Instream rights & invisible hands: prospects for private instream water rights in the Northwest.

I. INTRODUCTION

As fish and wildlife populations in the Columbia River Basin plummet, a diverse collection of individuals, groups, and governments dedicates an increasing amount of resources to an ever-worsening problem.(1) Despite these expenditures of time, energy, and money, many salmon runs continue to crash, and many water-dependent species waver precariously on the brink of extinction.(2) The reasons for this decline are myriad,(3) but a central problem is the lack of flowing water.(4) Salmon and trout require cold, clean, fast--moving water to survive,(5) and water development in the last century has steadily depleted this vital resource.(6) Water development takes many forms-agricultural use that reduces many streams to a trickle, dams that slow the migration of young anadromous fish to the sea, cities that seek to ensure high quality drinking water for an exploding populace--but all deprive fish of enough water flowing instream at the right time and speed to support their basic needs.

To improve instream flows, some have suggested that private groups and individuals should be allowed to "hold"(7) rights to water that would remain instream for the benefit of fish and other nonconsumptive(8) users. This practice is currently barred by the water laws of the four Columbia River Basin states--Idaho, Montana, Oregon, and Washington.(9) Advocates of private holding assert that, despite the apparently impressive array of legal means by which state, federal, and tribal governments can protect instream flows, salmon and other fish species still suffer from inadequate water supplies.(10) Because water law is largely a creature of state law, state agencies have primary responsibility for acquiring and enforcing instream rights.(11) The laws of all four Northwest states give agencies a variety of means by which to safeguard instream flows.(12) Unfortunately, the agencies seem to lack the will, the resources, and, often, the legal means to acquire and protect truly effective instream rights. Federal and tribal rights, although potentially powerful, are either poorly defined or as yet unquantified. The public trust doctrine(13) is largely untested in the Pacific Northwest as a means of securely protecting instream flows.(14) Part of the solution, these advocates say, is to enter the water market and acquire by purchase, lease, or donation private senior water rights for conversion to instream rights.

To understand the appeal of a market solution, it is important to review some basic principles of western water law and the prior appropriation system. The most often repeated maxim of western water law is "first in time, first in right."(15) This simple concept carries with it significant consequences for fish. Water rights established first have nearly absolute priority over all other junior rights, including those of the state. In times of scarcity, senior appropriators possess the right to cut off junior appropriators. Because most rivers in the Northwest are overappropriated, especially during the critical summer months, rivers can be completely dewatered, regardless of the effects on fish.(16) Even in Oregon, which established minimum streamflows in 1955,(17) fish are frequently at the mercy of senior appropriators, whose rights often carry a much earlier priority date.(18) Indeed, none of the instream rights established by state agencies or legislatures in the Northwest carry a priority date earlier than 1925,(19) and the vast majority postdate 1955.(20)

Further, when the prior appropriation doctrine first came into use in the mid-1800s, the needs of fish and wildlife were far from the minds of most lawmakers. "Manifest destiny" demanded that men develop the West, and "development" usually meant consumptive use.(21) Accordingly, custom recognized only those water rights that required a physical diversion of water.(22) When the Northwest states first passed water codes in the early part of the century, "fish and wildlife" were not among the uses that legislators declared "beneficial" and therefore were not considered worthy of legal recognition.

In recent years, Northwest lawmakers have made increasing attempts to protect instream flows.(23) For the most part, these approaches offer only junior rights.(24) Moreover, they depend on the good will of state agencies that historically have regulated primarily consumptive uses, and thus are frequently uncomfortable attempting to manage for instream flow.(25) In addition, the instream rights that have been created lack legal "equivalency" with appropriative rights because they generally operate outside the traditional water rights system(26) or as a cumbersome and ill-fitting addition to it. Finally, the highly bureaucratic process of establishing public rights in instream flows is often slow, contentious, and expensive.(27)

In an era of shrinking budgets and general antipathy towards costly government programs, states that wish to effectively protect minimum streamflows have limited alternatives. One option is modification of state water laws to allow any person, group, or government entity to acquire, file for, and hold instream water rights. Such a change could significantly supplement state efforts to protect instream flows. This Article explores the arguments for and against that option and offers guidance to Northwest policy makers considering whether privately held instream rights can offer benefits to salmon and other fish populations suffering from a lack of available water. Part II of the Article surveys the instream flow laws of the four Northwest states. Part III explains the shortcomings of publicly held instream rights. Part IV makes the case for allowing privately held instream rights and refutes some of the persistent myths employed by opponents of those rights. Part V studies the policies of Arizona and Alaska, two of only three Western states(28) that permit private holding of instream rights. considers the elements necessary for an effective instream flow statute, and offers a model for integrating privately held instream rights into the prior appropriation system. Part VI concludes by assessing the potential benefits of such legislation.

II. A SURVEY OF INSTREAM RIGHTS IN THE NORTHWEST

All four of the Columbia Basin states have passed legislation aimed at protecting instream flows. Most of these programs have relied on administratively set "minimum flows," which generally offer only junior rights, although Oregon and Washington have allowed private parties to donate senior rights to the state. This Part surveys the instream flow protection programs of each Northwest state, beginning with Washington, the first state to give its water agency the authority to condition permits to protect instream flows. The Part then examines the laws of Idaho and Montana, and concludes with a detailed look at Oregon's statute, which differs from that of the other three in several significant respects.

A. WASHINGTON

The first broad attempt to protect instream flows in the West occurred in 1949, when the Washington legislature gave the state water agency the authority to condition or deny new permits based upon their potential effects on fish populations.(29) Under this provision, the state water agency has conditioned or denied water rights on approximately five hundred streams.(30) Legislation passed in 1969 gave the Washington Department of Ecology (WDOE) authority to set affirmative minimum stream flow levels.(31) The Water Resources Act of 1971 requires WDOE to create water resource management plans.(32) Under the current statute, WDOE has "exclusive"(33) authority to "establish minimum water flows or levels for streams, lakes or other public waters for the purposes of protecting fish, game, birds or other wildlife resources, or recreational or aesthetic values of said public waters whenever it appears to be in the public interest to establish the same."(34)

WDOE establishes new instream flows as a result of rulemaking, with notice, comment, and hearings for interested parties.(35) Instream flows take only the priority date of their establishment, rather than the date of filing,(36) and because these flows are set by rule, they can be modified by rule.(37) A 1993 Washington Supreme Court decision determined that WDOE can set minimum flows at the "optimum" level necessary to support fish populations,(38) but the state has yet to use this authority.

Another statutory method by which Washington protects instream flows is the state's trust water rights program.(39) Under the program, water rights holders can donate, lease, or bequeath water rights to the state.(40) The program also requires the beneficiaries of water conservation projects to convey to the state the "net water savings"(41) generated by the project.(42) However, because the Washington legislature has refused to appropriate money for WDOE to run the program, no trust water rights have been established to date, despite a great deal of interest in the program.(43)

WDOE thus has a high level of discretion in protecting instream flows for fish. Most instream advocates believe that WDOE has not pursued either the minimum flow program or the trust water rights program with sufficient zeal to protect fish fully, which is largely attributable to the legislature's failure to appropriate money for the programs.(44) The programs are so poorly funded and disorganized that WDOE has not established any new instream flows since 1988.(45) Instream advocates in Washington are considering establishing a water trust to acquire and protect instream rights, but fear that their efforts will be fruitless unless the legislature changes the law to authorize private holding.

