Compromise or Concession?

I. Introduction

The United States Forest Service (“Forest Service”) manages 193 million acres of land with a mandate to do so for the betterment of the public. As an agency within the Department of Agriculture, this usually manifests itself in the “multiple uses” management system that seeks to provide for outdoor enthusiasts, conservationists, and agriculturalists alike. But how does that directive mesh with ski resorts operating on public land that use scarce water resources to create snow? For the past half-decade, the Forest Service has been attempting to pass a regulation that would appropriate privately held water rights originating on National Forests back to federal government control. This article takes a brief look at the history of discord between ski resorts looking to develop on the publicly owned national forests, and the Forest Service. It also examines the lead up to, and consequences of, the most recent regulations imparting more federal control on water resources management in arid western states.

II. 100 years of Conflict

Ownership disputes of water rights developed and used on federal land dates back over one hundred years. The conflict playing out today, that of private landowners pitted against the Forest Service, spawned from restrictions on homesteading around the turn of the 20th century. When Gifford Pinchot, the first United States Forest Service leader, visited Colorado in 1909, westward-expanding citizens accused the Forest Service and the federal government of over-reaching their intended purpose, claiming they were “living in a state of fear.” The Forest Service had just enacted regulations removing tracts of national forest from homesteading availability. Over the last one hundred years, private landowners have butted heads with the federal government wanting more local control in lieu of federal oversight.

The relationship between Colorado water rights holders and the Forest Service is just as contentious today as it was when Pinchot visited the area over a century ago. The contentious relationship most recently manifested itself in a fight for control of water rights and permits that ski resorts use to manufacture snow. In 2004, the Forest Service attempted to create joint tenancy of water rights. In effect labeling themselves as “landlord” and ski resorts as “tenants.” Although applied to a few adjudications nationwide, many states do not recognize the concept of joint tenancy for water rights.

In 2011, the Forest Service issued a new regulation requiring ski area operators who develop new water rights within their ski permit areas to grant their newly acquired water rights to the United States Government. In 2011, the Forest Service applied this rule when the Powderhorn Ski Resort, near Grand Junction, changed hands. The Forest Service required the new owners to transfer their existing water rights to the government, conditioning the approval of the ski area purchase on the new owner’s acceptance of these terms. The ski resort industry fiercely criticized this policy, and many water rights holders were concerned about the supremacy of state water law over a forest service directive.

Traditionally states have had the sole authority to govern water rights creation and ownership within their borders, many water rights users saw this new policy as the federal government’s attempt to impose federal law in an area that state law wholly controlled. Later in 2011, the National Ski Areas Association (“NSAA”) filed suit in National Ski Areas Association, Inc. v. United States Forest Service. In reviewing the Forest Service regulation, the court held it was a new “legislative rule” subject to the requirements of the Administrative Procedure Act. Because the Forest Service did not publish its intent to create a new regulation, and sought no input from the public and those affected by the order, the Forest Service invalidly issued the rule.

Following the 2012 decision, the Forest Service engaged in a lengthy notice and comment period to fulfill its procedural obligations under the Administrative Procedure Act. The results of which yielded a regulation issued December 2015, and went into effect January 2016. The new policy is significantly different from the 2011 attempt, involving concessions and input from all interested parties, not just governmental.

III. Compromise and Concession

The latest iteration of the Forest Service’s attempt to secure title to water rights originating from federal land might best be described by the axiom, “(a) sign that a successful accord has been reached is that no one walks away from the table completely happy.”

Resorts gave up autonomous control of their water rights, which they previously enjoyed, and in return maintain the ability to buy and sell their water rights at will. However, in the wake of the Forest Service’s new policy, when ski resorts are sold and the buyer does not want to purchase the accompanying water rights then the federal government has the right of first refusal. Although a far cry from the Forest Service’s 2011 goal, the new rule provides a way to potentially gain water rights ownership, an important milestone, but the rule was not achieved without sacrifice.

This compromise can seem like a large departure when viewed in the context of the original 2011 Forest Service policy. The Forest Service intended to secure a concrete, real property interest in the water resorts use, the right of first refusal, created by the 2015 rule, is by no means a resounding success of obtaining that goal. Finally, the new regulation requires resorts to document whether their current water permits adequately address their needs or if they are using excess water. Aiming to hedge against water over use and potential resort water grabs, this requirement places an added administrative burden on resorts, but allows the Forest Service to better predict water supply shortages during droughts.

What might be the most telling fact about this process is who abstained from involvement. Refusing to throw punches at or for the Forest Service, local and regional environmental groups declined to extensively participate. Although not actively participating in the process, Ken Neubecker, Associate Director at American Rivers, was quick to caution against the direction the Forest Service is moving in this rule making, “[t]hey have a responsibility to the American public to manage these lands properly, and in the West, that means having some sort of administrative authority over what happens with water.”

IV. Conclusion

This struggle for authority over water rights is far from over. Environmentalists and recreationists alike are interested in what impact the new regulation has on water availability and the ability to enjoy the slopes. The immediate effect is maintenance of the status quo. Resorts still hold their water rights and the Forest Service allows the resorts to buy and sell the rights at their own discretion.

