National Academies Press: OpenBook

Water Transfers in the West: Efficiency, Equity, and the Environment (1992)

Chapter: 3 The Role of Law in the Transfer Process

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Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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3

The Role of Law in the Transfer Process

What I witnessed for a few hours was the operation of that legal mechanism by which water is prepared for its eventual pumping toward money. It has to be adjudicated, it has to have its claims of ownership documented, it has to have its title quieted, it has to be made merchantable, saleable, which is what enables it to be freed up from land, acequia, community and tradition.

Stanley Crawford, 1990

In the western United States, as in virtually all societies of the world, water is a public resource that is used under rules designed to achieve broad public benefits. Beyond the most basic human needs, it was important in the midnineteenth century to encourage productive use of water in the West, where its availability is seasonally and geographically limited. This was achieved by allowing citizens to use water for private gain and by providing legal protection for those uses. Like a subsidy, the award of water rights to private parties created incentives to encourage the investment and economic activity necessary to meet both regional and national development goals.

Investments in natural resource development sparked both economic activity and settlement in the early West. The land was almost all federally owned, so a system of according legally secure water rights to the first user encouraged investments in irrigation systems to serve homesteads carved out of the public domain and mines on public land. Although the land was federally owned, the government did not dictate how rights to water would be allocated. Instead, it left the settlers to their own devices, and they created a system of appropriative rights to use the water found on the government's land. The earliest user to take water out of the stream and put it to a “beneficial use” acquired the right to continue using it and could prevent others from interfering with the use. This approach was consistent with the government's desire to promote western expansion as well as local desires for economic development. Thus the

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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prior appropriation doctrine was adopted throughout the American West.

As western economies matured, the water rights system proved adaptable to increasing and competing demands. The key to adaptability was that water rights were not restricted to use on a particular parcel of land or a specific type of use. In principle, rights could be transferred from one user to another, and water could be delivered as far as technology and economics could move it.

The ability of an appropriator to transfer a water right—that is, to convey the legal priority to use a quantity of water for a beneficial purpose—is the valuable “property” that the law recognizes in water. A transfer is subject to the condition that a change in use must not injure any other water rights holder. This “no injury” rule is the only universal restriction on water transfers. Some states, however, began to freight the privately held right with other restrictions.

During the early part of the twentieth century, states enacted laws that sometimes frustrated the transferability of water rights. The laws were responses to sentiment that sought to stabilize agriculture and prevent speculation. Some states ruled that water rights were attached to a particular parcel and could not be transferred away from it. Others restricted transfers out of agricultural uses. Together with application of the no injury rule, these restrictions made the transfer process more cumbersome but still worth the effort when the profits from selling were great enough.

A far more serious problem with the transfer process, however, is that several interests historically have been left out of the decisionmaking processes used to allocate and reallocate water. As discussed in Chapter 2, these include but are not limited to rural communities, ethnic minorities, fish and wildlife and their habitats, and the public. It is now clear that changes in water law and institutions are needed to ensure that all the significantly affected interests, or third parties, are represented in water transfer negotiations.

Indeed, consideration of the interests of parties not directly involved in buying or selling a water right is becoming part of the water transfer process. States are changing their laws in a variety of ways to respond to demands for broader public representation in water transfers. Several federal laws and programs are beginning to address transfer-related problems. The patchwork of state and federal laws acts as a bandage—covering specific issues such as endangered species, water quality, and wetland protection—but fails to provide a comprehensive allocation vision. In addition, some interests have inveigled public agencies or parties directly involved in transfers (sometimes cities or other public entities) to give them a

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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voice in the decisionmaking process and compensation for values lost.

Although the evaluation of third parties in water transfer activities in the West remains incomplete, methods for including them in the process can be gleaned from the experiences in several states. Based on research and the case studies reflected in Chapter 5, Chapter 6, Chapter 7, Chapter 8, Chapter 9, Chapter 10 through Chapter 11 of this report, the committee has identified the following institutional measures and legal authorities for integrating multiple public values and protecting affected interests in the water transfer process:

  • public interest review processes;

  • impact assessment;

  • comprehensive planning;

  • judicial public trust doctrine;

  • Clean Water Act, Section 404;

  • ad hoc negotiation among affected parties; and

  • other legislation (including, but not limited to, instream flow laws, area-of-origin protection, water quality laws, conservation programs, endangered species protection, and land use controls).

It seems inevitable that one price of improving water laws will be greater complexity. Yet the need to consider interests important to broad segments of society is so fundamental as to justify some complication of the transfer process. The committee believes that rigorous consideration of public values is necessary and that it is possible without creating major obstructions to desirable transfers.

A goal of modern western water policy, then, is to streamline the systems that impose superfluous restrictions, costs, and delays on the transfer process and, at the same time, to devise new ways to account for important interests that are now left out. These actions may result in a net increase in the transaction costs of transfers, but these costs are justified by the greater public satisfaction and broader public benefits they will ultimately bring. Moreover, a system that accounts for all significant costs will in the end produce a fair and efficient allocation of water. It should encourage transfers with high net gains and discourage those with high third party costs.

As mentioned above, there is no coherent body of law governing how and under what conditions water is transferred. A single transfer can involve several state and federal laws. A transfer in one state can take several years and cost thousands of dollars, whereas an apparently similar transfer in another state can be accomplished quickly and cheaply (MacDonnell, 1990). The various elements of the law of water transfers as it exists now are described below, followed by a discussion of options for improving water law and policy.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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STATE WATER ALLOCATION LAWS

Once water is appropriated and a right established, that right generally may be used in other places, it may be used for other than its original purpose, and it may be conveyed to others. Water rights are property rights and they include the right to make changes. As with other property rights, water rights are always subject to redefinition and regulation by state law. From the earliest prior appropriation cases, water rights could be changed only to the extent that no other water rights were affected adversely. Other conditions have been added by some states to achieve other social goals.

There is a general trend in the West of encouraging transferability of water rights to achieve greater efficiency of water use. This trend is visible in the removal of some formal barriers to transfers, implementation of existing laws in ways more conducive to transfers, and, in a few cases, the enactment of legislation to encourage transfers. Legislation that directly involves states in facilitating transfers is rare; California law, however, directs state officials to play an active role in facilitating transfers, and, as noted in Chapter 2, both California and Idaho operate water banks.

Although many states apparently perceive the benefits of water transfers, few have fully considered how best to deal with the negative effects on third parties. Although the issue is not treated with a coordinated approach, several state laws and programs address some of the impacts on affected parties or establish processes to help assess, avoid, or mitigate the effects of transfers. But the overriding legal concern at the state level has been to protect other water rights holders —not third parties—from transfer impacts.

The No Injury Rule

All third party protection schemes build on one fundamental principle, the no injury rule. In the western states, a person seeking to change the use of a water right must request permission from an administrative board, state engineer, or official (or, in Colorado, from a court). The request may come from either the buyer or the seller; sometimes contracts for water transfers are made contingent on getting this approval. Changes in the way water is used, place of use, point of diversion, purpose, or time of use are permitted subject to the condition that the change must not impair uses by other water rights holders. This means that a change in use must not alter the stream conditions that existed when others made their appropriations if it would interfere with others' ability to continue their rea-

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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The Role of the State Engineer in Water Transfers

In every western state, some public official or entity is responsible for administering the state's programs of allocation of use of water resources. In the early days of settlement, water rights were initiated by diversion and use and by the posting and recording of notices of intent to use water from a stream much in the manner of a mining claim. By the beginning of the twentieth century, this system began to give way to an application and permit system administered by a state official (the “Wyoming Plan”). In many states this person was referred to as the state engineer, although sometimes the official has been designated state water commissioner, state reclamation engineer, chief engineer, or state hydraulic engineer. Today, although the title of state engineer continues to exist only in Colorado, Utah, Wyoming, New Mexico, Nevada, and North Dakota, that office or its equivalent in other states has responsibility for most state water development and use programs.

In general, water rights are property rights and may be transferred as part of the sale of land on which they are used or apart from the land. Typically, applications to obtain approval of a change in point of diversion or place, period, or nature of use of a water right in a western state are filed with the state engineer. Although the procedures may differ from state to state, the purposes are similar. The state engineer examines proposed transfers both to protect existing uses of water from the effects of third party water rights transfers and to protect the public interest.

