Silver v. Pueblo Del Sol Water Co., 384 P.3d 814 (Ariz. Ct. App. 2016) (holding: (i) that the Arizona Department of Water Resources’ (“ADWR”) interpretation of “legal availability” was valid under the statute defining “adequate water supply”; (ii) that ADWR must consider an unquantified federal reserved water right for the purposes of an Adequate Water Supply Designation (“AWSD”); and (iii) that ADWR was not required to separately consider the impact of pumping on a conservation area and the local surface or groundwater).

In 1988, the United States Congress designated roughly thirty-six miles of the San Pedro River basin (“Basin”) as a national conservation area (“Conservation Area”), and simultaneously created a federal reserved water right for the Conservation Area “in a quantity sufficient to fulfill the purpose” of protecting the public lands surrounding the River. The Bureau of Land Management (“BLM”) manages the Conservation Area. Since 1989, the BLM has filed three statements of claim for the Conservation Area covering surface and groundwater.

The General Stream Adjudication for the Gila River System (“Gila Adjudication”), active for approximately 40 years, has exclusive jurisdiction to adjudicate the conflicting claims and water rights for the Basin. BLM federal reserved rights are part of the the Gila Adjudication. The Gila Adjudication will determine whether BLM “has a reserved right to the groundwater ‘where other waters are inadequate to accomplish’” the reservation’s purpose and the minimum amount necessary to achieve that purpose.

Pueblo Del Sol Water Company (Pueblo) is a private water company. Pueblo serves an area five miles from the San Pedro River. In June 2011, Pueblo applied for an AWSD, which would allow it to pump groundwater to a planned community subdivision and other projects. Pueblo’s application included its Certificate of Convenience and Necessity (“CC&N”), a certification provided by the Arizona Corporation Commission to public utilities. Pueblo sent its application to ADWR, the agency that reviews AWSD applications. Ariz. Rev. Stat. § 45—108 requires subdivision developments outside active water management areas to show the existence of an adequate water supply as designated by ADWR. Under ADWR’s regulations, an adequate supply requires continuously legally and physically available water to satisfy the proposed needs for at least one hundred years. BLM objected to the Pueblo’s application, citing failure to properly analyze availability of water under ADWR’s regulations.

ADWR rejected the objection and accepted Pueblo’s application. BLM appealed to the Superior Court of Arizona, which reversed ADWR’s decision. The lower court held that ADWR abused its discretion because ADWR failed to meet its statutory duty to ensure that the water source will be available for at least 100 years. The lower court found that ADWR’s definition of “legal availability” erroneously allowed a decision to be based solely on whether the applicant had a CC&N. ADWR and Pueblo appealed the judgment.

On appeal, the Court of Appeals of Arizona decided three issues: (1) whether ADWR’s interpretation of “legal availability” under the statute defining adequate water supply was valid; (2) whether ADWR should have considered BLM’s unquantified reserved water right in its AWSD determination; (3) and whether ADWR was required to consider the impact of pumping on the Conservation Area and local surface and groundwater.

First, BLM argued that ADWR failed to make a valid determination of legal availability when it accepted Pueblo’s application without initially considering the federal government’s senior, unquantified federal reserved right. The court disagreed with BLM, finding that ADWR’s interpretation of legally available was valid when the statutes and regulations were read together.

Legal availability is a two step determination under ADWR’s interpretation of A.R.S. § 45–108(I)(1). First, ADWR must find that the water company is using the water for a reasonable and beneficial use. Second, ADWR must find that the water company has a legal means of delivering the water. ADWR has determined under R12–15–718(C) that the second step means a private water company has a CC&N.

The court agreed with ADWR that Pueblo’s planned use of the water was reasonable and beneficial because they planned to supply a subdivision with the water, thus satisfying the first step. The court also agreed with ADWR that Pueblo demonstrated a legal means of delivering the water because it had a CC&N, thus satisfying the second step. The court explained that ADWR’s determination that the second step requires the company to have a CC&N should be given great weight because the Director is an expert in the field vested with broad powers to achieve groundwater conservation. The court explained further that the department’s requirement that a water company have a CC&N kept with the consumer protection purposes of the statute because it requires the utility to be sufficiently financially viable to deliver, store, and treat such water.

The court also noted that in addition to determining mere legal availability, the Director of the ADWR has a more involved duty to determine whether adequate water is available. To make this determination, the Director is obligated to consider physical availability, which required the director to consider the water already commited to approximately 200 users. The ALJ determined that the Director considered Pueblo’s proposed water source and the demands from other users, and that Pueblo demonstrated that sufficient water would be available for 100 years.