This means security for the snow conditions that draw tourists in from all over the country. It also means less than the ideal amount of Forest Service oversight and control. As long as resorts and other private companies continue to hold rights to water that originate on Forest Service land, in years of drought, water that could potentially assist agriculture, municipalities, or preserve local ecosystems will be in the hands of ski resorts for recreation.

Jackson Zoellner

Image: A backcountry skier atop Silverton Mountain in Silverton, Colorado. Flickr user Zach Dischner of Zach Dischner PhotographyCreative Commons.

Sources:

David Wise, Ending the Budget Wars, THE HILL OP ED (Nov. 5, 2013), http://thehill.com/blogs/congress-blog/economy-budget/189185-ending-the-budget-wars.

Ski Area Water Clause, 80 F.R. 81508, (Dec. 30, 2015) (to be codified at FSH 2709.11, Chapter 50).

Heidi Rucklidge, Ski Area Water Rights: Federal Water “Grab” Resolved?, WELBORN SULLIVAN MECK and TOOLEY PUBLIC LANDS BLOG (Feb. 22, 2016), http://www.wsmtlaw.com/blog/ski-area-water-rights-federal-water-grab-resolved.html.

Allen Best, Who Gave Up What In The Feud About Ski Areas and Water Rights?, MOUNTAIN TOWN NEWS (Feb. 6, 2016), http://mountaintownnews.net/2016/02/06/ski-area-water-rights-forest-lands/.

Nat’l Ski Areas Ass’n, Inc. v. U.S. Forest Serv., 910 F. Supp. 2d 1269 (D. Colo. 2012).

Jason Blevins, Forest Service Backs Off Controversial Water Clause in Ski-Area Permits, DENVER POST (June 18, 2014), http://www.denverpost.com/business/ci_29326058/forest-service-buries-plan-transfer-ski-area-water.

Paige Blankenbuehler, Forest Service Leaves Control of Water Rights to Ski Resorts, HIGH COUNTRY NEWS (Jan. 29, 2016), https://www.hcn.org/articles/new-forest-service-water-policy-leaves-control-of-water-rights-to-resorts.


Editor’s Note: This piece is a part of a six-part collaborative series between the University of Denver Water Law Review and the Stanford Environmental Law Journal that examines the upcoming Ninth Circuit case, Aqua Caliente Band of Cahuilla Indians v. Coachella Valley Water District and the development of the doctrine of federal reserved rights to water.

Introduction

The United States Forest Service (“Forest Service”) manages 193 million acres of land in the United States, which comprise of 8.4 percent of the total land area, and most of which lies west of the Mississippi River.  In May 2014, the Forest Service announced a proposal to amend its internal polices.  The amendment would establish a comprehensive framework for groundwater management on National Forest System (“NFS”) lands.  Following publication in the Federal Registry, the agency received over 250 comments from interested parties, including state and city governments, tribal groups, and conservation organizations.  Some comment submissions supported the Forest Service’s policy changes.  Others expressed concern over its lack of authority to institute groundwater regulations, and its potential overreach into state rights.  More specifically, commenters argued that the proposed directive had the potential to usurp state groundwater management by what they perceived was a huge expansion of federal authority over reserved water rights.  Ultimately, the Forest Service withdrew its proposed directive, but it intends to revise and resubmit similar directives following additional internal and external consultation efforts.

The Groundwater Directive

The Forest Service does not have a comprehensive policy for managing groundwater resources on NFS lands.  Its current policies provide little internal direction and only address “agency inventory and monitoring activities for groundwater.”  The proposed groundwater directive, entitled “Groundwater Resource Management,” would have amended the Forest Service’s internal directives for Watershed and Air Management.

Substantively, the proposed directive would help the agency manage access to and utilization of groundwater resources under NFS lands.  Broadly speaking, it would establish policies and procedures to help the agency evaluate activities that potentially affect the quality and quantity of groundwater.  The agency identified four objectives and eight broad changes that would result from the new directive.  Among them, and relevant to this discussion, is the establishment of a framework for evaluating existing and proposed Forest Service uses and special use authorizations.  For any such uses, the agency would begin to require “appropriate water conservation measures” to avoid, minimize, or mitigate adverse effects to groundwater.  The agency would not authorize development projects or use of groundwater if such uses failed to “adequately protect resources.”  Further, the Federal Service would assume that all groundwater and surface water is “hydraulically connected, unless demonstrated otherwise.”

The Forest Service offered numerous reasons for its policy change; however, two underlying rationales stand out.  First, the agency concluded that groundwater has inextricable links to all other sources of water in a watershed, so it is therefore “appropriate to include groundwater” in its management of NFS lands in order to maintain the integrity of all water resources.  Second, the Forest Service asserted that there is a “need” to create a consistent policy that addresses both surface water and groundwater resources, and the directive responds to external rules and recommendations calling for such policies.

Legal Concerns

The agency published the proposed groundwater directive for public comment and tribal consultation.  It received hundreds of responses from interested parties.  Some, including conservation groups and those representing tribal interests, favored, or were otherwise neutral to, the proposed policy changes.  However, a majority of those submitting comments opposed the Forest Service’s groundwater directive for a variety reasons.  Predominantly, the agency itself recognized that “[s]tates and a number of other organizations raised concerns that the proposed directive would exceed the Agency’s authorities and infringe on State authorities to allocate water.”