The state engineer must also ascertain the amount of water that can be transferred, which is generally only the quantity that has been consumed by the prior use. Amounts diverted but not consumed must be left in the stream to protect other users. In making this determination, the state engineer must also consider the impacts of a proposed change on the timing of withdrawal and return of the unconsumed part of the water diverted to a source. Such a change could occur where a right is proposed to be converted from agricultural use to municipal or industrial use. For example, most agricultural water demand is seasonal, whereas municipal and industrial use can be either continuous or seasonal, as is the case with golf courses and other landscape irrigation. Conversion of use without limitations and conditions could result in injury to other users of the resource.

State engineers are quasi-judicial officers with responsibilities to make initial decisions concerning water rights matters. Their actions are governed by state statutes and prior court decisions

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

that have interpreted the law. Statutes are designed to provide an orderly process and to give some measure of security and certainty to established uses of water, thereby protecting the economy of an area. If holders of water rights could transfer the point of diversion or place, period, or nature of use of a right without regard for the effects such a transfer would have on other users, the entire water system of the West would be in jeopardy. To prevent such adverse impacts, the state engineer may impose conditions in transfer applications. These may include, for example, limitations on the duration of pumping, restrictions as to the depth or perforation interval of a well, and limitations as to the time of year in which water may be diverted.

Even in the absence of any injury to other water rights holders, the state engineer in most states has the discretion to deny a transfer application on the basis that to grant it would be inimical to the public welfare of the state or would be contrary to the “public interest. ” Until recently, public interest review was occasionally used to deny appropriations for inefficient projects or to subordinate a prior right to a larger public project. State engineers are now being asked to use the principle to accommodate the full range of contemporary water uses from irrigation and hydropower to the protection of ecosystems. There are few precedents to guide the state engineer's discretion, and the problem is compounded by the argument that the judicial public trust doctrine requires that the balance be weighted in favor of environmental values.

sonable uses. The no injury rule extends to all appropriators, junior as well as senior, and can be extended to other water use claimants.

Strong as the no injury rule is, objecting third parties are not always fully protected. A change may be allowed if there will be enough water for the objecting water rights holder to enjoy the right. But the rights holder remains vulnerable to call by a more senior rights holder. Before the change, there might have been enough water in the stream to satisfy all rights holders, but now the original objector will have to cease taking water to satisfy the more senior right. This can happen when the change is entirely downstream of the objector if it results in there being less water for a downstream senior rights holder. The senior rights holder need not actually object to the change, because the principle of seniority ensures that

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

junior appropriators are responsible for guaranteeing that senior rights are satisfied. For this reason the objector can assert the increased vulnerability to a call as an “injury” and object to the change under the no injury rule.

Permit proceedings for a change of use provide an opportunity for others to object. Permission may be granted even where injury is incurred, but conditions may be attached to protect other users— such as restricting the amount diverted, replacing water in the stream from other sources, or supplying supplemental water to objecting parties. Sometimes objectors accept cash or other concessions (e.g., headgates, sprinkler or drip irrigation systems, or reservoirs). Appropriators often complain of injury when a proposed change will deprive them of return flows they could use. (Irrigators typically return a large part of the water used for irrigation to the stream via drainage ditches, seepage, and surface runoff, and this water is used by other appropriators downstream.) If a farmer wants to irrigate previously unirrigated lands but not increase the area irrigated, the place of return flows may change. The return flows will no longer be available to another water rights holder who benefited from the return flows at the old location. Thus the change in place of use will not be allowed. One way to limit this type of transfer-related injury is to limit the transferable amount to the past consumptive use only.

Historical Use Limitation

Courts have added a gloss on the no injury rule to take account of the fact that water rights often exist on paper that do not reflect how water actually has been used. Typically in the West, the quantity of water represented by old rights is greatly overstated. Furthermore, rights often are stated in terms of the amount one may divert, even though much of the amount diverted actually has been returned to the stream. Courts and administrative agencies cannot rely on old court decrees for guidance because these are notoriously inaccurate indicators of the amounts of water actually put to beneficial use. Before there were state water agencies staffed with professional engineers to oversee the appropriation process, the quantities appropriated often were based on the “best guess” of the appropriator (which was typically high). Thus in many western states when an appropriator seeks to change the use of a water right, which is necessary to transfer the right away from the original land or to a new use, the amount of historical consumptive use must be determined.

The quantity of water that may be transferred to a new use will be limited to the amount of water reasonably consumed. This calcu-

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

lation is based on historical evidence. Because accurate records of the amounts consumed are rare, the state engineer or water agency may consider the type of crops cultivated, soil type, climate, and other factors that indicate water consumption. In some cases, experts are hired; most agencies, however, rely on calibrated equations and climatic data to estimate use for particular locales and particular crops.

The purpose of the historical use limitation on transfers and changes of use is to maintain the conditions that were present when all existing appropriators began their uses. It ensures that they will not be disrupted or harmed by changes. A common problem with transfers from agricultural to municipal use is that irrigation is usually seasonal and municipal demand is relatively constant all year. If a city buys a farmer's water right, the city may be able to take water out of the stream only at the time the farmer historically diverted it. The city may solve the problem by building a reservoir to store water during the irrigation season to be used later.

Appurtenancy Restrictions

Prior appropriation does not require that water rights be appurtenant (legally tied) to the land on which they originally were applied. Several states adopted appurtenancy rules during the reclamation era to promote a stable agricultural society. Under these rules, water rights can be transferred along with the land but not apart from it.

There were several motives for states to adopt appurtenancy rules, which effectively negate the right to transfer or change the use of water rights. It was one way of containing the problem of overstated water rights: the restriction made it unnecessary to deal with the disruption of stream conditions that might result if an artificially large right could be transferred and actually used. This problem is now addressed by the historical use rule, a solution that requires engineering expertise and administrative personnel that were lacking in an earlier era when it was easier simply to prohibit transfers.

Another motive for appurtenancy rules was to protect agriculture. Indeed, most laws restricting transfers or changes in use away from the land relate specifically to irrigation water rights. The laws were an attempt to keep good senior rights in agricultural uses. The rationale was that the rights would be “lost” to farmers if they could be moved to industry. Because agricultural rights were usually so overstated in amount, they were attractive to speculators. Prohibition on transfers away from the land limited the value of the farmer' s water right to its utility on the particular piece of land, a substantial modification of the farmer's property right in the water.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

Most appurtenancy restrictions have been removed or diluted as the result of economic and social pressures. Most states allow severance from the original land if continued use there becomes economically infeasible. Still, at least five states retain some legal restrictions on transfers away from originally benefited land, although the precise effect of these restrictions is difficult to determine. They are likely only to chill certain potential transfers rather than actually prohibit ones that parties are determined to carry out. These restrictions may have some indirect benefits to rural communities and basins of origin by cutting down the number or kind of transfers, but they do not directly address the third party effects of transfers.

Basin-of-Origin Protection

Moving water out of a region can have obvious effects. The economy, ecology, water quality, lifestyle, and potential for future growth all may be affected. The problem is exacerbated when large amounts of water are moved to another watershed because the basin of origin also loses the benefits of the return flows. A few states have enacted laws designed to restrict the movement of water from one watershed for use in another within the state. Such laws represent a departure from the original appropriation doctrine, which placed no limits on where water can be used. Restrictions to protect the basin of origin apply to new appropriations as well as to transfers of established rights.

California depends on moving large quantities of water from water-rich areas to areas of high demand within the state. The state's area-of-origin protection law gives an exporting area an absolute priority to make future use of water over that of the importing area, and it reserves for the county where water originates all the water it may need for future development. However, as a practical matter, it would be difficult for a county of origin to halt long-standing water exports. The statute provides no procedures and criteria for doing so. Colorado allows conservancy districts to make transbasin diversions out of the Colorado River basin only if they will not impair or increase the cost of present or future water supplies for the exporting area. This has resulted in the building of special “compensatory storage” reservoirs in the Colorado River basin by districts that have imported Colorado River water. More recently, one district has made a variety of concessions and payments to mitigate problems raised by objecting parties in the basin of origin. (See the Windy Gap example discussed in Chapter 6.) Interestingly, there are no similar restrictions on the large cities that import most of the water that is moved be-

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

tween watersheds in Colorado. Montana has a law that requires state participation in all out-of-basin transfers. The size of transfers is limited, and the state is bound to consider public interest factors.

State restrictions designed specifically to inhibit the transfer of water out of state are constitutionally suspect. The U.S. Supreme Court has ruled that because water can be essentially “an article of commerce,” states violate the commerce clause if their transfer regulations discriminate against interstate commerce (Sporhase v. Nebraska, 1982). Thus state regulation of water use must be evenhanded, treating water users within and outside the state basically the same. The state of New Mexico has struggled to fashion a set of constitutionally acceptable restrictions on transfers of ground water that will allay concerns about major appropriations of ground water for the benefit of El Paso, Texas (City of El Paso v. Reynolds, 1984), and the state has been able to prevent El Paso from obtaining a water right for out-of-state use (Tarlock, 1990).