B. IDAHO

Idaho was the first state to actually appropriate(46) water for in-place uses, when in 1925 the legislature designated several lakes for protection and "[t]he associated water right was issued to the governor to be held in trust for the people of Idaho."(47) However, the state's instream flow program has since lagged behind those of the other Northwest states, and Idaho did not pass comprehensive instream flow protection legislation until 1978.(48)

Idaho's minimum streamflow law makes no provision for either the state or private parties to lease or buy senior water rights. Instead, Idaho relies on the Idaho Water Resources Board to file an application(49) with the Idaho Department of Water Resources to reserve the "minimum flow of water . . . required to protect the fish and wildlife habitat, aquatic life, recreation, aesthetic beauty, navigation, transportation, or water quality of a stream in the public interest."(50) Reservations can be made only from previously unappropriated water(51) and take the priority date of the application.(52) The director of the Department of Water Resources then must hold a hearing before approving the application; he must find specifically that the flow requested is "the minimum flow or lake level and not the ideal or most desirable flow or lake level" necessary for the beneficial use.(53) The director then must submit the approved application to the legislature before it becomes final.(54) If the legislature fails to act, the application becomes effective at the end of the session.(55)

Idaho's statute does little more than offer to protect the status quo. Moreover, it clearly places instream rights in a lower category than consumptive rights because, with the possible exception of interbasin transfers, no other type of water right must go through such an extensive hearing process and be subject to legislative veto.(56) However, because the legislature specifically made instream rights a beneficial use, it is possible that private parties could attempt to appropriate water for instream flows. As Boise water attorney Christopher Meyer has noted, the legislature did "not state whether [appropriation by the board] is the sole means of obtaining instream appropriations" and therefore "left open the question of whether a new appropriation of instream flow rights might be made by a private appropriator."(57)

Meyer contends that any attempt to restrict such appropriations violates Idaho's constitution, which guarantees a "right to divert and appropriate the unappropriated waters of any stream."(58) Over twenty years ago, the Idaho Supreme Court determined that this provision does not require a physical diversion of water,(59) and that "aesthetic and recreational" uses are beneficial ones.(60) These constitutional guarantees seem to open the door for private appropriations of instream flows, but the issue has never been judicially tested.(61)

The most important issue for endangered fish populations, though, is not whether private parties may appropriate new instream flows, but whether they may acquire transfers of existing senior rights to instream uses. The Idaho legislature has twice rejected legislation that would specifically authorize some kinds of transfers.(62) Significantly, neither rejected bill provided for private holding of transferred rights; the bills only would have clarified that the Water Resources Board could accept donations of them.(63) A similar bill was slated to be introduced in the 1996 session, but was never even printed.(64)

C. MONTANA

Montana's first efforts at instream flow protection came in 1969, when the legislature passed a short-lived statute granting the Montana Department of Fish, Wildlife and Parks the right to file for so-called "Murphy rights" on twelve blue-ribbon trout streams throughout the state.(65) The purpose of "Murphy rights" was to preserve the minimum flows necessary to protect fish and wildlife habitat.(66) "Murphy rights" are water rights within the prior appropriation system, but they are defeasible if the local district court finds that the waters are needed for a more beneficial purpose,(67) although none have been subjected to this process to date.(68)

The legislature replaced "Murphy rights" with a more comprehensive minimum flow reservation system in 1973.(69) The statute allows any state or federal agency to request a reservation for minimum flows on any stream up to a maximum of fifty percent of its average annual flow.(70) Applications for minimum flows go through the same notice and hearing procedures as applications for consumptive rights.(71) However, the Department of Natural Resources and Conservation, the state's water agency, must review the rights every ten years and may "extend, revoke, or modify the reservation" if the objectives of the reservation are not being met.(72)

Of the four Northwestern states, Montana has made the most recent changes in its instream flow protection program. In 1995, the Montana legislature passed HB 472, which allows holders of water rights to make a "temporary" change of their appropriative rights to instream rights "for the benefit of the fishery resource."(73) Appropriators may also lease their water rights "to another person for instream flow[s]" for fish.(74) The law limits "person" to "an individual, association, partnership, or corporation," and thus may exclude some governmental entities.(75) Although the Montana statute limits the "temporary" conversion period to ten years and thus is, in effect, a leasing statute,(76) the law is significant because it seems to indicate that the Montana legislature understands the important role that the private sector can play in protecting instream flows for fish. Consequently, HB 472 deserves a close look.

The bill was the culmination of six years of work on the part of instream advocates. Other bills that would have allowed the purchase or lease of existing rights for instream purposes were introduced in both the 1991 and 1993 sessions of the Montana Legislature but failed to attract adequate support.(77) The difference in 1995 was that instream flow advocates worked with agricultural and development interests to ease fears about creating a private market for instream rights.(78) Agricultural and development interests opposed the bill in the beginning, but they later realized that an alternative citizen initiative could produce a stronger piece of legislation. After polls in Montana showed broad public support for such a measure,(79) agricultural and development groups decided that they would rather work with environmentalists than risk a major overhaul of water rights laws through the initiative process. The opposing groups brought in a professional mediation service to help broker a deal.(80) As part of the resulting compromise, instream advocates agreed to limit the bill to leasing because agricultural interests were philosophically opposed to an ownership statute that they believed might permanently remove water rights from the land.(81)

The bill was meant to supplement a successful experiment with leasing by the Montana Department of Fish, Wildlife and Parks.(82) That Department supported the bill and would have supported a permanent private holding bill, based on its belief that private parties can help supplement the state's efforts.(83) Many interests in Montana are reticent to deal with the state, so private parties can play an important role.(84) In addition, private parties frequently have better contacts in the community and are more successful at finding potential leases because they are comfortable operating in the free market.(85) As of early 1996, no private leases are in place and only a single filing has been made.(86) However, the same coalition that drafted HB 472 is putting together a proposal to the Department of Natural Resources and Conservation to implement the law, and leasing should begin soon.(87)

D. OREGON

The earliest Western efforts to protect water resources in place date to 1915, when the Oregon legislature withdrew certain streams and waterfalls in the Columbia River Gorge from further appropriation "to preserve the[ir] scenic beauty."(88) Oregon later passed minimum streamflow legislation in 1955.(89) Minimum flows are set by the Water Resource Commission on its own or by request of the state Departments of Environmental Quality and Fish and Wildlife and "have as a priority date the date the application for the minimum perennial stream flow was filed."(90) The Commission has set at least 547 minimum flows under this statute, covering parts of most of Oregon's major rivers.(91) However, these minimum flows are set by administrative rule and are not considered water rights.(92)

Apparently recognizing the limitations of a program with such junior priority dates, the Oregon legislature amended the water code in 1987 by authorizing the state to acquire senior rights for conversion to instream rights without loss of priority date.(93) This statute was a major development in instream rights law because it attempted to make instream rights more like diversionary rights and not merely rules that could be changed administratively. Specifically, the legislature declared that "[a]fter the Water Resources Commission issues a certificate for an in-stream water right . . ., the in-stream right shall have the same legal status as any other water right for which a certificate has been issued."(94) Furthermore, the legislation mandated that the state Water Resources Department convert all minimum streamflows to instream water rights with water rights certificates reflecting the priority date of the original minimum streamflow.(95)

These amendments were significant also because they appeared to allow for private holding of rights converted to instream flow. Specifically, the statute said, "[a]ny person may purchase or lease an existing water right or portion thereof or accept a gift of an existing water right or portion thereof for conversion to an instream right . . . . At the request of the person the Water Resources Commission shall issue a new certificate for the instream water right showing the original priority date of the purchased, gifted or leased water right."(96) This language seems to open the door to private holding.

