accept a gift of all or a portion of an existing water right for conversion to an instream water right. Split use between the existing right and instream right in a year is allowed if use is not concurrent and users report measurements to the WRD. (Or. Re v . St a t . § 537.348) The priority date for established minimum flows and existing rights when changed to instream flows is the original appropriation date. (Or. Re v . St a t . § 537.334, -48) The Departments of Fish and Wildlife, Environmental Quality, and Parks and Recreation can request WRC to issue a new water right for instream flows. (Or. Re v . St a t . § 537.336) Water Banking: In accordance with Or. Rev. Stat. § 537.746, the WRC adopted the Deschutes Basin Mitigation Bank and Mitigation Credit Rules to facilitate transactions among holders of mitigation credits and persons interested in acquiring mitigation credits to offset the potential in- terference with hydraulically connected surface waters caused by ground water withdrawals within the Deschutes River Basin. The mitigation credits awarded for a completed project, or any completed phase of the project, are equal to the amount of water made available by the project as determined and approved by the WRD.

Texas

Beneficial Use (relevant to sustainability): Recreation and pleasure, public parks, and game preserves (but these are at the end of the preference order) (Te x . Wa t e r Co d e Ann . § 11.023) Abandonment/Forfeiture: 10 years, all or any portion Nonuse must immediately precede cancellation proceeding Exempt from cancellation: Conservation Reserve Program, most of the water used in accordance with a regional water plan, permit is for meeting long-term public water supply, nonuse resulting from conservation measures in accordance with a submitted conservation plan (Te x . Wa t e r Co d e Ann . § 11.172-3) Reasonable diligence is considered in cancellation proceedings and includes submitting the water right to the Texas Water Bank,

63 putting it up for sale, or whether it has been reserved for instream or bay and estuary flows (Te x . Wa t e r Co d e Ann . § 11.177) Changes and Transfers: Any change to the place of use, purpose of use, or place of diversion must be approved by the TCEQ. Not only must the change not adversely impact other right holders, but also not the environment more than during full exercise of the right before the change. (Te x . Wa t e r Co d e Ann . § 11.122) Instream Flows: The Texas legislature has not expressly authorized granting water rights exclusively for instream flows. But, in basins with unappropriated water, the TCEQ is directed to establish an environmental set- aside below which water should not be available for appropriation. In basins where this set-aside is insufficient, the legislature requires that public and private market approaches for filling the gap be ex- plored and pursued. For existing water rights, those that are amended to authorize use for environmental purposes are to be enforced like rights for other purposes. (Te x . Wa t e r Co d e Ann . § 11.0235) The commission may not issue a new permit for instream flows. (Te x . Wa t e r Co d e Ann . § 11.0237) Water Banking: The TWDB is authorized to establish the Texas Water Bank to facilitate water transactions to provide sources of adequate water supplies. The bank deals in rights to any source of water. The bank operates as a bulletin board, negotiating sale prices, maintaining a registry of water rights depositors, and acting as a clearinghouse for transaction info. But, the Board also has authority to act as a broker, purchasing, holding, and transferring water or water rights in its own name.

Utah

Beneficial Use (relevant to sustainability): Fish propagation, public recreation, reasonable preservation/enhancement of the natural stream environment (Ut a h Co d e Ann . § 73-3-30) Abandonment/Forfeiture: 7 years, all or any portion Judicial action must be commenced within 15 years of end of 7-year nonuse period. Holder can file a nonuse application for all or a portion of the right for 7 or fewer years for conservation or

64 Western Water in the 21st Century

efficiency practices or approved groundwater recharge. Exempt from forfeiture: leases, participation in a federal conservation fallowing program, insufficient water, surface or aquifer storage, substantially all of the water right was used within the 7 years, public supplier is conserving/holding for a reasonable 40-year future need, another water right is sufficient, or the right is subject to an approved change application (Ut a h Co d e Ann . § 73-1-4) Changes and Transfers: Anyone entitled to the use of water may make permanent or temporary (not exceeding 1 year) changes to the right without loss of the original priority date if approved by the state engineer. The state engineer may not reject an application solely because it would impair a vested right; if proper, the state engineer may approve the change for part of the water or on the condition that the applicant acquire the conflicting right. U( t a h Co d e Ann . § 73-3-3) Water rights are transferred in substantially the same manner as is real estate. (Ut a h Co d e Ann . § 73-1-10) Instream Flows: The DWR or DPR may file a permanent or temporary change application with the state engineer for instream flows necessary for fish, recreation, natural stream environment. They may change a right owned in fee, leased, gifted, exchanged, purchased for this purpose, appurtenant to acquired land, or via agreement. A fishing group may file a fixed time change application on a perfected, consumptive water right for instream flows to protect or restore habitat for one of three native trout species. Specific points in the river must be identified, and reports must accompany the application in each case. (Ut a h Co d e Ann . § 73-3-30) The state engineer may withhold approval of an appropriation application if it will unreasonably affect public recreation or the natural stream environment. [This may serve the same purpose as new appropriations for instream flows] (Ut a h Co d e Ann . § 73-3-8)