Public Interest Review

Most States now require that appropriations of water must not be contrary to the public interest. The Utah Supreme Court has held that the same standard applies to a change of use (Bonham v. Morgan, 1989). Some legislatures have made the requirement explicit. Nevada requires rejection of a transfer application if it would be detrimental to the public interest. To make it more difficult for out-of-state applications to perfect water rights based on the Sporhase case, New Mexico extended to transfers its requirement that appropriations not be detrimental to the “public welfare.” In most states, administrative agencies simply apply the same standards relevant to new appropriations, including public interest requirements, to changes of use.

Introduction of consideration of the public interest into the transfer process potentially extends protection to interests well beyond the legal interests of water rights holders. At this point, however, it is not clear how far state agencies will go in recognizing and protecting the interests of people without water rights. The basic idea, a corollary of the principle that all water must be used beneficially, has long been part of western water law, but states have seldom denied new uses or transfers because they contravene the public interest. Sporhase and the new compass of third party interests have stimulated a great deal of interest in the idea, and states are beginning to apply it.

Practice varies from state to state. New Mexico, for instance, has always taken a narrow view of the public interest. When one lower

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

court held that the state engineer should consider the detrimental effects of a transfer on the culture and traditions of Hispanic rural communities, the decision was vacated by the state supreme court and the state engineer returned to his prior practice (In re Application of Sleeper, 1985). Arizona courts have interpreted the public interest as a basis for regulating ground water pumping in urban areas where that is a serious concern (Arizona Game and Fish Department v. Arizona State Land Department, 1975).

Legislation rarely defines the public interest, much less the process for determining whether it has been adversely affected. In Idaho a vague directive to the director of the Department of Water Resources to determine whether a proposed water use (a new appropriation or a transfer) conflicts with “the local public interest” led the state supreme court to refer to similar language in other Idaho laws and to examine how other states define the public interest (Shokal v. Dunn, 1985). As a result, administrative hearings are now held to allow affected members of the public to present evidence to the director on matters such as aesthetics, recreation, fishing, and ecosystem functions. The objective is to reach a decision that secures “the greatest possible benefit from the public waters for the public. ” This involves considering not only the benefit to the applicant but also the economic effect, loss of alternative uses, minimum streamflows, waste, and conservation.

Wyoming is one of the few states with a special review process for transfers. The review looks at economic losses to the community and state that offset benefits from the transfer and the availability of other sources of water. California, through its State Water Resources Control Board, reviews proposed transfers to see if they unreasonably affect the economy of the area from which water is transferred as well as fish, wildlife, and other instream uses.

Instream Flow Protection

In recent years, nearly all western states have enacted laws to protect instream flows. These laws are not targeted at transfers of water rights, but they can ameliorate the negative side effects of transfers by keeping some water flowing in streams regardless of what transfers occur. They may also accomplish the goal of securing instream flows by inhibiting transfers that would deplete a stream below the minimum protected under the instream flow law; instream water rights holders, usually the state, have standing to invoke the no injury rule in proposed transfers.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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Some states withdraw or reserve water from appropriation in specific streams. In others, state agencies actually appropriate water to remain in the stream and hold a right to use it for that purpose. Only Arizona and Alaska allow individuals and private organizations to appropriate instream flow rights. (Some individually held rights have been established under an earlier version of Colorado's instream flow law.)

Whether the quantity of water flowing in a stream where water is reserved from future appropriations will be protected from transfers of existing rights depends on the terms and interpretation of particular laws. What is clear is that when instream flow rights are appropriated and made part of the water rights system they will be fully protected against any transfer that would further deplete a stretch of the stream where the right exists. The no injury rule protects instream flow appropriations from the detrimental effects of changes in stream conditions in the same manner as it protects rights for other beneficial uses.

Some instream flow programs are criticized as being ineffectual because the rights appropriated under them are very junior. New appropriations of water for instream flows in streams where existing rights consume most or all of the water do not ensure that there will be water in the stream. But, as explained earlier, even junior rights can be effective in preventing others from transferring or changing the use of senior rights because of the no injury rule. In addition, some instream flow statutes can be used to acquire existing senior rights and convert them to instream flow rights. The Colorado law is being used to accept donations to the state Water Conservation Board of both conditional (unused) and absolute senior consumptive use rights that are converted to instream flow rights. Theoretically, the board could also purchase rights and dedicate them to instream flows.

The effectiveness of instream flow laws in protecting values that are traditionally unrepresented in the transfer process is limited by the scope of the laws. Many are restricted to minimal protection of fish and wildlife habitat and are not used as the basis for securing rights for protection of the ecosystem and other interests such as recreation, water quality, the social integrity of rural communities, or the future economic well-being of a region. In some cases the scope of instream flow statutes is limited by administrative practice, though not by statutory language. Colorado's statute, for example, allows appropriations of only enough water “to preserve the natural environment to a reasonable degree.” The board that holds the rights has so far chosen to interpret the law as allowing it to appropriate only

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

enough water for the minimum needs of cold-water fish. Thus it has not sought rights for protection of water quality, riparian vegetation, wetlands, or recreation.

Water Salvage Laws

Because water is so scarce in the West, all intentional and nonintentional uses of water that prohibit reuse merit careful attention. For instance, water lost to antiquated conveyance facilities and inefficient irrigation practices can be conserved. The technology exists to improve these systems, but improvements usually require a substantial investment. The costs of modern sprinkler or drip irrigation systems, concrete ditch lining, laser leveling of fields, and other water-saving improvements can be high in relation to the low profits in much of western agriculture. If the water saved could be put to use by the farmer or sold to others to use, it might justify greater investments in water-saving technology. Under the laws of many western states, however, any water salvaged in this way “belongs to the stream,” not to the person who saved it. (See Salt River Water Users' Association v. Kovacovich, 1966.) That is, the salvaged water can be used by others downstream.

As a simple illustration, consider a farmer with a water right to 1,000 acre-feet (1,230 megaliters (ML)) of water who historically consumed 800 acre-feet (990 ML) and returned the other 200 acre-feet (250 ML) to the stream. By piping the water instead of conveying it in an open ditch, where it can evaporate and seep into a marsh, the farmer can salvage 200 acre-feet (250 ML) of water that was formerly “consumed” by evaporation and unrecoverable seepage. If the salvaged water can be used on a new field by the farmer or sold to a city, it could be worth the cost of investing in the pipe. Without legal assurance of the benefits of the water salvage investment, the farmer has no incentive to change, and less water will be available to others.

California and Oregon have passed laws to encourage water salvage; these generally award title of the salvaged water to the saver. The laws are intended to provide an incentive to water users who reduce the amount of water consumed by undertaking on-site conservation practices: the salvager can sell the water saved to others. Such transfers help to finance conservation improvements and may enable more users to benefit from the same overall quantity of water.

The most celebrated example of water salvage resulting in transferable water is the Metropolitan Water District-Imperial Irrigation District (MWD-IID) transaction in California. (See the Imperial Valley case study, Chapter 11.) The MWD agreed to invest more than

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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Examples of Water-Saving Legislation

Given the history of western water law, incentives will be necessary to induce water conservation. To date, most transfer incentives are negative and involve fear of losing the right by judicial or administrative action. Several states have recently created positive incentives that seek both to encourage water conservation and to recapture some of the same water for public uses. For example, Oregon has enacted an innovative water conservation plan that splits the benefits of conservation between the saver and the state. If the state approves a conservation plan as feasible, effective, protective of junior rights, and consistent with the public interest, the saver is entitled to the saved water, but the state may allocate 25 percent of the water to itself for instream flow maintenance and other environmental uses (Oregon Revised Statutes 537.470). The legislation raises taking issues, but the argument has been considered and rejected (Sax, 1990).

California has had a water salvage law since the early 1980s. Washington State enacted a similar statute in 1989 and broadened it in 1990. The Saved Water Act (Revised Code Washington 90:38.005-902) applies only to the Yakima basin. Net water savings may be voluntarily transferred to the state's Department of Ecology in trust for instream or irrigation uses. The purpose of the act is to reallocate water for fishery maintenance in the Yakima River, but the act has not been implemented.

$100 million in lining irrigation canals and other projects to salvage water within IID. In return, MWD received the right to use the water saved, some 106,000 acre-feet (130,000 ML) per year, for 35 years. This case illustrates the kind of water salvage transactions that may be possible throughout the West, although its large scale is probably unique. It is also important because, while California had a salvage statute, no special statutory authority was necessary for the transaction to take place.