The statute is somewhat confusing, however, because it defines "instream water right" as "a water right held in trust by the Water Resources Department for the benefit of the people of the State of Oregon to maintain water in-stream for public use."(97) This definition may be redundant because the Department essentially administers all rights in trust for the people of the state, since water is a public resource.(98) The department's position is that any person who leases, purchases, or receives as a gift a water right and converts it to instream flow must transfer the right to the department to hold in trust for the people of Oregon.(99)

This interpretation seems to be supported by the legislative history of the statute. In hearings on SB 140, Jeannette Holman, legislative counsel, said, "[s]ection 9 [codified at ORS 537.348] deals with water rights that are donated by an individual to the state for the purpose of leaving that water in the stream."(100) Water Resources Commissioner Bill Blosser remarked that "person[s] would have no incentives to gift such a right to the state, or pay money for it with the intention of converting it, if they found that [a] municipality could come in and grab it."(101) These statements were uncontradicted and are the only expression of intent with regard to private holding that appear in the record. Because of these statements and the deference that courts will give the agency's interpretation of the statute, a challenge asserting the right to hold private instream rights is unlikely to succeed.

Despite this apparent statutory prohibition, private parties in Oregon continue to pursue privately held instream rights. In 1994, the Bonneville Power Administration (BPA) obtained a lease with the option to buy water rights and property at Skyline Farms near Vale, Oregon.(102) Skyline Farms owns water rights to appropriate water from the Snake and Malheur Rivers. BPA leased the right to 150 cubic feet per second (cfs) on the Snake and 68.4 cfs on the Malheur for one season, with the intention of helping the agency fulfill its duties under the Northwest Power Act.(103) Because of the difficulties in assessing the efficacy of such large rights in major tributaries,(104) BPA has no idea whether the lease actually helped fish and will not exercise its option to buy the property.(105) The Bureau of Reclamation has expressed an interest in acquiring the property for instream uses, though, and is unlikely to deed the water right over to the Department of Water Resources.(106) Accordingly, the Department of Water Resources may soon get a test case of its prohibition on holding by an entity other than the Department of Water Resources.

Another innovative experiment is the creation of the Oregon Water Trust. The Trust is a non-profit corporation created in 1993 to acquire instream rights for the benefit of fish and other nonconsumptive uses.(107) To date, the Trust has leased water rights and acted as a broker for private parties interested in donating their rights to the state for instream flow, although a purchase is in the works.(108) The Trust sees its long-term mission as being a holder of water rights, not a broker, and has urged the department to change its interpretation of Oregon's instream statute to allow private holding.(109) The Trust recently initiated a test case of this interpretation on Evans Creek, a tributary of the Illinois River.(110) Depending on the outcome of this litigation, the Trust may seek legislation to clarify that private parties can hold instream rights.(111)

III. THE PROBLEM WITH PUBLIC INSTREAM RIGHTS

Even under Oregon's law, publicly held instream rights can fall to protect fish populations. First, as a general rule, most publicly held instream rights have junior priority dates. Second, state legislatures have failed to adequately fund instream programs. Third, state agencies have not been vigorous enforcers of the instream rights they hold. Fourth, these agencies are saddled with highly inefficient and expensive bureaucratic processes for establishing instream rights. This Part examines those problems.

A. Priority

As should be apparent from the previous Part, Northwest states did not begin establishing minimum streamflows until fairly recently. Oregon's first minimum streamflows were established in 1958,(112) and Washington set only one minimum streamflow under its 1969 statute.(113) Idaho did not even pass minimum streamflow legislation until 1978.(114) Although Montana passed comprehensive legislation in 1973,(115) the reservations did not receive priority dates until the state approved the application, which often took years.(116) The legislature changed this provision in 1989, but the Department of Natural Resources and Conservation had already approved numerous consumptive use permit applications and had given them priority over previously filed instream applications.(117)

By the time minimum streamflow legislation was passed, many rivers and streams were either over-appropriated or nearly so. Although Oregon and Washington both allow the state to acquire senior rights, these provisions have been used infrequently. As a result, most state programs offer only junior rights. Such rights merely preserve an already precarious status quo and do little to provide optimal or even necessary flows to support maintenance and recovery of endangered fish populations.

Even where streams are not over-appropriated, instream flows may be low on the priority totem pole. For example, in Oregon, which has fairly strong instream flow legislation, future municipal and hydropower uses take priority over any instream rights requested by state agencies.(118) Montana's "Murphy rights" can be forced to give way to a "use more beneficial to the public."(119) Thus, some public instream rights may not even preserve the status quo. Unless a state is willing to buy or condemn senior rights, fish will always be threatened by low-flow conditions.

B. Funding

In a time of shrinking budgets, many agencies do not receive adequate appropriations for expensive items like senior water rights, even assuming that state legislation allows the agency to acquire them. For example, the Oregon Department of Fish and Wildlife has no budget for acquisitions of senior water rights,(120) although the statute clearly allows the agency to pursue them. Montana's Department of Fish, Wildlife and Parks has a two-year appropriation of $75,000 for acquiring leases and a general yearly budget of just $97,000 devoted to the whole spectrum of fish issues, including filing new applications.(121) The Washington Department of Ecology has no funding to acquire trust water rights, although there is a mechanism to fund the conversion of irrigation efficiencies to instream flows.(122) Idaho, with probably the weakest statutory program in the Northwest, allocates approximately $17,000 per year to the Idaho Department of Fish and Game to develop the data necessary to recommend new instream rights requests to the Idaho Water Resources Board.(123)

Even where Northwest states have acquired instream flows, enforcement of those flows is impacted by budgetary restraints. An example of those constraints comes from a 1993 Oregon Water Resources Department internal management directive, which says:

Effective implementation of water policy in Oregon continues to be hampered

because of an inadequate number of field enforcement workers in the Water

Resources Department. Despite increased statewide concern about water and

the extensive new workloads imposed by the Legislature since 1983, the

number of watermasters and assistants has dropped almost every year since

1982.(124)

These cuts mean that sixteen watermasters and ten assistants must attempt to enforce 70,000 water rights spread over more than 97,000 square miles.(125) Clearly, instream rights will not receive the attention they deserve when even state agencies do not believe that they have sufficient resources to enforce current laws and policies.

C. Enforcement

Inadequate funding may be the biggest impediment to vigorous enforcement of public instream flows, but the complaint-driven nature of water rights enforcement systems can cause problems as well. As Portland attorney Janis Carpenter has pointed out, the water laws of Idaho, Montana, and Oregon allow watermasters to take enforcement action only upon request of a water-rights holder.(126) When the holder of that right is a state agency, enforcement can suffer because the agencies may not have the staff, the time, or the inclination to monitor instream rights and complain whenever they are violated. Further, when the agency that holds the right is the same agency that must enforce it, there may be a conflict of interest when that agency has historically served consumptive users.(127)

Such is the situation in Oregon, where the Water Resources Department is both the holder and the enforcer of its instream rights. It must, in effect, complain to itself to obtain enforcement.(128) That enforcement may therefore be difficult, because the Department can only hope to protect its instream rights if the local watermasters it employs diligently monitor and report violations. Local consumptive users, however, have a great deal of influence over watermasters, because by law, the users pay, or at least contribute to, the compensation of the watermasters and their assistants.(129) In short, to effectively enforce instream rights owned by nonconsumptive users, watermasters must cut off water to those who pay, or contribute to, their salaries or those of their assistants. When the holder of instream rights does not have a local presence and does not contribute to a watermaster's salary, it may be difficult for the watermaster to insist on vigorous enforcement of those rights.

For instance, Oregon Trout has been involved in an ongoing struggle to enforce instream rights on the Middle Fork of the Malheur River in Logan Valley. In the early 1990s, the Oregon Department of Fish and Wildlife applied for instream water rights on the Middle Fork, which were eventually granted by the Oregon Water Resources Department after a contested case proceeding.(130) Despite inquiries from Oregon Trout and WaterWatch, the watermaster failed to take strong action against two illegal users while those proceedings were pending.(131) When Oregon Trout complained to the watermaster's supervisor, the group was told that the Water Resources Department had an "unwritten policy" not to take action against illegal users unless that illegal use was harming other uses.(132) A Water Resources Department official suggested to Oregon Trout that the Oregon Department of Fish and Wildlife, as the requester of the right, needed to complain before the watermaster would take action.(133) The lack of any clear authority for the public to request enforcement of public instream rights further weakens the effectiveness of those rights in protecting instream flows.