Washington

Beneficial Use (relevant to sustainability): Recreation, fish, shellfish, game and other aquatic life (Wa s h . Re v . Co d e § 90.14.031) Instream flows (Wa s h . Re v . Co d e § 90.42.040)

65 Abandonment/Forfeiture: Any consecutive 5 years (after July 1, 1967), all or any portion (Wa s h . Re v . Co d e § 90.14.160) “Sufficient cause” for nonuse includes: unavailable water, active service in the armed forces, legal proceedings, fed/state agency leases or options, federal law restrictions, weather (if facilities are still good), conserved water in the Yakima enhancement project (if reallocated), crop rotation (if remainder beneficially used) Exempt from relinquishment: standby supply for drought, for future development within 15 years, municipal supplies (currently debat- ed), leases, use satisfied by agricultural industrial process water, trust water rights (Wa s h . Re v . Co d e § 90.14.140) Changes and Transfers: The right to water remains appurtenant to the land on which it has been beneficially used, but the right can be transferred to another and become appurtenant to other land or place of use without loss of priority if approved by the DOE. The point of diversion or purpose of use also may be changed. (Wa s h . Re v . Co d e § 90.03.380) Instream Flows: The state may lease or acquire all or portions of existing water rights, by purchase or gift, from any person or entity to be put in a trust managed by DOE. (Wa s h . Re v . Co d e § 90.42.080) A water right acquired by the state with the condition that it assist instream flows will be administered as a trust right in compliance with the condition. (Wa s h . Re v . Co d e § 90.38.020) A trust water right retains the same priority date as the water right from which it originated, but as between them the trust right shall be deemed to be inferior in priority. (Wa s h . Re v . Co d e § 90.42.040) DOE shall retain base flows necessary to preserve wildlife, fish, sce- nic, aesthetic, other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Water withdrawals conflicting therewith shall be authorized only where serving the public interest. (Wa s h . Re v . Co d e § 90.54.020) Water Banking: DOE is authorized to use the trust water rights program in the Yakima River basin for water banking purposes. Among other things, the water bank may be used to provide a source of water rights that the DOE can make available to third parties on a temporary or permanent basis for any beneficial use. The bank may not carry over water year to year. (Wa s h . Re v . Co d e § 90.42.100)

66 Western Water in the 21st Century

Effective July 26, 2009, Senate Bill 5583 expands DOE authority to use the trust water rights program for water banking purposes statewide. In addition, it repeals the prohibition on carrying water over from year to year, so long as the total water supply is not negatively affected by doing so. In 2001, DOE instituted an emergency leasing program in the Ya- kima basin to facilitate short-term water transfers, alleviate the impacts of the drought, and facilitate expenditure of state emergency drought funds to increase instream flows. It included point of diversion changes as well as land fallowing. There was a quick turn around of transfer requests – 15 days – since all key agencies and organizations were represented on the water transfer work- ing group. The group has operated in both wet and dry years since 2001.

Wyoming

Beneficial Use (relevant to sustainability): Storage for recreational pools or release for instream flows to establish or maintain new or existing fisheries W( y o . St a t . Ann . § 41-3-1001) Abandonment/Forfeiture: 5 years, all or any portion Rights for irrigation are not subject to partial abandonment for failure to irrigate all lands in permit if facilities are in usable form and there is insufficient water available. The state engineer and those who would benefit from the forfeiture may initiate forfeiture proceedings. The state engineer may not do so if the water rights currently are being put to beneficial use, wholly or in part. Use after the date of notice is not evidence of beneficial use. (Wy o . St a t . Ann . § 41-3-401, -2) Changes and Transfers: Before changing the place of use or type of use of a water right, the holder must petition and receive approval from the board of control. In making its decision, the board of control shall consider all facts, including: the economic loss to the community and state, extent to which that loss will be offset by the new use, and whether other sources of water are available for the new use. (Wy o . St a t . Ann . § 41-3-104) The water right shall retain its date of priority after such a change. (Wy o . St a t . Ann . § 41-3-108) Temporary water transfers (maximum of two years) must be ap-