The purpose of water salvage laws is surely salutary, but fuller use of water from a stream can have negative environmental consequences, especially when large-scale water salvage becomes a major supply augmentation strategy. Streamflows may be depleted, wetlands may dry up, and water quality may degrade as return flows and seepage are reduced. In recognition of this fact, Oregon included in its law a requirement that a salvager must dedicate 25 percent

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

of the water salvaged back to the state to remain in the stream. The MWD-IID trade is an example of a situation in which confronting the environmental consequences has been deferred. Although the Salton Sea is already increasing in salinity, the MWD-IID transfer could accelerate that trend, harming fish and wildlife. Economies supported by the sea may be altered. The environmental issues, however, have not yet been fully addressed because the transfer does not immediately change the fate of the sea.

OTHER STATE LAWS

Besides provisions in water allocation laws that relate to transfers, states have a number of other laws that can affect whether and under what conditions water transfers may be made.

Water Quality

Although all states have water quality protection laws and programs, few of these can be used to restrict transfers in any way. The law of water rights is almost exclusively concerned with quantity, not quality. It is difficult to integrate quantity and quality considerations because of the way in which these separate water use regimes operate. The failure to integrate these two doctrines results in water quality effects that can no longer be ignored.

Generally, water quality is protected by federal law administered by the states. Point source discharges require permits that limit the amounts of particular pollutants by incorporating federally set standards and other limitations as necessary to protect the quality of the receiving stream. This regulatory scheme, targeting point sources of pollution through a permit process, essentially ignores degradation of water quality that results from other causes such as depletion and nonpoint sources of pollution.

Plainly, water quality can be affected dramatically by pollutants from other than point source discharges. The Clean Water Act defines point sources as not including irrigation return flows, yet these are capable of loading considerable sediment, agricultural chemicals, and naturally occurring trace elements into the West's waters. Following the spirit of the law, the courts generally have found that releases from reservoirs are not point source discharges, even though they may greatly alter the temperature and chemical content of water. Throughout the West, water is degraded in quality simply by being used, whether or not pollutants are added. Removing water from a stream reduces its dilutive capacity; storing it in a reservoir changes its temperature and chemical content; return flows from

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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Water Quality Effects of Water Use

The law of water rights deals almost exclusively with quantity, not quality. Yet in nature, quality and quantity cannot be so easily separated. Diversions and ground water pumping can affect the quality of streams and aquifers by increasing the concentration of contaminants. For example, diversion for irrigation from the Colorado River and its tributaries affects not only the amount remaining downstream but especially its salt content. An interstate compact allocated rights to use water, but later, when quality issues became severe, separate legislation was necessary to address salinity. A treaty with Mexico protected a share of water but not its quality, so that another agreement was needed to deal with the salinity of the Colorado River. In the San Joaquin Valley of California, water quality issues are by far the most challenging of the water issues even if the current drought also stresses the resource in terms of quantity. Transfers of water could alleviate some of the drainage disposal problems; they also, in some circumstances, could adversely affect the ability of streams to absorb drainage discharges.

It can be difficult to integrate quantity and quality considerations because of the ways in which these aspects of water use are regulated. Prior appropriation, in theory, allocates the yearly flow of a stream until it is dry. Water quality is protected through the Clean Water Act, a federal law administered by the states. Point source discharges must obtain discharge permits that conform to federal discharge and water quality standards. Nonpoint source discharges, which include irrigation return flows, are subject to state programs that seek to induce the adoption of best management practices, thus far largely ineffectual.

The problem is further complicated because effluent can be a resource as well as a contaminant. The technology-forcing focus of the federal Clean Water Act seeks to reduce all effluent discharges, and this reduces available supplies of water that are in fact suitable for irrigation in many cases. In contrast, diversions and water use apart from any discharges may increase contamination as pollutant concentrations increase.

The lack of integration of water quality and water allocation goals thus sometimes allows transfers that ignore water quality effects. Existing procedures do not provide a way to protect third party interests in water quality except if the transfer results in harm to third party water rights holders.

When water quality enters into the equation for water allocation decisions, it is generally through public interest considerations. For historical reasons, there are rights in water quantities or flow rates, with quality considerations secondarily applied through regulation of discharges. In a physical or economic context, it would be more rational if quantity and quality attributes were equal partners in the determination of a right, as they must be in the assessment of value (Getches et al., 1991).

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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its temperature and chemical content; return flows from any use are changed in quality. There are almost no laws to restrict the quantity or manner of use of water, even when it causes a deterioration in quality. In addition, where water quality laws are in potential conflict with an unfettered right to appropriate water, state laws often mandate that the right to use water shall take precedence over protection of quality (Getches et al., 1991).

The potential water quality effects of transfers are considered in a few states as a part of the public interest review process, but this process may be ineffective because the states typically separate their administration of water allocation and water quality. The permitting process for a transfer or change of use remains a largely unexercised opportunity for pursuing those goals, one that could help to ensure that other users of the stream and the public generally are not harmed by the proposed transfer.

Land Use

The effects of transporting water or transferring a water right could be considered under the existing authority of most state land use planning laws or in the context of local zoning authority. Rarely do state or local governments use the occasion to delve into the consequences of transfers that furnish water for a new subdivision, that require a water diversion facility or pipelines, or that result in the retirement of irrigated farmland. These effects are not considered because normally “water planning” is off limits to land use planners.

Arizona, however, restricts new development in areas of severe ground water overdraft unless the developer can demonstrate a 100-year “assured water supply.” In Colorado the consequences of water development can be considered under local government land use authority. Colorado leaves virtually all land use decisions to counties. The counties have specific authority to regulate several development activities if they determine them to be “areas of state concern.” One of these potential areas is the construction of water pipelines and facilities. Recognizing that major transbasin diversions can have significant effects on their environment, lifestyle, and economic future, some counties in western Colorado have declared water facility construction to be an area of state concern subject to county permitting. Using this authority, they have held extensive hearings to assess the effects of proposed water projects. For example, Eagle County denied a permit sought by Colorado Springs and Aurora to construct facilities that would dewater a large wilderness area in the tourism-dependent county. (See Chapter 6.)

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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Environmental Impact

California and Washington have laws requiring the assessment of impacts of major developments, and these can be applied to water rights. For instance, the California Environmental Quality Act requires the preparation of an environmental impact report (EIR) for any proposed major project. The EIR is to enable decisionmakers to balance project benefits against environmental and other costs. The statutory requirement applies to any major water use application, including a transfer.

Soil Conservation

One of the problems of drying up agricultural land is the loss of topsoil through erosion by natural forces. Several counties in the West have enacted ordinances prohibiting blowing dust. These laws operate against landowners. Where land is dried up to transfer the water to municipal uses, the city may be responsible for the blowing dust offense if it purchases both land and water, and the farmer may be responsible if the city purchases only the water. For instance, Arizona state law attempts to cope with this problem by requiring farmland retired from irrigation to be maintained free of weeds and dust.

Properly drafted and enforced state or local laws designed to protect soils could encourage transactions with less destructive effects. Although these laws would not regulate transfers directly, they could be a disincentive to sales that leave farmland abandoned. Faced with required stewardship over the land, the parties may decide on temporary transfers, limited to dry years, or transfers of part rather than all of the water rights, or they may seek other ways either to keep the land in cultivation or to rehabilitate it for other uses.

FEDERAL RECLAMATION LAW

As noted in Chapter 1, the federal government has the potential to shape the future of western water allocation because it stores and delivers large quantities of the region's water. However, as many of the guests who spoke to the committee observed, the federal government's role at the present time is largely passive. This may seem ironic in light of the great influence the Bureau of Reclamation, together with the U.S. Army Corps of Engineers, has exerted in shaping the landscape and economy of the modern West. Through most of the history of development in the West, there has been great ten-

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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sion between the application of state laws and the application of federal laws to the allocation of the West's water. On the one hand, the supremacy of federal over state law is written into the U.S. Constitution. On the other, allocation of water in the western states, as elsewhere in the Union, is generally a state prerogative because of a long history of the minimal assertion of federal powers and interests. Despite its great constitutional power to control resources, the federal government has chosen to defer to state water allocation decisions unless a clear federal policy was at stake. Today, neither the Bureau of Reclamation nor the Corps of Engineers is trying to advance a clear congressional or administrative mandate other than to fulfill statutory project objectives and honor beneficiary obligations. Rather, these agencies are just beginning the long process of redefining their missions in light of modern needs and values.