D. The Bureaucratic Process

The other significant problem with publicly held instream rights is the highly bureaucratic process that legislatures have established to secure those rights. As a general rule, an agency that wishes to set a minimum flow or acquire an instream right must develop more data and endure a much longer and more time-consuming hearings process than a private party seeking a new consumptive appropriation or transfer. For example, the Washington Department of Ecology must engage in notice and comment rulemaking to set minimum streamflows.(134) Requests for instream rights by the Idaho Water Resources Board are subjected to two sets of public hearings with a hearing officer and require the submission of a great deal more data than do requests for appropriative rights.(135) The result is that establishing instream rights can be very expensive. Agencies with limited budgets often cannot afford to request all of the rights that might be necessary to protect fish.

Another problem is that state water agencies are susceptible to political pressure in the process of setting minimum flows and instream rights. All of the instream flow statutes require public instream rights to be "in the public interest."(136) While public instream rights should comply with this standard, these provisions give administrators an opportunity to conclude that competing consumptive uses are more "beneficial," and deny or condition instream rights. In Idaho, for instance, minimum streamflows have been subordinated to future stockwatering rights, unrecorded rights, junior rights, and future development.(137) Moreover, because many instream flows are set by administrative rules, they can later be modified in response to political pressure. Washington's requirement that minimum flow rules be administratively reviewed "whenever new information, changing conditions, or statutory modifications make it necessary to consider revisions"(138) gives the agency enormous discretion to modify those rules.

This rulemaking process also serves to set instream rights apart from consumptive uses. The mere fact that instream rights are set by administrative rule adds complexity to the process of establishing them.(139) Because the majority of water rights applications are for consumptive rights, instream rights become the "other rights" requiring special treatment. Instream rights are thus more difficult for the agency to process than consumptive rights.

IV. THE CASE FOR PRIVATELY HELD INSTREAM RIGHTS

These problems with publicly held instream rights suggest that revisions to state water laws to allow private parties to hold those rights may be appropriate. By making water laws more consistent, privately held instream rights could simplify the job of state agencies. Ownership of those rights is important because ownership gives private parties legal authority to enforce instream rights. This Part considers the arguments for and against privately held instream rights.

A. The Importance of Consistency

The additional bureaucratic process required by most instream flow legislation prevents instream rights from being fully integrated into the prior appropriation system. Parallel processes are inefficient and make an agency's job more difficult. As long as administrators and instream advocates have to work harder to establish instream rights, fewer of those rights will be created.

Further, as detailed above, minimum streamflows set by administrative regulation are second-class rights in many ways.(140) Watermasters do not have a clear mandate to enforce these rights equally with consumptive rights. Illegal water users know that these rights are less enforceable and may feel that they can divert water designated for instream use without fear of consequences. State laws that place instream rights in a category separate from consumptive rights and exclude privately held rights only contribute to this perception. In order to make instream rights easier to establish and enforce, legislatures must eliminate these parallel processes and allow private parties to appropriate and transfer water for instream flows, just as they may appropriate and transfer consumptive water rights.

B. The Importance of Ownership

In a system where most water rights are held by private parties, many feel that private parties should be allowed to hold instream rights as well. Christopher Meyer says that restricting instream rights to public agencies is "essentially alien to the [prior appropriation] doctrine's nature," which historically has allowed any person to appropriate water for any beneficial purpose.(141) Meyer asserts that such restrictions are a perfect example of the type of command-and-control regulation that opponents of instream rights so strongly protest in other contexts; he even claims the private holding prohibition amounts to "socialism."(142) Although perhaps overstated, this allegation reflects the accurate perception that access to the water market is limited to certain types of consumers for certain types of rights.

Ownership is the cornerstone of the prior appropriation system because water rights are a type of property right. In any property rights system, owners have more legal authority to enforce and supervise their rights than do non-owners. Ownership buys standing to enforce the right in court and administrative proceedings. Most importantly, ownership gives the holder of water rights the power to demand that watermasters protect instream rights.

As explained above,(143) complaints from water rights holders drive the administrative water rights enforcement system. Watermasters work with the owners of water rights to resolve complaints and stop illegal use.(144) Their duty to respond to concerned members of the public is less well-defined and may be nonexistent.(145) By law, owners of water rights have a great deal of control and influence over the watermasters in their district.(146) In order for instream rights to receive equal treatment in this system, private parties must be allowed to hold those rights so that watermasters will be forced to respond to their concerns as well.

Groups such as the Oregon Water Trust (Trust) argue that the state should encourage private entities with the will and the money to enter the market for instream flows. These groups contend that their entry can help efficiently and fairly reallocate water to beneficial uses such as fish, wildlife, and recreation.(147) The Trust believes that ownership is the key to being a player under Oregon's water laws because only then will watermasters have a clear duty to respond to demands to enforce in stream rights.(148) Without ownership, the Trust cannot aggressively acquire water rights and effectively enforce those it holds.

C. The Power of Private Money

If money is any indicator, the Trust could play a significant role in keeping water instream for fish. The Trust certainly has more funding for the acquisition of instream rights than any state agency in the Northwest. As of February 1996, the Trust had an acquisitions budget of over $520,000,(149) roughly seven times that of the Montana Department of Fish, Wildlife & Parks, the state agency with the largest instream rights budget in the Northwest.(150) The Trust has a larger budget because it has access to more potential sources of income than does the state. For instance, much of the group's budget for acquisitions has come from the settlement of a contested case proceeding and a separate lawsuit brought by other groups.(151) Additional funds come in the form of grants from non-profit foundations. Federal agencies may also give acquisition money to the Trust, recognizing that the group's focus, diverse representation, structure, and private nature make it more effective at dealing with potential donors than a large bureaucracy.

A group like the Trust also has access to private donations and foundation support, which are unavailable to state agencies. At least one scientific survey taken in the early 1980s indicates that fishing and whitewater enthusiasts would be willing to pay up to thirty dollars per recreation day for adequate instream flows.(152) Just as private parties might be more willing to donate their water rights to a private group, they might be more willing to donate their money as well. The success of The Nature Conservancy suggests that private citizens are willing to pay membership fees to organizations that acquire private rights for public benefit.(153) The Nature Conservancy has been quite effective at acquiring biologically significant private lands for the purpose of preserving them and spends an average of $500,000 to $750,000 a year on acquisitions in Oregon alone.(154) The Trust should be able to replicate this model with respect to water rights.

This private money can provide an important and significant supplement to meager state budgets, but it is not a panacea. Senior water rights can be extremely expensive, especially on those streams that are overappropriated. For instance, a senior right in Oregon can cost anywhere from $200 to $300 an acre-foot to purchase outright.(155) The Trust recently negotiated a $6,600(156) annual lease for 1 cubic foot per second (cfs) on Buck Hollow Creek, a small tributary of the Deschutes River, to maintain steelhead salmon populations.(157) The Trust estimates that it could cost from $50,000 to $60,000 to buy the right.(158) The minimum amount of flow needed to maintain healthy fish populations varies of course from stream to stream and species to species, but purchasing necessary flows to support salmon on a major river could cost at least half a million dollars, assuming a minimum flow of 10 cfs at a cost of $50,000 per cfs. At these prices, the Trust cannot afford to acquire all the senior rights that salmon need, but its money will go much further towards this goal than that available to the state.