Second, BLM argued that ADWR should consider its unquantified federal reserved water right, which has priority over Pueblo’s. ADWR countered by arguing that determination of those water rights fell under the exclusive jurisdiction of the Gila Adjudication and could not be adjudicated by ADWR in this proceeding. The court agreed with BLM, finding that ADWR not only had jurisdiction to consider the BLM’s claimed right, but had a duty to do so.

The court interpreted the language of R12–15–716(B), which requires the Director to consider the existing uses of groundwater, to include the consideration of the BLM’s federal reserved right. The court found that requiring ADWR to consider BLM’s right was in keeping with the intent of the groundwater statutes to protect Arizona’s economy and welfare, and to provide a comprehensive framework for the management and regulation of grounrwate, without compromising the preservation of the conservation area.

The court stated ADWR could use its expertise and knowledge to create an educated estimate of BLM’s quantified water right. However, the court distinguished ADWR’s duty to consider BLM’s claim from quantifying it. The court explained that quantification was the exclusive domain of the Gila Adjudication.

Finally, BLM argued that Pueblo’s proposed pumping might interfere with the Conservation Area and local surface or groundwater. The court found that ADWR was not required to separately consider the impact of pumping on the Conservation Area and local surface or groundwater. The court did not want to impose an obligation beyond ADWR’s obligation to consider adequate water.

Accordingly, the court vacated the judgment of the superior court, and remanded the action to ADWR with instructions to consider the BLM’s water rights claim in its evaluation of Pueblo’s application.

Trevor C. Lambirth

Image: Snow above the San Pedro River valley. Flickr user Lon&Queta, Creative Commons.


Over the last five months, Oregon lawmakers have been considering three bills that address the state’s ongoing inability to measure available groundwater as well as the state’s funding options for this much-needed research. Oregon’s agricultural industry, which accounts for eighty-five percent of the state’s water consumption, has been largely unregulated because the state’s Water Resources Department does not have updated knowledge as to how much groundwater is actually available. The long-term sustainability of water sources is an issue making its way to the forefront of many state legislatures, especially the agriculture-heavy states impacted by the recently unpredictable climate.

Oregon is one of many states that allows ranchers to pump water from underground sources, provided they obtain the proper permit. Oregon’s problem is that the state’s Water Resources Department has been handing out permits without knowing how much groundwater is available. Oregon Governor Kate Brown recommended in the 2017-2019 budget that the state double its capacity to perform groundwater research.

Oregon ranchers can legally extract nearly one trillion gallons of groundwater per year; however, a less established number is how much water the state collects per year from precipitation and other sources. The Pacific Northwest state has experienced an explosion of wells in recent decades as the state’s population continues to grow. There are an estimated 400,000 wells in the state, and the majority of well owners are simply on an honor system not to exceed their groundwater allowance. Even without consideration of recent droughts, it is clear that precipitation has not been replenishing the groundwater that Oregon ranchers are pumping. Over-pumping wells depletes Oregon creeks, which harms fish, and threatens communities as well as wildlife.

A permitted rancher is allowed to drill, so long as the well will not have a substantial impact on any river or lake. However, wells within a mile of a stream are subject to stricter rules in the state. The Oregon Water Resources Department is the state agency that appropriates groundwater and allows irrigators to dig new wells. The department is required to make sure the added stress of a new well will not drain an aquifer; yet up until one year ago, even when regulators suspected harm, permits were still being given out. Recently, state officials realized that the lax permit process was depleting Oregon’s water, forcing the department to stop processing new applications. The department contends that they lacked sufficient data to realize sooner that the over-approval of permits was causing water shortages. The department’s budget and staffing has remained stagnant over the past thirty years. Oregon lawmakers have made efforts to increase the department’s budget ever since it was cut in the last recession, but there has been enormous pushback from ranchers and other agricultural interests who have brought lawsuits and organized bills to stop state regulators from imposing water restrictions.

The most recent full-scale review of Oregon’s groundwater supply was conducted in 1968 by the federal government, which found that there was a shortfall of 11 billion gallons of water. The 1968 study found that in Harney Valley, one of Oregon’s nine key agricultural areas at risk of over-pumping, precipitation returned eighty-five billion gallons of water per year, while Harney Valley ranchers are permitted to withdrawal ninety-six billion gallons of groundwater per year. There is a major problem between the supply and demand of groundwater in Oregon’s agricultural areas, and since 1968, water use has only increased.