When Congress created the Bureau of Reclamation in 1902 and authorized construction of large federal water projects throughout the West, it attempted to resolve the conflict between state prerogative and federal supremacy by declaring in Section 8 of the Reclamation Act that

[N]othing in this Act shall be construed as affecting or intending to affect or to in any way interfere with the laws of any States or Territory relating to the control, appropriation, use or distribution of water used in irrigation, or any vested rights acquired thereunder and the Secretary of the Interior, in carrying out the provisions of this Act, shall proceed in conformity with such laws. . . .

For nearly half a century, as the Bureau of Reclamation built projects in the various states, Section 8 and the federal-state law dichotomy generated little controversy. The states were glad to have the federal projects and through political means had substantial input into the distribution of their benefits and costs. By the mid-1950s, however, significant controversies arose, and, in a series of decisions involving the Friant Unit of the Central Valley Project, the U.S. Supreme Court extended the reach of federal law and federal bureaucratic discretion in the face of challenges grounded in allegedly contradictory state law. This legal trend, however, came to an abrupt halt in 1978 in United States v. California. Without quite overruling its earlier cases, the U.S. Supreme Court upheld California's authority to regulate the operation of a federal project to ensure environmental protection objectives. In that case, involving the operation of the New Melones Dam and Reservoir, state regulation was approved, subject only to the caveat that it not be inconsistent with a “specific congressional directive.”

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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Arguably, therefore, if a water user with a contractual right to receive water from the Bureau of Reclamation seeks to transfer that right to another, the transfer would be subject basically to state law (Roos-Collins, 1987). Thus it would be allowed, given approval under the laws of the state, unless it were found to be inconsistent with a specific congressional directive. In practice, however, determining what are the relevant specific congressional directives may be a daunting task not only for federal administrators in the U.S. Department of the Interior (DOI) and the Bureau of Reclamation, but also for potential reviewing courts when controversies erupt. The resulting legal uncertainty has in turn meant that, despite the courts' apparent tilt toward the primacy of state law prerogatives in managing federal projects, federal project managers still have broad discretion in determining whether to approve transfers of water under their physical control (Willey and Graff, 1988).

After lengthy internal review, on December 16, 1988, DOI itself sought to place bounds on the exercise of this discretion by issuing a document entitled “Principles Governing Voluntary Water Transactions That Involve or Affect Facilities Owned or Operated by the Department of the Interior.” Responding to an expectation that DOI would increasingly be asked to approve or facilitate voluntary water transactions and to the support for water transfers expressed by the Western Governors ' Association (July 7, 1987, and July 12, 1988, resolutions in Western Governors' Association Water Efficiency Task Force (1986) and Western Governors' Association Water Efficiency Working Group (1987), respectively), the principles for the first time enunciated a formal departmental policy in support of voluntary water transfers. For example, “DOI 's role will be to facilitate transactions that are in accordance with applicable state and federal law and are proposed by others, ” and “DOI will refrain from burdening [such] transaction(s) with additional fees, costs or charges. . . . ” On the other hand, DOI's policy recognized, as have many others, that support for voluntary water transfers cannot and should not be unqualified. The seven principles are replete with qualifications addressing, among other concerns, third party effects, federal contractual and financial interests, and environmental impacts. The DOI policy also generally is deferential to the primacy of state law and water management. It takes the position that in most circumstances DOI should pursue a reactive, rather than proactive, posture regarding specific potential voluntary water transactions.

A document providing further “criteria and guidance” explicating the December 16, 1988, policy was issued for the use of the regional directors by the Commissioner of Reclamation on March 16,

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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1989. Again recognizing the difficulties caused by overgeneralizations in setting western water transfer policy, the document provides additional instructions for DOI personnel as to how they should approach potential transactions. Notably, it acknowledges that some transfers may require new federal authorizing legislation, that others face protracted and costly legal procedures, and that there may be problems under the Reclamation Reform Act of 1982. Remarkably it does not address a key emerging problem: What should DOI policy be when contracts come up for renewal and all, or more likely some, of the water under contract has been transferred? The document does confirm, however, that DOI will not create a disincentive to transfers by charging the participants to a transaction for “any profit that might be envisioned as the difference between appropriate costs and the market value of the water.”

Taken as a whole, the principles, criteria, and guidance place DOI in a posture of measured support for voluntary water marketing. Marketing enthusiasts can take solace from the fact that a formal supportive policy finally emerged from DOI after much internal struggle and reported external pressure. Marketing skeptics, on the other hand, will find relatively little in the policy to criticize. Some may oppose granting federally subsidized water users the right to sell that water at a profit. Others may question DOI's commitment to mediate the adverse environmental impacts of marketing transactions. Still others may prefer that DOI not encourage water marketing at all. For the most part, however, the DOI policy retains sufficient ambiguity and DOI personnel retain sufficient discretion that substantial variability in future departmental treatment of proposed transactions is likely (Wahl, 1989). More transactions probably will be facilitated than would have been without the principles, criteria, and guidance, but the DOI policy by no means provides clear sailing for western water transfers involving federal facilities or federal water rights.

Congress has not yet spoken in generic terms on the law of federal water transfers. Although transfers have been an integral part of recent legislation settling the water rights of various Indian tribes — and, in 1990, protection of the interest of a federal wildlife refuge (see Chapter 5)—Congress has not yet put its imprimatur on any general statement of law either approving or limiting federal water transfers. Given the federal financial interest in the projects it has funded and the national interest in the environment and in the well-being of Indian tribes toward which the nation has a trust obligation, this inaction is difficult to justify. No doubt, however, a full-scale congressional debate on these issues would expose a variety of points

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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of view and pose significant problems for the sponsors of comprehensive water transfer legislation.

FEDERAL ENVIRONMENTAL LAWS

Much of the federal interest relevant to water transfers is asserted indirectly through federal environmental laws. The National Environmental Policy Act requires that an environmental impact statement be prepared anytime a federal action significantly affects the environment. This requirement is most likely to involve the Bureau of Reclamation in the operation of one of its projects, but it may also involve the Bureau of Land Management, the National Park Service, or other federal entities when federal lands are involved.

Where wetlands are implicated, Section 404 of the Clean Water Act may come into play. This provision requires that a comprehensive public interest review be conducted by the U.S. Army Corps of Engineers. The U.S. Environmental Protection Agency also retains the power to veto a Corps of Engineers approval of a project affecting wetlands, a power that it exercised to halt the Two Forks Dam project in Colorado and that it conceivably could use in a water transfer situation not only to prevent or mitigate a loss of wetlands but also to fulfill various objectives under an expansive notion of the public interest.

The Endangered Species Act is another federal statute that may affect proposed water transfers in the West. As understanding of the broad range of environmental impacts caused by existing projects on the streams of the West has increased, concern for the protection of native species and their habitat has mounted. Federal agencies must consult with the U.S. Fish and Wildlife Service to determine the effects of a project on endangered species habitat and are flatly prohibited from proceeding with any project that would jeopardize the survival of a listed species or its habitat. This prohibition may restrict the ability of water users to divert water from streams. Even in large basins such as the Snake-Columbia, the Colorado, the Sacramento, and the San Joaquin, endangered species protection may become a binding constraint not only on new development proposals but also on proposed water transfers that otherwise would make water management in the basins more efficient.

The challenge for federal water managers, as well as for federal wildlife managers and environmental regulators, will be to find methods for improving environmental conditions even as water is being transferred among consumptive users. The case studies in Chapter 5 and Chapter 8 examine several situations in which this has been done or is being

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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attempted. The first step is to accord formerly excluded values such as environmental quality equal or increased weight relative to traditional uses of water and to create processes that involve a wide range of interested parties in making the trade-offs among these values.

One basin-specific model for resolving resource conflicts is the Northwest Power Planning and Conservation Act of 1980. The act was passed to aid in the development of hydroelectric power in the Columbia River basin and “to protect, mitigate and enhance the fish and wildlife habitat of the Columbia River and its tributaries” (16 U.S.C. §839). The Columbia River basin covers an area larger than France, draining parts of seven states and British Columbia. The act establishes a council broadly representative of federal, state, and tribal interests in the region that oversees related basin development and conservation activities. The council was given responsibility to develop a power plan and a fish and wildlife program to protect, mitigate, and enhance fish and wildlife affected by the development and operation of hydroelectric facilities while ensuring efficient and reliable power supplies. The council, which is charged to encourage broad public involvement, serves as a regional forum, outside the courts, for disparate interests to reach agreement on resource use decisions. Over the past 10 years, the council has helped establish facilities to help migrating fish pass dams on the mainstream of the Columbia and Snake rivers, encouraged conservation programs for utilities that have resulted in substantial cost savings, and generally provided regional leadership on power planning. Although this mode of activity faces significant future challenges—especially related to salmon runs—it appears overall to be an effective mechanism for improving resource decisionmaking.