D. The Opposition of Agricultural & Development Groups

The opposition of the agricultural and development communities is probably the biggest stumbling block to private holding of instream rights. Agricultural and development interest groups have frequently opposed proposals to establish instream rights, particularly private rights.(159) Their opposition is a function of three main concerns: 1) the fear that instream rights will harm their current consumptive rights by reducing the amount of water available in return flows; 2) the fear that instream rights will hamper future economic growth; and 3) the basic belief that water should be used "on the land."(160) In addition, some may worry that the additional monitoring that accompanies instream rights may result in increased scrutiny of their own water use, exposing waste or lack of use. Finally, some resistance can be traced to a long history of antagonism between agricultural and development interests and traditional environmental groups, such as the Sierra Club. Advocates of private instream rights must consider each of these fears and try to forge a new model of cooperation and understanding if they are to succeed in passing legislation authorizing private holding of instream rights.

The first argument, that instream rights will somehow take water away from existing uses, has been called "one of the persistent shibboleths of instream flow programs."(161) The argument is a myth for several reasons. First, because of the "no injury" rule, any transfer of senior rights to instream flows cannot harm junior rights downstream by reducing return flows on which those junior users rely.(162) Any private party that acquires a senior instream right is entitled to enforce the full flow, which might be ten cfs, only between the original diversion point and the original return point. If the original consumptive right returned four cfs to the stream, the instream flow will be only six cfs below the return point. Parties downstream relying on the four cfs return flow for their consumptive uses will still receive that water.(163) A senior holder of an instream right might also be able to enforce the right upstream, but only if the entitled flow is not reaching the original diversion point; this is, of course, the same right possessed by the original consumptive user, and therefore presents no more threat to current vested rights than did the original senior consumptive use.(164) The Arizona Department of Water Resources considered such arguments in the Ramsey Creek case and dismissed them, "conclud[ing] that `since there will be neither an actual, physical diversion or storage nor a substantial consumptive use of public waters,' no conflict would occur,"(165) and the instream rights would not injure the rights of any other appropriators.(166)

The second argument, that instream rights stifle economic development, is similarly misleading. As Christopher Meyer has pointed out, new instream flow appropriations

may block or complicate further development (in the form of changes,

transfers, and new users). But then again, so do all water rights. For

example, a major hydroelectric dam or other project downstream on a river

has the effect of preventing all new upstream consumptive use of that

water. This is the way the prior appropriation doctrine always has

operated.(167)

New appropriations of instream rights would operate only to preserve the status quo, so that conditions for fish do not worsen. This is also true of transfers of senior rights to instream flows because the water used by the consumptive senior right was never available for other economic purposes. The holder of the new instream right can claim only the amount of water diverted and put to use by the prior appropriator.

Opponents may fear a rash of instream flow applications and transfers by environmental groups. However, given the costs of establishing and protecting those rights, instream advocates are likely to confine their acquisitions to streams that will give the largest and most identifiable return on their investments. Such acquisitions usually will consist of the purchase or lease of senior rights for conversion to instream flows, which offer little or no threat to vested rights. The small number of new private instream filings in states like Alaska and Arizona, which allow the practice, bears this out and should allay the fears of the holders of vested rights.(168)

The third argument, the philosophical belief that water should be used "on the land," may be the biggest stumbling block to private holding. For one thing, severing water rights from land ownership could reduce the tax base of rural counties. For this reason, many in the agricultural community see instream rights as a further assault on their way of life. Federal and state environmental laws have certainly affected cattlemen and farmers, but fundamental changes in the economies of the Northwest states have also played a large role. Much of the blame for these changes is placed on environmentalists. Instream rights are seen as one more attempt by environmentalists to further change rural lifestyles.

This fear of change is understandable, and it is probably a natural response to a broad array of social and economic events. Change, however, is inevitable, and the choice for those who fear change seems clear: either embrace change now and have some voice in its course, or continue to resist and have change imposed through new Endangered Species Act(169) listings,(170) adJudications of federal and Indian reserved rights,(171) court-mandated restructuring of water laws under the public trust doctrine,(172) or citizen-based initiatives.(173)

Instream rights carry with them considerable economic benefits. Recreation and tourism are now significant sectors of the economies of most western states, frequently rivaling agriculture in importance.(174) Instream flows help protect these benefits. In addition, private holding of instream water rights may be able to keep some property in the tax base that would otherwise be lost. For example, a failing ranch could become a destination resort by converting its irrigation rights to instream flows and cultivating trout fisheries. Change does not have to mean economic failure.

The Oregon Water Trust appreciates this fear of change and believes that it has a workable model for dealing with the agricultural community.(175) The Trust attempts to acquire water rights only in those communities in which it has an active presence.(176) The hope is that water rights holders who know about the Trust from a neighbor will be more willing to deal with the group.(177) The Trust has found that many of these rights holders are more wiring to work primarily with a private entity like the Trust than with state bureaucrats.(178) Although some research suggests that this last assumption may not always be correct in that some members of the community will always be mistrustful of anyone who wants to keep water instream,(179) at least one certified water rights examiner encourages clients to work with the Trust because it "has no enforcement authority and [its] only incentive is to create mutual benefits."(180) Cooperative and mutually beneficial solutions will go a long way towards easing the pain that economic restructuring is sure to bring.

For those who fear that private instream rights may result in increased scrutiny of their consumptive rights, however, there is no comforting answer. Nor should there be. The increased monitoring that private holders of instream rights will conduct may indeed discover waste and illegal use. To the extent that privatizing instream flows contributes to the discovery of such abuses, it is a net benefit to the entire water rights system and should be welcomed by legislatures, administrators, and the public.

V. A MODEL FOR INTEGRATING INSTREAM RIGHTS INTO THE PRIOR APPROPRIATION SYSTEMS OF NORTHWEST STATES

If instream rights are to adequately protect fish populations, those rights must be integrated into the prior appropriation system. This Part looks at two states, Alaska and Arizona, that permit privately held instream rights but have failed to make those rights subject to the same process as consumptive rights. The Part then considers the problem of placing public resources in private hands and offers a model for amending water codes to allow privately held instream rights.

A. Two Case Studies--Arizona & Alaska

Both Arizona and Alaska allow private parties to hold instream water rights and have developed extensive regulations for implementing those rights. These systems deserve close attention because despite the good intentions behind them, they fail to solve many of the problems inherent in publicly held instream rights. Northwest lawmakers need to study the Alaska and Arizona approaches to avoid making the same mistakes.

1. ARIZONA

The Arizona Legislature amended its water code in 1941 to add "wildlife, including fish" as beneficial uses for which "any person" could appropriate water.(181) A similar amendment in 1962 added "recreation" as such a purpose and also clarified that the State of Arizona, not just private parties, could appropriate water for those reasons.(182) In 1976, the Arizona Court of Appeals found that, in these amendments, "the concept of in situ appropriation of water was introduced--it appearing to us that these purposes could be enjoyed without a diversion."(183) The finding that no diversion was necessary to make a valid appropriation was significant, and led the Arizona Department of Water Resources (ADWR) in 1983 to approve The Nature Conservancy's application for a permit to appropriate water instream on Ramsey Creek for recreation and wildlife purposes.(184) The Conservancy provided data to support its claim of beneficial instream use, and ADWR issued a certificate of water right in November 1990, the first instream flow water right issued in Arizona.(185)

Currently, ADWR has roughly seventy instream applications on file, but has issued a total of only eleven permits to just three different entities: the Arizona Nature Conservancy, the Bureau of Land Management, and the Tonto National Forest.(186) Only three of those permits have received water rights certificates.(187) Arizona's statute is attractive in its simplicity because instream rights for fish and wildlife are beneficial uses apparently subject to the same procedures as any other water right. However, actually obtaining a water rights certificate for an instream flow is a long and expensive process. ADWR has developed a seven-step procedure that requires the applicant to collect at least one year of on-site streamflow measurements taken each month during the period of the proposed beneficial use in order to qualify for a permit, and at least four years of similar data to perfect the right and receive a certificate.(188)

It could be argued that the Arizona system is not worth the investment. First, in Arizona, water rights for instream flow may not be held independently of land ownership, except by the state.(189) This requirement accounts for the fact that only land-holding "persons" like federal agencies and The Nature Conservancy have thus far received permits for instream flows. Second, most of the reliable surface water was appropriated by 1919.(190) Compounding the problem, junior water rights claims are still being adjudicated and groundwater is so over-allocated that instream rights frequently offer very little real benefit to fish.(191) Further, Arizona has no administrative process by which to enforce instream rights, so an instream holder must bring the equivalent of a civil quiet title action to protect that right.(192) Finally, it is currently unclear whether senior diversionary rights holders can convert their rights to, or lease them for, instream use.(193) In stream advocates tried to pass an instream rights bill in 1992 to clarify the situation, but, in the words of one participant, "got nowhere."(194) Thus, Arizona's statute leaves unanswered many critical questions and fails to adequately protect instream flows.