To the first point the agency identified, many commenters remarked that the Forest Service lacked independent authority to regulate groundwater, even that located under NFS lands.  For instance, the Western Governors’ Association (“WGA”), which represents the governors of nineteen Western states, argued that states have exclusive authority over ground water in the United States.  Congress granted such authority to the agency in the Desert Land Act of 1877, and the Supreme Court confirmed it in California Oregon Power Co. v. Beaver Portland Cement Co.  Although the federal government retained some power by reserving rights to surface water on public lands, the WGA and others contended that the Forest Service did not have such a reserved right to groundwater—not in the 1897 Organic Administration Act and not in case law. The Forest Service, on the other hand, argued that the proposed directive did not grant the agency any new authorities.  Instead, it simply clarified the agency’s already existing authority that mandates its protection of NFS lands, which inherently includes the regulation of groundwater.  Thus, this argument makes it clear that the Forest Service believed that federal reserved water rights apply to groundwater, and that the proposed directive was arguably an explicit expansion of those federal rights.

Commenters also highlighted the second concern the agency identified, that the directive infringed on state authority over groundwater management.  Many argued that the proposed directive overreached its stated goal and appeared to create federal rights that inherently conflicted with conferred state rights to groundwater.  The Forest Service later argued that “[t]he proposed directives did not, and any future actions will not, infringe on State authority.” However, ambiguity in the policy nonetheless created tension.  Without clarity, for instance, the proposed directive as written could have allowed the Forest Service to place quantity-based restrictions on waters connected to NFS lands, even if a state has previously authorized a diversion and depletion.  Additionally, commenters argued, the Forest Service should not presume a hydrological connection between surface water and groundwater.  It should instead leave this decision to the laws or agreements of individual states.

Conclusion

In June 2015, the Forest Service withdrew its proposed groundwater directive.  Although the Forest Service withdrew its directive, it announced an intention to continue engaging in dialog, both internally and publically, to develop revised proposed directives on the issue.  Ultimately, if the Forest Service manages to establish policies involving access to or utilization of groundwater resources on NFS lands, even for the purpose of enhancing water quality, it may constitute a large expansion of federal reserved water rights.

Kobi Webb, J.D., University of Denver School of Law, 2016

Image: Greer Spring in Missouri’s Mark Twain National Forest.  Flickr user U.S. Department of Agriculture, Creative Commons.

SOURCES

By the Numbers, U.S. Forest Service, http://www.fs.fed.us/about-agency/newsroom/by-the-numbers (last updated Nov. 2013).

California Oregon Power Co. v. Beaver Portland Cement Co., 295 U.S. 142 (1935).

Comments, Proposed Directive on Groundwater Resource Management, Forest Service Manual 2560, https://www.regulations.gov/#!docketDetail;D=FS-2014-0001.

James Cefalo, Return of the Federal Non-Reserved Water Right, 10 U. Denv. L. Rev. 45, 49 (2006).

Letter from Anthony L. Francois, Attorney, Pacific Legal Foundation, to Forest Service (Oct. 3, 2014), https://www.regulations.gov/#!documentDetail;D=FS-2014-0001-0129.

Letter from Barker Fariss, Ph.D, Tribal Historic Preservation Office, to the Forest Service (June 25, 2014), https://www.regulations.gov/#!documentDetail;D=FS-2014-0001-0130.

Letter from City of Greely, to Forest Service (Sep. 29, 2014), https://www.regulations.gov/#!documentDetail;D=FS-2014-0001-0230.

Letter from Eric Fry, Director of Regulatory Affairs, Peabody Energy, to Forest Service (Aug. 4, 2014), https://www.regulations.gov/#!documentDetail;D=FS-2014-0001-0045.

Letter from Matthew H. Mead, Chairman, and Steve Bullock, Vice Chair, Western Governors’ Association, to the Forest Service at 2 (Mar. 17, 2016), http://www.westgov.org/images/Forest_Service_Directives_FINAL_002.pdf.

Letter from Rex Tilousi, Chairman, Havasupai Tribe, to the Forest Service (Oct. 2, 2014), https://www.regulations.gov/#!documentDetail;D=FS-2014-0001-0193.

Letter from WGA, at 4; Letter from Clinton Ditch & Reservoir Company, the Forest Service at 4 (Aug. 21, 2014), https://www.regulations.gov/#!documentDetail;D=FS-2014-0001-0227.

Proposed Directive on Groundwater Resource Management, Forest Service Manual 2560, 79 Fed. Reg. 25816 (proposed May 4, 2014) (referring to FSM 2880, entitled “Geologic Resources, Hazards, and Services”).

Proposed Directive on Groundwater Resource Management, Forest Service Manual 2560, 80 Fed. Reg. 35299 (June 19, 2015).

U.S. Forest Service, “Key and Common Questions and Answers Proposed Groundwater Directive FSM 2560,” Question 5 (June 30, 2014).