FEDERAL AND INDIAN RESERVED RIGHTS

Until the 1970s, much of the tension between federal and state water allocation centered on the proprietary claims of the federal government —which in effect could trump state-created rights. Federal water rights can be claimed for Indian tribes and certain reserved public lands. Of the two, Indian water rights are potentially the most disruptive.

The Winters Doctrine

When Indian reservation lands were set aside by treaty, statute, or executive order, the reservation included sufficient water to fulfill the purposes of reserving the lands. The U.S. Supreme Court ruled

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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in the 1908 case of United States v. Winters that the reservation of land implies a reservation of water even though the document establishing it is silent as to water; otherwise the purpose of providing a permanent homeland for the tribe could not be accomplished.

Application to Federal Lands

Much later, the U.S. Supreme Court held that the same reservation of water rights that attends reservations of Indian lands attends the reservation of federal lands for purposes such as national parks, forests, wildlife refuges, and military bases. The quantity reserved in each case is determined by looking at the basic legislation creating the land system and the legislation setting aside the particular tract. Because of the nature of federal resource protection systems (wild and scenic rivers, parks, and so on), most reserved rights are likely to be used to maintain instream flows rather than for consumptive uses. Of course, military bases, oil shale reserves, and visitor centers or campgrounds in parks can claim water for consumption.

Priority of Reserved Rights

Where federal (or Indian) rights exist, they are incorporated in the hierarchy of rights in the state system according to priority. They are not, however, lost when they are not used. The priority date is the date when the reservation was set aside, not when water was first used on the reserved land. Reserved rights must be respected whenever transfers are made by private parties; reserved rights are protected from harmful transfers by the no injury rule just like other rights in the appropriation system.

Quantification of Reserved Rights

Federal law makes the existence and quantity of reserved rights subject to adjudication in state courts. The quantity is determined by the court's determination of how much water is needed to fulfill the reservation's purpose. These purposes are usually found by examining the words, circumstances, and intent on both sides of the treaties and agreements setting up the reservation. The quantity to which a tribe is entitled can also be determined through negotiations. Several tribes are negotiating with states and local water users to set the amounts of water to which they are entitled. Settlements in Colorado, California, Montana, Nevada, Idaho, Arizona, and elsewhere have been cemented by agreements approved by the courts or Con-

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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gress. Whether litigated or negotiated, the resulting quantity of the right becomes part of the overall hierarchy of rights of all water users on the particular stream.

As defined by the state's appropriation system, the U.S. Supreme Court found that where a purpose of an Indian reservation is to encourage Indian agriculture, rights to accomplish that purpose are to be determined on the basis of the amount of practicably irrigable acreage within the reservation. This formula was applied by the Wyoming Supreme Court in the Big Horn adjudication of the rights of the Wind River Reservation tribes. Once they are quantified, however, Indian reserved rights may be put to any beneficial use. Thus rights quantified on the basis of the amount of practicably irrigable acreage within a reservation can be applied to mining, municipal uses, irrigating a resort's golf course, or even maintaining instream flows for a fishery. Other methods of quantification may be used where the purposes of the reservation were different (e.g., to maintain a fishery or to establish “a permanent home and abiding place”). Because agriculture and most other purposes for which reservations were established demand large quantities of water, Indian tribes can claim rights to a significant share of the water in many western rivers. The future viability of reservations as tribal homelands depends on what use is made of this water. For many tribes, water is essential to economic and cultural survival. Throughout the West, the entitlement to water under the Winters doctrine is being translated into quantified rights and into actual supplies available for use on reservations. In the meantime, non-Indian water users are using water supplies allocated to them under state water laws that may eventually be judged to be tribal water.

Transferability of Indian Reserved Rights

Agriculture and fishing depend on adequate supplies of water. But some tribes are not traditionally farmers or fishers and are located where such enterprises are futile or at least uneconomical. Others need some water but could gain from leasing a portion of the water to which they have rights to non-Indians. Thus several Indian tribes believe that the most productive and profitable uses of their reserved water rights are off the reservation. Marketing water is one way to use their reservation resources to become self-sustaining. Indians thus may seek to market their water rather than use it for capital-intensive, low-profit agriculture. This practice is also encouraged by non-Indians in some cases because they have become dependent on using undeveloped Indian water. If the tribes begin using water on

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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their reservations, it could disrupt established non-Indian economies or at least require them to seek new water sources.

Despite the possible mutual benefits of many transfers of Indian water to off-reservation uses, objections are raised from time to time on both sides. Some Indians fear that conveyance of the right to use their water will limit future use of reservation lands and constrain their opportunities for cultural survival or economic growth. The fear is not without substance and argues for careful, well-informed tribal decisions.

Non-Indians sometimes object that transfers of Indian rights could result in tribes' charging for the continuation of a supply that non-Indians are now getting for free. As long as the Indians lack capital to develop the water that is nominally theirs under reserved rights— funds for irrigation systems, storage reservoirs, and the like—the water is available to non-Indians. Some objections to proposals for compensated transfers are based on the argument that Indian rights can be used only on the reservation and any transaction that provided for off-reservation use would be unlawful as inconsistent with the purpose of the reservation. Of course, anytime Congress approves a transaction, it should moot the question of whether off-reservation use is permissible.

The legal power of tribes to transfer water off the reservation remains unresolved in the courts, and Congress has chosen to deal with the issue in an ad hoc manner. Congress has approved a number of transfers of the right to use Indian water off the reservation in recent years in the context of negotiated settlements of Indian reserved water rights claims with states and non-Indian water users. Nearly all these settlements included provisions for limited marketing of Indian water. Early in the nation's history, Congress passed the Nonintercourse Act, making property transactions with Indians unlawful unless the United States approves or is a party. The act was intended to protect the tribes' perpetual rights in their lands. It also preserves the federal government's prerogative, exclusive of other nations and of the states or private parties, to extinguish Indian title to property when transactions occur and to regulate trading with Indians, a prerogative expressed in the commerce clause of the Constitution. It provides an opportunity for Congress to exercise what has been described in a number of Supreme Court decisions as a fiduciary relationship toward the Indians. Thus the United States oversees these transactions as a trustee for the tribes. The federal role in Indian property transactions and trade does not imply cutting off the tribes from commerce with neighboring economies. Indeed, reservations may depend on access to non-Indian markets for farm

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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goods, minerals, and industrial products. But the fact that Indian property is held in trust by the government does affect the legal requirements for transferring Indian lands and interests in land, including water. The full reach of the Nonintercourse Act has not been determined.

At this point, transfers of rights to use Indian water by lease, sale of a quantity of water, or agreement of a tribe to defer using water so that it is available to others may not be secure without congressional approval. Many experts have urged legislation generally authorizing the lease of Indian reserved water rights to non-Indians. Congress has not, however, enacted such a statute. One possible enactment would be to allow tribes to lease water rights in a manner comparable to the leasing of reservation lands, which may be done under a statute requiring the approval of the Secretary of the Interior. If Congress passes such a law, it should include a process for reviewing the potential effects of such transactions on the reservation culture, economy, and ecology. It should be noted that (1) if the courts were to hold that Indian reserved rights cannot be transferred off reservation under existing reserved rights and (2) if a given transfer would adversely affect other holders of water rights, then (3) it presents a serious constitutional question whether Congress could grant the right to make such transfers in the absence of compensation to the losers.

SPECIAL DISTRICT LAWS AND STATE LAW RESTRAINTS

There are literally dozens of types of entities that develop and distribute water to individual water users. The earliest North American examples are the acequias, the community ditch organizations of the Southwest that are rooted in ancient Spanish custom. Many still operate in northern New Mexico, where they not only perform water distribution functions but also are often at the center of community life. Private entities that distribute water include mutual water companies and irrigation companies. In a mutual water company, rights are owned by the individuals who make up the company. Other companies hold rights directly, with the ownership interests of rights to use water evidenced by shares of stock. Although every type of water rights holding entity has a potential role in water transfers, the largest and most influential types of public entities that exercise water rights in the West are irrigation and conservancy districts.

About a thousand entities known by a variety of names—irrigation districts, conservancy districts, water authorities, and the like— supply a large measure of the water in the West, most of it to agriculture. About one-third of all irrigated land is served by these districts,

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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but a much larger percentage of western water is under their control. In many cases, they manage federally financed projects and distribute the water from those projects to district members. The water rights held by a district belong to the district itself; members or residents of the district have contractual rights to use water.