2. ALASKA

Arizona's instream advocates modeled their 1992 proposed legislation on the instream flow bill passed by the Alaska legislature in 1980.(195) Alaska's bill was the first, and remains the only,(196) legislation to specifically grant a "person" the right "to reserve sufficient water to maintain a specified instream flow or level of water at a specified point on a stream or body of water, or in a specified part of a stream, throughout a year or for specified times."(197) Alaska's statute can be distinguished from Arizona's in that Arizona's privately held instream rights are to some degree a judicial creation, while Alaska's are purely a product of the legislature.

In Alaska, instream rights can be appropriated for "(1) protection of fish and wildlife habitat, migration, and propagation; (2) recreation and park purposes; (3) navigation and transportation purposes; and (4) sanitary and water quality purposes."(198) Such reservations of water must be "in the public interest," and the Department of Natural Resources (DNR) will grant such rights only if "the applicant has demonstrated that a need exists for the reservation."(199) Despite its apparent significance, Alaska's statute still makes instream rights second-class rights by adding layers of review and other restrictions, including the possibility of administrative curtailment or revocation, to which consumptive rights are not subject.(200)

As of January 1996, only the student chapter of the American Fisheries Society and the Juneau Chapter of Trout Unlimited had filed for and received instream rights in the fifteen-year history of the statute.(201) Christopher Estes, instream flow coordinator for the State of Alaska, cites several reasons why the statute has been little used. First, an apparent perception of abundant water supplies seems to have led Alaskan conservationists to believe their time is better spent on more immediate threats.(202) Second, time is a very real factor under the Alaska statute because all applications for instream flow must be adjudicated,(203) and the process often takes years.(204) By contrast, consumptive rights need not be adjudicated. Third, an application for an instream flow requires more information, and review of that application is more rigorous than that of an application for a consumptive use.(205) Finally, under the Alaska statute, instream rights must be reviewed by the commissioner of DNR every ten years to determine if there is still a need for the reservation.(206) Consumptive rights are not subject to such a review.

DNR has issued regulations that further explain the criteria used to evaluate an application for an instream flow reservation. In addition to quantifying the amount of water requested, applicants must "identify physical, biological, water chemistry, and socio-economic data substantiating the need for and the quantity of water requested for the proposed reservation,"(207) and "explain the methodology used to quantify" it.(208) The regulations also state that a certificate of reservation cannot be transferred or converted to another use.(209) Under the regulations, the commissioner may choose to review the right in less than ten years if a subsequent application to appropriate water is filed and the stream cannot fulfill both the consumptive use requested and the instream water right.(210) In conducting this review, the commissioner must determine whether the purpose and need of the application still applies and whether any "beneficial use of the water not previously considered has been proposed."(211) If the commissioner finds that "the purpose of the reservation or all or part of his findings in granting the reservation no longer apply," she has the discretion to revoke the instream right.(212)

Clearly then, instream rights are not on equal footing with consumptive rights. Not only must instream appropriators go through a much more rigorous process than consumptive users in obtaining their rights, the instream right may have to give way to a subsequent competing out-of-stream use if the commissioner determines that use to be more beneficial. Thus, under Alaska's statute and regulations, instream reservations are defeasible, not vested property rights. This disparate treatment may account for the lack of interest in Alaska's instream program. Curiously, despite this lack of interest, Estes believes that the statute may soon come under legislative attack by development-minded legislators who want to remove any potential impediment to consumptive water uses.(213)

B. Public Resources, Private Hands

A key problem in drafting instream legislation is insuring that the granting of private rights does not result in abuse of the public trust. Some argue that instream flows provide mostly public benefits and therefore should not be placed in private hands.(214) This sentiment has led most Western legislatures to restrict the holding of instream rights to state agencies. Those states that do allow private entities to hold instream rights, such as Arizona and Alaska, require potential holders to prove that they will hold those rights for the public interest.

As a legal matter, though, the restrictions in the Arizona and Alaska programs seem to be superfluous and unnecessary because, in the Northwest states, all waters of the state are publicly owned and therefore subject to the public trust.(215) Water rights are property rights, but they are merely usufructory rights, and prior appropriators may use water only in certain publicly prescribed ways.(216) The doctrines of waste, abandonment, and beneficial use, for example, are all intended to protect the public interest.(217) One who appropriates water for instream purposes would be similarly bound by those doctrines. Any attempt to use that water for other than the purpose for which it was appropriated can result in loss of the right.

Others worry that privately held instream rights might open the door to speculation in water and that the risk to the public trust is too high.(218) If instream rights can be appropriated and transferred like consumptive rights, developers might file for instream rights and convert them to consumptive uses when development opportunities arise. Such a speculator is likely to be much less concerned about illegal consumptive use of the instream right than is a party who holds the right for public benefit. In a system that relies on complaints from the water rights holder to initiate enforcement action, the likelihood that a speculator will fail to enforce the right is significant. In such a circumstance, who can enforce the instream water right? At least one commentator answers that the state will ferret out such speculative instream claims just as it ferrets out waste and nonuse with respect to consumptive rights.(219) This may be misplaced optimism, however, given the acknowledged understaffing of water agencies and their resulting inability to monitor current instream rights.(220)

As a practical matter, however, the risk of such lack of enforcement seems slight because developers are unlikely to engage in subterfuge when they can acquire consumptive rights on the open market. Even if a developer does acquire instream rights, groups like WaterWatch are certain to scrutinize the developer's performance and complain to the state if the developer fails to protect the rights. If such a group could document a continued failure to enforce the right, the speculator may leave the right open to a claim of abandonment. Few developers will be willing to put up with such headaches when other rights are readily available.

The benefits of integrating instream rights into the prior appropriation system should outweigh any potential risk of speculation. Further, any attempt to limit holding to those who have only the public trust in mind is sure to exclude legitimate stakeholders and create opposition to the proposed legislation to authorize private holding of instream rights. For example, a rancher who wishes to turn his ranching operation into a fishing lodge may wish to convert his consumptive right to an instream right to develop better fisheries. While the rancher may not have the "public interest" in mind, fish will benefit. Thus, "any person" ought to be allowed to hold an instream right without having to prove that those rights will be held in the public interest.

C. Amending Water Codes

The best way to integrate instream rights into the water laws of the Northwest states is to make the rights resemble appropriative rights as much as possible. The lesson to be learned from Arizona and Alaska is that the more bureaucratic hurdles a state places in an instream statute, the less that statute will be used. The less the statute is used, the fewer the instream rights which will be created and the more fish that will suffer. Attempts to protect the public interest by discouraging speculation have inhibited establishing instream rights, and fish have not received the protection they need.

The solution is for states to retain current publicly held instream flow legislation, while giving private parties the right to appropriate and transfer water for instream flow under existing statutes. Publicly held instream rights statutes are important because they create a baseline below which flows may not fall. While these statutes may need amendment to streamline the bureaucratic process, such amendments are beyond the scope of this Article. A goal might be for states to maintain minimum flows, while private parties use their resources to acquire senior rights to create "optimum" flows for fish.