67 proved by the state engineer and may only be used across sectors and for specific purposes, including highway and railroad construction and drilling operations. (Wy o . St a t . Ann . § 41-3-110) Exchanges are allowed among any combination of direct flow, storage, and groundwater rights, but the state engineer must grant the exchange. (Wy o . St a t . Ann . § 41-3-106) Instream Flows: Unappropriated water may be appropriated for instream flows to maintain or improve existing fisheries. Stored water may be used for instream flows to establish or maintain new or existing fisheries. (Wy o . St a t . Ann . § 41-3-1001) The state may acquire any existing water right by transfer or gift for the purpose of providing instream flows. These are administered by the state engineer. (Wy o . St a t . Ann . § 41-3-1007) The Game and Fish Commission reports to the WDC what stream segments, time or year, and minimum flow levels are necessary to be protected. The latter applies to the state engineer for a permit. (Wy o . St a t . Ann . § 41-3-1003)

68 Western Water in the 21st Century

Appendix D

State Instream Flow Laws

State Government Other Parties Who may Who may Hold Agency that may that may Transfer or an Existing Appropriate a New Appropriate a Change a Water Water Right ISF Water Right New ISF Water Right to ISF Changed to ISF Right

The United States or Any person Any person The state or Arizona Arizona or a political (ARS 45-151) (ARS 45-172) its political subdivision thereof subdivisions (ARS 45-151) (ARS 45-172) N/A N/A Any person Any person California entitled to the use entitled to the of water use of water (CWC 1707) (CWC 1707) Colorado Water N/A Any person, Colorado Water Colorado Conservation Board (CRS 37-92- including any Conservation (CRS 37-92-102(3)) 102(3)) governmental Board entity (CRS 37-92- (CRS 37-92-102(3)) 102(3)) Idaho Water N/A Anyone with rights Idaho Water Idaho Resources Board in the Wood River Resources Board (IC 42-1503) Basin (IC 42-1508); (IC 42-1508); U.S. Bureau of U.S. Bureau of Reclamation in Reclamation may the Snake River lease water from Basin Idaho’s water bank for use in the Snake River Basin The state, any N/A Department of Any person: Montana political subdivision Fish, Wildlife, and owner or lessee or agency of Parks of a water right the state, or the (MCA 85-2-436); (MCA 85-2-408); United States or the owner of Department of any agency of a water right Fish, Wildlife, and the United States (MCA 85-2-408) Parks (MCA 85-2-316) (MCA 85-2-436) The United States Any person since Any person Any person since Nevada and Nevada, ISF is considered (NRS 533.345); ISF is considered including any a beneficial use specifically a beneficial use political subdivision under agriculture under or agency thereof NRS 533.030(2). (NRS 533.0243) NRS 533.030(2). (NRS 533.010) N/A N/A Anyone with a Anyone (1998 New perfected right memo from Mexico (1998 memo from State Engineer State Engineer to to Attorney Attorney General) General)

69 State Government Other Parties Who may Who may Hold Agency that may that may Transfer or an Existing Appropriate a New Appropriate a Change a Water Water Right ISF Water Right New ISF Water Right to ISF Changed to ISF Right

The Water N/A Any person The Water Oregon Resources Dept. (ORS 537.348) Resources (ORS 537.332(2)), Department at the request of in trust (ORS the Dept. of Fish 537.332(3)) and Wildlife, Dept. of Environmental Quality, or State Parks and Recreation Dept. (ORS 537.336) Commission on N/A Anyone with an Anyone Texas Environmental existing water (TWC 11.0235) Quality may not right - water right issue a new instream amendments flow permit to allow for (TWC 11.0237), but environmental should establish use are treated environmental like any other set-asides in basins amendments where water (TWC 11.0235) is available for appropriation (TWC 11.0235)

N/A, but the State N/A Division of Wildlife Division Utah Engineer may (UC 73-3-30) Resources, of Wildlife withhold approval Division of Parks Resources, of an appropriation and Recreation, Division of Parks application if it will and fishing groups and Recreation, unreasonably affect (UC 73-3-30) and fishing the natural stream groups - i.e., the environment right holder at (UC 73-3-8) time of transfer (UC 73-3-30) The Department N/A Any holder of The Department Washington of Ecology has (RCW 90.03.247) an existing right of Ecology in the authority to (RCW 90.42.080) trust set minimum base (RCW 90.42.080) flows. (RCW 90.03.247) Water Development N/A Anyone - via The State of Wyoming Commission (in the transfer or gift to Wyoming - name of the state) the state administered (WSA 41-3-1003(c)) (WSA 41-3- by the State 1007(a)) Engineer and the Board of Control (WSA 41-3- 1007(a))

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