Districts have considerable promise for participating in and improving water transfer activities. Some districts have programs that move water freely within their boundaries according to the annual and seasonal needs of farmers and others, including municipal users. A well-known example is the Northern Colorado Water Conservancy District, which maintains a robust market, annually trading contractual rights to use district water among district members. (See Chapter 6.)

The ability of special districts to transfer water often is constrained by state law. Many districts cannot transfer water beyond their own boundaries. In the Colorado Front Range, for example, the Northern Colorado Water Conservancy District holds far more water than it can use in the foreseeable future. As taxpayers, district residents must repay the high costs of developing the water, but the district and its member entities (irrigation companies and municipalities) are prohibited from selling it to growing municipalities surrounding the district who need water now. These water-short communities must then seek water from costly and sometimes controversial distant sources, such as transbasin diversions or expensive and environmentally questionable facilities like Two Forks Dam. Meanwhile, the district has sought ways to attract municipal growth to provide an in-district market for water. But seeking growth brings the district into conflict with some established municipalities within it, which have land use policies favoring slow growth to maintain the quality of life.

Some states are addressing the tensions created by restrictions on out-of-district transfers by lessening or eliminating the restrictions. Colorado has authorized conservancy districts to lease water for use outside their boundaries, and Utah has removed all restrictions on transfers out of districts. With the lifting of transfer restrictions, water may move more freely to other areas, but there is no assurance that interests other than those of water consumers will be considered. Although absolute restrictions on district transfers err on the side of inhibiting beneficial transactions, there are sound reasons to examine carefully the consequences of removing water from one area and exporting it to another when public as well as private interests are at stake.

Given the large amount of water controlled by special districts, it is important that state law address the question of what entity or

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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process should decide when, how much, and on what conditions water should move from one region to another. In Arizona, all transfers out of districts or watersheds where districts develop their water, even water not subject to district water rights, are subject to the veto of affected irrigation districts, agricultural improvement districts, and water users' associations. Yet these entities are charged with narrow purposes and were never intended to represent the social, economic, and ecological interests of a region. Often their governing boards are neither elected nor appointed in a politically responsive process. Decisionmaking on these matters would seem more appropriate at the county, regional, or state level. Nevada requires that review and comments be sought from county commissioners when a transfer that will remove water from the county is proposed, but recommendations are not binding on state administrative officials. The state public interest review statutes that exist in most western states are a potential, but largely unused, means for considering public issues surrounding water transfers from special districts.

Districts are charged with responsibilities broader than the traditional functions of water development, conveyance, and storage, such as playing a role in conserving water and in preserving water quality. In some states, districts are assuming responsibilities for protecting public interests besides water supply. In Colorado, conservancy districts can administer programs to control nonpoint source pollution. Unless districts are given broader responsibilities than simply ensuring water supply, they cannot be expected to exercise their potential powers over transfers to accomplish other goals.

OPTIONS FOR IMPROVING WATER LAW AND POLICY

Public Interest Review Processes

Even though all but one western state use some type of public interest review process in water decisions, all could improve their manner of reviewing the effects of water transfers. This is particularly true in state processes that concentrate the public interest review on new appropriations and give little attention to transfers. Most states lack clear standards for defining the public interest to be protected. Many of the social, economic, and ecological interests that are affected by moving water from one use or region to another are not included. Once the elements that constitute the public interest are identified, decisionmakers need state policy guidance to resolve conflicts among competing interests. Comprehensive water planning can serve to articulate both the elements of public interest and the state policies relating to them.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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Public participation in review processes is essential in identifying the range of interests affected by a proposed transfer. Procedures vary widely from state to state, but most western states provide opportunities for people representing all the elements of the public interest as defined by state law to be heard. A few states, including Montana and Utah, still limit participation in transfer proceedings to those who hold water rights.

Impact Assessment

The National Environmental Policy Act requires the assessment of potential environmental impacts when major projects are undertaken. It applies to any proposal requiring federal approval or license or the use of federal facilities. A few western states, including California and Washington, have adopted laws establishing a parallel set of environmental review requirements for state-permitted or state-sponsored projects. State or federal laws requiring assessment of impacts are important devices for evaluating the effects of a proposed water transfer. The information is valuable in a fair and comprehensive public interest review. States lacking impact assessment programs could fill a significant gap in water decisionmaking by enacting such laws.

Comprehensive Planning

Most western states have some type of water plan. Few, however, have comprehensive planning processes that articulate established water policies in the context of issues that are likely to arise in transfer proposals. The policies and standards developed through comprehensive policy planning can inform the process for public interest review as well as processes for issuance of water rights permits and the development of projects. Planning processes that are essentially dynamic policy development programs exist in Kansas, Montana, and Oregon.

Plans can cover the panoply of values and interests that are affected by water development, transfer, and use. They can discuss the relative importance to the state of water-related values and their impacts on rural communities, fisheries, wetlands, recreation, drinking water, and flood control. They can be designed as guidance documents for water rights holders and decisionmakers in transfers as well as other major water decisions, such as new appropriations, development projects, water quality standard setting, and instream flow protection programs. Thus predictability can be enhanced, costs minimized, and the full range of effects of transfers anticipated in a comprehensive state planning process.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

Facilitating Third Party Participation in the Water Transfer Process

State and tribal governments that make the rules regarding who may participate in the water transfer review process can go to varying degrees of effort to facilitate third party participation. An essential follow-up to decisions regarding which interests should be allowed to influence the process involves determining the appropriate degree of influence and considering how their participation can be made more effective. Government efforts to facilitate third party participation can include the following elements:

  1. Permission to be present and speak. The opportunity for public interest groups to be present at hearings and to state their opinions is implied in state laws that list various factors a state official or agency may consider in reviewing a proposed change in water rights—recreation, local economics, fish and wildlife, and so on.

  2. Legal ability to influence transfer conditions and to delay transfer approval. Without some bargaining power a third party interest cannot effectively influence the outcome of a transfer review process. Third parties' objections “count” when they can delay transfer approval, influence transfer conditions, or make the process more costly for transfer proponents. Transfer proponents then have an incentive to negotiate with third parties and seek to accommodate their interests. Other water rights holders clearly have such bargaining power under the no injury rule common to the western states. Third parties who do not hold water rights depend on general environmental and other regulatory statues to give them standing to object to transfers.

  3. Designated representation. A government agency can be assigned the task of representing an interest. For instance, some state game and fish departments have been assigned some responsibilities for assessing transfer impacts on instream flows. However, if the interest may be represented only by a specific government unit, this can effectively limit participation on behalf of that interest. Environmental groups may be especially effective representatives in a discussion of the environmental impacts of a proposed transfer.

  4. Financial and legal assistance. Economically disadvantaged third parties may need financial assistance to conduct investigations, to collect evidence regarding transfer impacts, and to hire attorneys or other experts. For instance, the federal government, in the context of its trust responsibilities to tribes, provides financial and legal assistance to tribes involved in litigation and

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

negotiation over water issues that affect tribal interests. Some state water agencies take an active role in preparing assessments regarding transfer impacts on other water rights, and this role could be extended to other third party impacts.

Broader third party participation, at any of the levels described, will increase state and tribal government costs of reviewing proposed transfers, as well as transaction costs incurred by transfer applicants. States and tribes need to arrive at a balance between these increased costs and the benefits of broader and more effective third party representation. The federal government will also have to strike such a balance when specific policies and criteria are drafted for reviewing proposed transfers of federal project water.

Judicial Public Trust Doctrine

The public trust doctrine allows a court to reallocate vested water rights to protect trust values, which now include environmental protection. As applied, it prevents the allocation or transfer of water without adequate consideration of the consequences. It recognizes that water is, at base, a public resource and that private interests in it should further, not impair, public benefits from the use of water.