The first step is to amend water codes to clarify that "instream flow" is a beneficial use. While most Northwest states declare instream flow to be such a use in their minimum flow or instream rights legislation, appropriative statutes also should state clearly that instream uses are beneficial, and therefore subject to appropriation. The second step is to eliminate diversion requirements to obtain appropriative rights. Idaho has done so judicially,(221) but a legislative acknowledgment would help integrate the decision into the statute. The other Northwest states should follow this lead. The diversion requirement impedes the acquisition of instream rights and, given the highly developed record-keeping procedures of state water agencies, no longer serves its original purpose of giving other users notice of a prior claim.

Amendments also need to clarify that instream rights are subject to rules of abandonment and waste just like any other right. Such rules help protect the public interest and can give opponents and guardians of instream rights alike a fair opportunity to contest those rights if they are not being used for their stated beneficial purpose. For this reason, instream rights should go through the same notice and hearing procedures as other appropriations and transfers. They should be subject to the "no injury" to third parties rule to protect the rights of other appropriators. Treating instream rights the same as diversionary rights will simplify the job of state water agencies.

Finally, water codes must state clearly that instream rights can be transferred like consumptive rights and that consumptive rights can be converted to instream rights. Arizona's statute is unclear on this point, so private parties have been hesitant to use the transfer process.(222) Private parties who acquire instream rights need to know that they can transfer those rights to other uses if the right no longer fulfills its original purpose. For example, if the Oregon Water Trust purchases an instream right to protect a run of sockeye salmon and that run goes extinct, the Trust should be allowed to sell the right and buy other rights that might be more beneficial. In this way, water can be allocated efficiently, and the Trust will not lose its investment to a claim of abandonment.

Suggestions for how the water laws of the four Northwest states can be amended in this way are included in the Appendix of this Article. To the extent possible, these amendments preserve current water laws and make relatively uncomplicated changes. The goal of these amendments is equally simple: to add instream flow as a beneficial use for which water may be appropriated and transferred by private parties, without causing injury to the rights of other appropriators.

VI. CONCLUSION

If Northwestern legislatures create a class of privately held instream rights, the benefits for streamflows could be significant. Private parties will have standing to enforce instream rights. The resulting increased legal influence that these parties will have may lead watermasters and other users to take instream rights more seriously. Parties who have invested significant sums in private rights are likely to be vigilant in seeing that their rights are protected. As these parties pressure watermasters to enforce private instream rights, state instream rights might be better enforced as well.

Private parties also can provide an important source of additional funds to supplement state efforts to maintain adequate instream flows for fish. Private parties operating in the free market can use their funds to acquire senior rights on important streams and tributaries, without harming the rights of other users. These free market entrepreneurs can complement state minimum flows by improving minimum flows to "optimal" ones or creating minimum flows where none exist now. However they choose to spend their money, these "invisible hands" can make a significant contribution to improving Northwest streamflows and the status of dependent fish and wildlife species.

APPENDIX

A. Idaho Proposed Amendments

A BILL FOR AN ACT

Relating to appropriations and transfers of water for instream flow maintenance; creating new provisions; and amending Idaho Code [subsections] 42202 & 42-301.

Be It Enacted by the People of the State of Idaho:

SECTION 1.

(1) The legislature of the state of Idaho hereby declares that appropriations or transfers of water for instream flow purposes are beneficial uses for purposes of section 42-104, Idaho Code and shall be subject to section 42-217, Idaho Code, but shall not require a diversion of water.

(2) The term "instream flow purposes" includes, but is not limited to, any use of water required for the protection of fish and wildlife habitat, aquatic life, recreation, aesthetic beauty, transportation and navigation values, and water quality.

(3) Any new application for a permit to make an appropriation of water for instream flow purposes shall be filed pursuant to section 42-202, Idaho Code.

(4) Any application for a transfer of water to instream flow purposes shall be filed pursuant to, and is subject to the provisions of, section 42-222(1), Idaho Code.

(5) Any right granted under the provisions of this section shall be subject to protest under section 42-203A, forfeiture under section 42-222(2), and contest under section 42-301, Idaho Code.

SECTION 2. Section 42-202 is amended to read:

(1) For the purpose of regulating the use of the public waters and of establishing by direct means the priority right to such use, any person, association or corporation hereafter intending to acquire the right to the beneficial use of the waters of any natural streams, springs or seepage waters, lakes or ground water, or other public waters in the state of Idaho, shall, before commencing of the construction, enlargement or extension of the ditch, canal, well, or other distributing works, or performing any work in connection with said construction or proposed appropriation or the diversion of any waters into a natural channel, make an application to the department of water resources for a permit to make such appropriation. Such application must set forth:

(a) The name and post-office address of the applicant.

(b) The source of the water supply.

(c) The nature of the proposed use or uses and the period of the year during which water is to be used for such use or uses.

(d) The location of the point of diversion and description of the proposed ditch, channel, well or other work and the amount of water to be diverted and used, or in the case of an application for instream flow purposes, the beginning and end points of the requested right.

(e) The time required for the completion of construction of such works and application of the water to the proposed use.

(2) (deleted from existing statute)

(3) Whenever it is desired to appropriate and store flood or winter-flow waters, the applicant shall specify in acre feet the quantity of such flood or winterflow waters which he intends to store, but for irrigation purposes he shall not claim more than five (5) acre feet of stored water per acre of land to be irrigated, nor, in the event of the filing of an application claiming both normal flow and flood water and winterflow water, shall the total amount of water claimed exceed the equivalent of a continuous flow during the irrigation season of more than one (l) cubic foot per second for each fifty (50) acres of land to be irrigated, or more than five (5) acre feet of stored water for each acre of land to be irrigated.

(4) The application shall be accompanied by a plan and map of the proposed works for the diversion and application of the water to a beneficial use, showing the character, location and dimensions of the proposed reservoirs, dams, canals, ditches, pipelines, wells and all other works proposed to be used by them in the diversion of the water, and the area and location of the lands proposed to be irrigated, or location of place of other use.

(5) If the application involves more than twenty-five (25) second feet of water or the development of more than five hundred (500) theoretical horse power, or impoundment of water in a reservoir with an active storage capacity in excess of ten thousand (10,000) acre feet, the applicant may be required by the director of the department of water resources to furnish a statement of the financial resources of the corporation, association, firm or person making the application, and the means by which the funds necessary to construct the proposed works are to be provided, and the estimated cost of construction; and if such application is made by a corporation, the amount of its capital stock, how much thereof has been actually paid in, and the names and places of residence of its directors; and if for the generation of power or any other purpose than irrigation or domestic use, the purpose for which it is proposed to be used, the nature, location, character, capacity and estimated cost of the works, and whether the water used is to be and will be returned to the stream, and if so, at what point on the stream.

(6) In case the proposed right of use is for agricultural purposes, the application shall give the legal subdivisions of the land proposed to be irrigated, with the total acreage to be reclaimed as near as may be; provided, that no one shall be authorized to divert for irrigation purposes more than one (l) cubic foot of water per second of the normal flow for each fifty (50) acres of land to be so irrigated, or more than five (5) acre feet of stored water per annum for each acre of land to be so irrigated, unless it can be shown to the satisfaction of the department of water resources that a greater amount is necessary. Provided further, that the plan of irrigation submitted shall provide for the distribution of water to within not more than one (1) mile of each legal subdivision of the land proposed to be reclaimed by the use of such water; provided also, that in the case of all ditches designed to have a capacity of ten (10) cubic feet per second or less, such map showing the location of such ditch, and the place of use of such water, or the location of the lands to be irrigated, may be upon blanks furnished by the Department of Water Resources.