Current state-funded researchers have analyzed Harney Valley’s groundwater supply and expect to finish their study by 2020. However, Harney Valley is one of eighteen drainage basins in the state that require additional research to determine how much groundwater is actually available. At the current state spending levels, Oregon’s current research team will not complete studies of all eighteen basins until 2096. The state would suffer a major water crisis if Oregon ranchers continued to over-pump while waiting for research results during this seventy-nine-year gap. Oregon’s Water Resources Department suggested that completion of the water basin studies would cost between forty-five million and seventy-five million dollars.

Governor Brown proposed a new budget plan in December 2016 that requested 1.8 million dollars devoted to a new team of researchers to study the underground water sources in Oregon. Under the plan, five new field workers would be hired to perform research projects every five years. The new plan proposed an increase in funding for Oregon’s Water Resources Department of nine percent, bringing the departments total spending to $118.6 million. The Governor recognized that ongoing development in combination with drought conditions have forced Oregon into an unsustainable state.

Oregon lawmakers have also been presented with three bills that address the issue of how to pay for an expansion in the state’s groundwater studies. Oregon Representative Ken Helm introduced all three bills,

Fee for groundwater research

The first bill would charge water users, both business and agricultural, a one hundred dollar annual fee with a cap that would go towards groundwater research. Pursuant to the bill, personal wells would be exempt. Former Oregon Governor John Kitzhaber proposed a similar one hundred dollar fee in 2013 but pulled all support for the fee just one day later due to significant backlash. If passed, the first proposed bill would raise roughly eight million dollars in the 2017-2019 biennium for the Water Resources Department. Outside of the electricity costs of operating their water pumps, water users in Oregon currently pay nothing for the water they use.

Mandatory monitoring

The second proposed bill would require water users to install a measuring device that captures the rate and amount of water at each point it diverts from the water source. The state currently has no way to measure how much water well owners, who are on an honor system not to over-pump, use. Measuring devices can cost up to a few thousand dollars. While the measuring device is seemingly a one-time investment for water users, the device may require additional costly maintenance.

Budget increase for more groundwater research

The third bill proposed calls for $8.2 million in general fund dollars to help pay for the groundwater research expansion. The public’s response to the proposed bill is mixed, with some farmers applauding the legislative action and others disgruntled by the undue burden placed on water users. The third bill was endorsed by the House Energy and Environment Committee and passed on to budget writers in Salem, but in June, legislative budget writers approved a Water Resources Department budget that had no additional money for groundwater studies.

Oregon’s policy has been to approve permits for new wells so long as there appears to be no potential harm to neighboring water sources. Despite the lack of data behind the actual amount of groundwater available in the state, Oregon’s policy in the past has been to approve the building of new wells. One year ago, however, state officials halted all permit approvals. Governor Brown’s budget plan suggests her understanding, with many in agreement, that it is impossible to determine the potential harm to neighboring water sources when the state does not have sufficient knowledge on how much groundwater is available. In response to the proposed legislation, Oregon’s policy of approving wells may become much stricter. The state may choose to adopt a statute similar to Colorado’s. In Colorado, applicants who wish to build new wells have the burden of proving that enough water already exists before a permit is granted. Colorado’s Division of Water Resources also publishes annual reports on groundwater level data collected by the division available to the public. Another potential response is to adopt a more stringent cap of total water use where users can buy and sell water rights, similar to the common practice in Australia. Oregon could also choose to charge a per-gallon fee on owners of water rights.

A stricter approach to the way Oregon allocates well permits may be in the state’s future, but it could take multiple legislative sessions before legislation is passed. Lawmakers did support one water-funding bill this session, projected to bring in $838,000 in the next biennium through increased fees on water rights applications and transfers. The fee increase is a slow start as Oregon continues to fall behind on the measuring of its water usage. Helm will potentially revive the bills in the next short legislative session in 2018.

 

Sources:

Kelly House & Mark Graves, Water giveaway threatens livelihoods, wildlife, The Oregonian (Aug. 26, 2016), http://www.oregonlive.com/environment/index.ssf/page/draining_oregon_day_1.html.

Andrew Theen, Gov. Brown asks to expand groundwater studies following Oregonian investigation, The Oregonian (Dec. 3, 2016), http://www.oregonlive.com/environment/index.ssf/2016/12/gov_kate_brown_asks_to_expand.html.

Andrew Theen, Draining Oregon: Lawmaker wants groundwater tracking and fees to speed up research, The Oregonian (Dec. 22, 2016), http://www.oregonlive.com/environment/index.ssf/2016/12/lawmaker_now_is_a_good_time_to.html.

Andrew Theen, Draining Oregon: Lawmakers plan hearings on 3 water bills, The Oregonian (Mar. 21, 2017), http://www.oregonlive.com/environment/index.ssf/2017/03/draining_oregon_lawmakers_will.html.