The doctrine has its origins in civil and common law doctrines that recognize public servitudes (rights of passage) in tidal navigable waters and state ownership of the beds underlying navigable waters. In the nineteenth century the doctrine was expanded to place outside limits on the widespread practice of state grants of submerged lands so that they could be filled in. California has a long tradition of aggressive use of the trust to subject submerged lands granted by the state to private individuals to public rights of passage. These rights include commercial navigation, recreational use, and environmental protection. In 1983 the California Supreme Court applied the public trust to a lawsuit to curtail Los Angeles' appropriations from streams that fed Mono Lake (National Research Council, 1987) to preserve the lake's fragile ecosystem. National Audubon Society v. Superior Court (1983) held that the vested water rights of the city of Los Angeles could be retroactively limited to support trust values that were not adequately considered some 40 years earlier when the city obtained its rights. The doctrine has been accepted in more limited contexts in other state courts and widely studied throughout the West as a vehicle for judicial reallocation, but its forceful application is confined largely to California.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

The committee believes that the values the public trust doctrine seeks to protect are best accommodated in comprehensive water planning processes and through public interest review of new appropriations and transfers. Rather than a technique or option for dealing with the effects of transfers, the public trust doctrine should be seen as a remedial device available to the public when there has been a failure of the system to protect the public interest. The doctrine applies ad hoc and lacks precise standards to judge how water should be allocated and used by competing users. No after-the-fact remedy can deal precisely or effectively with resource use and allocation, so the most valuable function of the doctrine is to signal the need for processes to avoid its judicial application (Graff, 1986). The recommendations suggested throughout this report are intended to address all values comprehended by the public trust doctrine and thus avoid the need for its selective application by the courts.

Clean Water Act, Section 404

Almost any water diversion or storage facility involves filling wetlands and may require a Section 404 permit from the U.S. Army Corps of Engineers under the Clean Water Act. Because some type of structure or facility frequently is necessary for a water transfer to occur, there is a potential federal “handle” on transfer projects that opens the possibility of extensive, detailed federal reviews and conditions. Although the limits of Section 404 authority have not yet been defined, the federal government could use the 404 program to regulate the effects of transfers. To date, the federal government has not fully exercised its potential authority under the statute.

Where state policies exist and are not in conflict with federal law, they can be implemented through the federal permitting process. It is the policy of the Corps of Engineers to follow state policy wherever possible. Therefore, to the extent that state law deals with the effects of transfers, it increases the chances that the federal government will not become involved. But in the absence of state policy, the Corps of Engineers and the Environmental Protection Agency will set their own policy for the state in the course of making Section 404 permit decisions.

Ad Hoc Negotiation

Many of the diverse effects of transfers can be dealt with in negotiations between affected parties and the parties to the transfer. This can occur with or without the benefit of laws to prod cooperation,

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

and it can include anyone the parties decide to admit to the process. The Windy Gap Project discussed in Chapter 6 is illustrative. Of course, parties with an arguable legal right under some statute and parties with access to legal mechanisms to delay or increase the costs of a project have the greatest bargaining power in such negotiations.

The fundamental problem with negotiated resolutions that are not required by water transfer laws is that they produce uneven and incomplete results. Some parties will be treated better than others; some may be overlooked. Some transfers will entail high public visibility and political interest to empower affected parties; others will not. A consistent, reasonably predictable approach applicable in all transfers of significant size or impact will be more equitable and will encourage more desirable transfers. This argues for a formal process informed by impact assessments, comprehensive plans, and public interest reviews of particular transfers. Negotiated resolution of the issues in such a setting should be superior to ad hoc negotiations that vary with the political and economic power of the various parties.

Other Legislation

Although the transfer of appropriative water rights has always been possible, it is only recently, in the era of full appropriation of many western streams, that reallocation has become the main source of water for new enterprises. States and their citizens are realizing that voluntary transfers among private parties may affect an array of interests that are not adequately protected by the laws and processes that govern transfers. Western states, the federal government, and water districts all have opportunities and responsibilities to deal with the effects of transfers. The most direct way to do so is through programs of policy planning, impact assessment, and public interest review of projects. In addition, several other laws can deal with the effects of transfers.

State instream flow laws are important for limiting the environmental and economic effects of transfers. The structure and administration of these laws may have to be modified so they can be integrated with transfer laws. Laws that treat instream flow rights like other appropriative water rights (as in Colorado) provide protection against the adverse effects of transfers through the normal operation of state water law and its no injury rule. But these laws can also be used more expansively. At minimum, wider purposes than fishery protection need to be served. Instream flow protection can be addressed by requiring a portion of salvaged water (as in Oregon and Washington) and other water that is the subject of a transfer to be

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
×

dedicated to flow maintenance. This would be an exaction similar to requiring land developers to dedicate land for streets, open space, or schools. Federal project water should be used in ways that are compatible with state instream flow laws, and transfers should be allowed only when these state laws are satisfied. Ultimately, protection of instream flows will depend on the acquisition of senior rights and the use of transfers to shift away from consumptive to instream flow uses.

State water quality protection goals can be furthered in the transfer process if statutes and procedures are clarified to specify that purpose. Stricter controls of point source discharges, without the self-destructive provisions in some state laws that subordinate quality protection to an unfettered right to appropriate water, are needed. Nonpoint source pollution of water use should be examined and checked at the time a right is transferred. And limits can be placed on the quantity and manner of use if they degrade water quality.

Laws allowing and encouraging special water districts to market water beyond their boundaries are generally beneficial. There should be mechanisms, however, for ensuring that public objectives beyond water supply are served by these transfers. Federal legislation consenting to the leasing or other use of Indian reserved water rights outside reservations should include a means of reviewing the impacts on the reservation culture, economy, and ecology.

REFERENCES

Arizona Game and Fish Department v. Arizona State Land Department , 24 Ariz. App. 29, 535 P.2d 621 (1975).

Bonham v. Morgan, 102 Utah 2d, 788 P.2d 497 (1989).

City of El Paso v. Reynolds, 597 F. Supp. 674 (1984).

Crawford, S. 1990. Dancing for water. Journal of the West 32:265-266.

Getches, D., L. MacDonnell, and T. Rice. 1991. Controlling Water Use: The Unfinished Business of Water Quality Protection . Boulder: University of Colorado, Natural Resources Law Center.

Graff, T. 1986. Environmental quality, water marketing and the public trust: Can they coexist? UCLA Journal of Environmental Law and Policy 5:137.

In re Application of Sleeper, No. RA 84-53 (N.M. District Court for Rio Arriba County 1985).

MacDonnell, L. 1990. Transferring water uses in the West. Oklahoma Law Review 43:119.

National Audubon Society v. Superior Court, 189 Cal. Rptr. 346, 658 P.2d 704 (1983).

National Research Council (NRC). 1987. The Mono Basin Ecosystem: Effects of Changing Lake Level. Washington, D.C.: National Academy Press.

Roos-Collins, R. 1987. Voluntary conveyance of the right to receive a water supply from the United States Bureau of Reclamation. Ecology Law Quarterly 13(4):773-878.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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Salt River Water Users' Association v. Kovacovich, 3 Ariz. App. 28, 411 P.2d 201 (1966).

Sax, J. 1990. The Constitution, Property Rights, and the Future of Water Law. Western Water Policy Project. Boulder: University of Colorado School of Law, Natural Resouces Law Center .

Shokal v. Dunn, 109 Idaho State Supreme Court 330, 707 P.2d 441 (1985).

Sporhase v. Nebraska, 458 U.S. 941 (1982).

Tarlock, A. D. 1990. State groundwater sovereignty after Sporhase: The case of the Hueco Bolson. Oklahoma Law Review 43:27-49.

United States v. California, 438 U.S. 645 (1978).

United States v. Winters, 207 U.S. 564 (1908).

Wahl, R. W. 1989. Markets for Federal Water: Subsidies, Property Rights, and the Bureau of Reclamation. Washington, D.C.: Resources for the Future.

Western Governors' Association Water Efficiency Task Force. 1986. B. Driver, ed., Western Water: Tuning the System. Denver: Western Governors' Association.

Western Governors' Association Water Efficiency Working Group. 1987. Water Efficiency: Opportunities for Action. Denver: Western Governors' Association.

Willey, Z., and T. Graff. 1988. Federal water policy in the United States—An agenda for economic and environmental reform. Columbia Journal of Environmental Law 13:325.

Suggested Citation:"3 The Role of Law in the Transfer Process." National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: The National Academies Press. doi: 10.17226/1803.
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The American West faces many challenges, but none is more important than the challenge of managing its water. This book examines the role that water transfers can play in allocating the region's scarce water resources. It focuses on the variety of third parties, including Native Americans, Hispanic communities, rural communities, and the environment, that can sometimes be harmed when water is moved.

The committee presents recommendations to guide states, tribes, and federal agencies toward better regulation. Seven in-depth case studies are presented: Nevada's Carson-Truckee basin, the Colorado Front Range, northern New Mexico, Washington's Yakima River basin, central Arizona, and the Central and Imperial valleys in California.

Water Transfers in the West presents background and current information on factors that have encouraged water transfers, typical types of transfers, and their potential negative effects. The book highlights the benefits that water transfers can bring but notes the need for more third-party representation in the processes used to evaluate planned transfers.

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