Andrew Theen, Draining Oregon: Bill to fund $8.2 million in groundwater studies passes key hurdle, The Oregonian (Apr. 14, 2017), http://www.oregonlive.com/environment/index.ssf/2017/04/draining_oregon_bill_to_fund_8.html.

Andrew Theen, Draining Oregon: Water bills dry up in Legislature, The Oregonian (June 29, 2017), http://www.oregonlive.com/environment/index.ssf/2017/06/draining_oregon_water_bills_dr_1.html.

Nick Harrington & Peter Cook, Groundwater in Australia (The National Centre for Groundwater Research and Training, 2014), http://www.groundwater.com.au/media/W1siZiIsIjIwMTQvMDMvMjUvMDFfNTFfMTNfMTMzX0dyb3VuZHdhdGVyX2luX0F1c3RyYWxpYV9GSU5BTF9mb3Jfd2ViLnBkZiJdXQ/Groundwater%20in%20Australia_FINAL%20for%20web.pdf.

State of Oregon, Governor’s Budget 2017-2019, http://www.oregon.gov/das/Financial/Documents/2017-19_gb.pdf, (last visited Mar. 27, 2017).

Ground Water Levels, Colorado Division of Water Resources, http://water.state.co.us/groundwater/Levels/Pages/HydroGeo.aspx, (last visited Mar. 27, 2017).

43 Or. Rev. Stat. § 520.025 (2016).

Image: Welcome sign for Harney County, Oregon. Flickr user Ken Lund, Creative Commons.


The Water Law Review staff is excited to announce that petitioners in the Agua Caliente case cited our journal in their Petition for Writ of Certiorari to the U.S. Supreme Court. Petitioners, Coachella Valley Water District, cited WLR‘s own Dale Ratliff and his article, A Proper Seat at the Table: Affirming a Broad Winters Right to Groundwater, 19 U. Denv. Water L. Rev. 239 (2016). Congratulations, Dale!


University Of Denver Water Law Review Annual Symposium 2017: At The Confluence: The Past, Present, and Future of Water Law

        Denver, Colorado                         April 7, 2017

Evolving Water Law and Management in the United States: Delaware, Kansas, Montana, and Interstate Litigation

Professor John Peck of the University of Kansas School of Law introduced the second panel of the 2017 Water Law Review Symposium entitled “Evolving Water Law and Management in the United States: Delaware, Kansas, Montana, and Interstate Litigation.” Professor Peck chose these states because they represent a cross-section of the United States. He highlighted the major differences in rainfall between the states and explained that these states differ in the way they use groundwater and the rights applied to it.

Professor James May of the Widener University Delaware School of Law presented first regarding Delaware, which was the first state in the country to have water law. Delaware applies riparian water rights, which is mostly derived from the state’s common law.

Water use greatly affects the abundant wildlife in Delaware’s waters. The Delaware Bay Estuary is habitat for many water-dependent species, including migratory birds, marine turtles, horseshoe crabs, and twenty threatened or endangered species. Delaware has a high extinction rate—second only to Hawaii.

 

Furthermore, since the Swedes landed in Delaware in 1658 and first established water laws, water rights have been an important part of industrial development. Water law established through common law focused primarily on mill owners’ rights until the late Nineteenth Century.

Administrative agencies also manage Delaware’s water resources. The Department of Natural Resources and Environmental Control (the “DNREC”) is responsible for regulating water in Delaware and enforcing the Delaware Coastal Zone Act. The legislature passed the Act in 1971 to prohibit new heavy industry, bulk transfer facilities, and other non-conforming uses.

A compact between Delaware, New Jersey, Pennsylvania, New York, and the United States created the Delaware River Basin Commission (the “DRBC”) in 1961 to address and regulate a variety of water quality and quantity issues affecting the Delaware River Basin, such as permitting, water conservation issues, drought management, flood loss reduction, and recreation. The DRBC covers land under the Delaware River down to the low water mark in Delaware and New Jersey. New Jersey has been trying to get ownership of the land under the river back to the 1700’s and 1800’s, and as recently as 2008, but Delaware has always won those lawsuits.

Professor Peck began his discussion of water issues in Kansas with a general description of water in the state. Northeastern Kansas receives a great deal more rainfall than the southwest, but the west has most of the groundwater. There are several large aquifers in western Kansas, including the Ogallala, Great Bend Prairie, and the Equus Beds, as well as federal reservoirs. Kansas has two major river basins—the Kansas-Missouri River Basin in the north and the Arkansas River Basin, which starts in Colorado and flows down through Wichita and Tulsa, and eventually converges with the Mississippi River.

Professor Peck discussed the evolution and sources of water law in Kansas. The courts established most water law from the time Kansas got its statehood in 1861 until 1945, but there were very few cases. The state adopted common law at formation, including riparian water rights for surface water and absolute ownership for groundwater.

From 1945 to 1967, a mix of legislative and judicial actions managed water law. The legislature passed the Kansas Water Appropriation Act in 1945, which changed water rights from the common law doctrines of riparian and absolute ownership to prior appropriation. People using water in 1945 could get vested water rights, but people who were not using water in 1945 lost any rights the day the Act went into effect. Kansas citizens who lost their water rights brought claims alleging the Act was unconstitutional because it was a taking for which compensation should be paid, but the Kansas Supreme Court upheld the constitutionality of the Act by a six-to-one decision.

From 1967 to the present, administrative, legislative, and judicial processes have governed Kansas water law. By the 1960’s, users were depleting groundwater aquifers so, in 1972, the legislature passed the Kansas Groundwater Management Act, which permitted groundwater management districts to be set up for local control.

In 1978, the legislature made it a crime to divert water without a permit, except for domestic use, and created new districts for Intensive Groundwater Use Control Areas (“IGUCAs”). These IGUCAs gave the Chief Engineer extraordinary power, including the ability to change priority dates. The Chief Engineer established nine IGUCAs, including Walnut Creek, which includes the Cheyenne Bottoms wetlands at its eastern edge. The Fish and Game Commission (“FGC”) applied for a permit covering Walnut Creek to help preserve wetlands.

The Division of Water Resources issued several hundred permits in the alluvial of Walnut Creek after 1950, and by the mid-1980’s the creek began to dry up. After the FGC asked for assistance, the Chief Engineer set up hearings and issued an order, which found the total annual quantity allowed under the existing permits was well beyond the long-term sustainable yield, and the reasonable amount needed for irrigation was 12-14” per year. The order divided the prior appropriation rights into two groups. Those who had their rights before October 1965 had senior water rights, but those who acquired their rights after that date had junior rights. The order reduced senior rights from 18” per year to 12-14”, and junior rights from 18” to 6 ¼ – 5 ¼”.

Looking towards the future, former Governor Sam Brownback created a new program called the “50 Year Vision,” which addresses construction of the Missouri River Aqueduct, climate change, global warming, and interstate conflicts. The biggest question the program seeks to address are whether the state will mandate further water restrictions and if those restrictions will be constitutional. Professor Peck believes water issues affecting Kansas may require a change from cattle production since it requires so much water to produce a pound of beef.

Next, Professor Irma Russell of the University of Missouri Law School spoke about Montana’s water management. The eastern part of Montana may be dry, but there is a lot of rain and flowing rivers west of Missoula. Professor Russell analogized water users to a family and described additional water needs like another child joining the family. She believes Montana is a great example of water law in the western states because Montana demonstrates how water law relates to something larger than law as a controversy. In 1865, two decades before Montana became a state, the territory’s legislature passed an irrigation law. When the state’s Constitutional Convention met in Montana in 1972, the delegates agreed to include the right to a clean and healthful environment in their state constitution.

In terms of future challenges, Professor Russell believes it is necessary to find a unifying theme between different voices that have different interests to be able to see water law in an atmosphere of service and solicitude to the need to exist and to thrive. Senior and junior water rights holders’ reasonable interests weigh against these concerns. Peoplere always looking to what they have, how things are shared, and who has a right to it. That is the call of defending rights and figuring out how to live together and thrive together in the future.

Professor Burke Griggs, a visiting professor at the Washburn University School of Law, spoke last about the history of interstate water litigation. The Classical Period from 1900 to 1949 consisted of equitable apportionment and reticence; compact resolutions; and Congressional apportionments like the Rio Grande. Groundwater extraction and compliance with compact rules has dominated interstate water issues during the last fifty years. This phase of interstate water litigation has also dealt with groundwater modeling fights. Overall, cases have been more successful when the litigants used shared modeling.

Professor Griggs discussed a few examples of recent interstate litigation. In Mississippi vs. Tennessee, the Special Master found the Doctrine of Equitable Apportionment applies, so Tennessee did not trespass or convert water when it pumped groundwater out of the Mississippi Embayment Regional Aquifer System. In Florida vs. Georgia, the Special Master found that Georgia was probably harming Florida by over-pumping groundwater and starving Georgia’s oysterbeds, but since the U.S. Army Corps of Engineers was not a part of the lawsuit, the Court could not help.

Looking forward, Professor Griggs posed several issues likely to come up in the future of interstate water, such as how states will respond over the next fifty years as water in the Ogallala decreases and if there will we be compact litigation over water quality?