No application shall be accepted and filed by the Department of Water Resources until the applicant shall have deposited with the Department a filing fee as in this act provided.

All moneys received by the Department of Water Resources under the provisions of this chapter shall be deposited with the state treasurer, and such sums as may be necessary shall be available for the payment of the expenses of the department of water resources incurred in carrying out the provisions of this chapter.

Such expense shall be paid by the state controller in the manner provided by law, upon vouchers duly approved by the state board of examiners, for the work performed under the direction of the department of water resources. The department of water resources shall keep a record of all filing fees received in connection with applications for permits to appropriate public waters.

Provided further, that rights initiated prior to the enactment of this amendment, so far as it pertains to flood and winterflow waters, shall not be affected thereby.

SECTION 3. Section 42-301 is amended to read:

If the holder of a permit to appropriate the public waters shall fail to comply with the requirements of his permit as to the commencing of work or the filing of bond thereunder, or the completion of one fifth (1/5) of the construction work within one half (1/2) the time allowed for the entire completion of such construction work, or shall fail to complete the entire construction work within the time specified in his permit, or in the case of a permit for instream flow purposes, fails to prove that the requested flows exist as required in his permit, said permit may be canceled and voided by the department of water resources as hereinafter provided at the instance of any person or persons holding any permit for the diversion of water from the same stream, such permit postdating the permit which is sought to be canceled.

B. Montana Proposed Amendments

A BILL FOR AN ACT

Relating to appropriations and transfers of water for instream flow maintenance; creating new provisions; and amending Montana Code [sections] 852-102.

Be It Enacted by the People of the State of Montana:

SECTION 1.

(1) The legislature of the state of Montana hereby declares that appropriations or transfers of water for instream flow purposes are beneficial uses, but shall not require a diversion of water.

(2) Any new application for a permit to make an appropriation of water for instream flow purposes shall be filed pursuant to section 85-2302, Montana Code and shall be subject to all other provisions of Chapter 85, Part 3, Montana Code.

(3) Any application for a transfer of water to instream flow purposes shall be filed pursuant to, and is subject to the provisions of, section 85-2402, Montana Code. The application must:

(a) include specific information on the length and location of the stream reach in which the streamflow is to be maintained or enhanced; and

(b) provide a detailed streamflow measuring plan that describes the points where and the manner in which the streamflow must be measured.

(4) Any right granted under the provisions of this section shall be subject to abandonment under section 85-2-404, Montana Code.

SECTION 2. Section 85-2-102 is amended to read:

Unless the context requires otherwise, in this chapter the following definitions apply:

(1) "Appropriate" means to:

(a) divert, impound, or withdraw (including by stock for stock water) a quantity of water;

(b) in the case of a public agency, to reserve water in accordance with 85-2-316; or

(c) in the case of the department of fish, wildlife, and parks, to lease water in accordance with 85-2-436.

(2) "Beneficial use", unless otherwise provided, means:

(a) a use of water for the benefit of the appropriator, other persons, or the public, including but not limited to agricultural (including stock water), domestic, fish and wildlife, instream flow purposes, industrial, irrigation, mining, municipal, power, and recreational uses;

(b) a use of water appropriated by the department for the state water leasing program under 85-2-141 and of water leased under a valid lease issued by the department under 85-2-141; and

(c) a use of water by the department of fish, wildlife, and parks pursuant to a lease authorized under 85-2-436.

(3) "Board" means the board of natural resources and conservation provided for in 2-15-3302.

(3) (4) "Certificate" means a certificate of water right issued by the department.

(4) (5) "Change in appropriation right" means a change in the place of diversion, the place of use, the purpose of use, or the place of storage. (6) "Commission" means the fish, wildlife, and parks commission provided for in 2-15-3402.

(6) (7) "Correct and complete" means that the information required to be submitted conforms to the standard of substantial credible information and that all of the necessary parts of the form requiring the information have been filled in with the required information.

(7) (8) "Declaration" means the declaration of an existing right filed with the department under section 8, Chapter 452, Laws of 1973.

(8) (9) "Department" means the department of natural resources and conservation provided for in Title 2, chapter 15, part 33.

(9) (10) "Existing right" means a right to the use of water which would be protected under the law as it existed prior to July 1, 1973.

(10) (11) "Ground water" means any water that is beneath the ground surface.

(12) "Instream flow purposes" means any use of water required for the protection of fish and wildlife habitat, aquatic life, recreation, aesthetic beauty, transportation and navigation values, and water quality.

(11) (13) "Late claim" means a claim to an existing right forfeited pursuant to the conclusive presumption of abandonment under 85-2-226.

(12) (14) "Permit" means the permit to appropriate issued by the department under 85-2-301 through 85-2-303 and 85-2-306 through 85-2-314.

(13) (15) "Person" means an individual, association, partnership, corporation, state agency, political subdivision, the United States or any agency thereof, or any other entity.

(14) (16) "Political subdivision" means any county, incorporated city or town, public corporation, or district created pursuant to state law or other public body of the state empowered to appropriate water but not a private corporation, association, or group.

(15) (17) "Salvage" means to make water available for beneficial use from an existing valid appropriation through application of water-saving methods.

(16) (18) "Substantial credible information" means probable believable facts sufficient to support a reasonable legal theory upon which the department should proceed with the action requested by the person providing the information.

(17) (19) "Waste" means the unreasonable loss of water through the design or negligent operation of an appropriation or water distribution facility or the application of water to anything but a beneficial use.

(18) (20) "Water" means all water of the state, surface and subsurface, regardless of its character or manner of occurrence, including but not limited to geothermal water, diffuse surface water, and sewage effluent.

(19) (21) "Watercourse" means any naturally occurring stream or river from which water is diverted for beneficial uses. It does not include ditches, culverts, or other manmade waterways.

(20) (22) "Water division" means a drainage basin as defined in 3-7102.

(21) (23) "Water judge" means a judge as provided for in Title 3, chapter 7.

(22) (24) "Water master" means a master as provided for in Title 3, chapter 7.

(24) (25) "Well" means any artificial opening or excavation in the ground, however made, by which ground water is sought or can be obtained or through which it flows under natural pressures or is artificially withdrawn.

C. Oregon Proposed Amendments

A BILL FOR AN ACT

Relating to appropriations and transfers of water for instream flow maintenance; amending Oregon Revised Statutes [subsections] 537.332, 537.336, 537.338, & 537.341; and repealing Oregon Revised Statutes [subsections] 537.352 & 537.354. .

Be It Enacted by the People of the State of Oregon:

SECTION 1. Section 537.332 is amended to read:.

As used in ORS 537.332 to 537.360:

(1) "In-stream" means within the natural stream channel or lake bed or place where water naturally flows or occurs.

(2) "In-stream flow" means the minimum quantity of water necessary to support the public use requested by an agency.

(3) "In-stream water right" means a water right held in trust by the Water Resources Department for the benefit of the people of the State of Oregon by any person to maintain water in-stream for public use. An instream water right does not require a diversion or any other means of physical control over the water.

(4) "Public benefit" means a benefit that accrues to the public at large rather than to a person, a small group of persons or to a private enterprise.

(5) "Public use" includes but is not limited to:

(a) Recreation;

(b) Conservation, maintenance and enhancement of aquatic and fish life, wildlife, fish and wildlife habitat and any other ecological values;

(c) Pollution abatement; or

(d) Navigation.

SECTION 2. Section 537.336 is amended to read:

(1) The State Department of Fish and Wildlife may request the Water Resources Commission to issue water right certificates for in-stream water rights on the waters of this state in which there are public uses relating to the conservation, maintenance and enhancement of aquatic and fish life, wildlife and fish and wildlife habitat. The request shall be for the quantity of water necessary to support those public uses as recommended by the State Department of Fish and Wildlife.

(2) The Department of Environmental Quality may request the Water Resources Commission to issue water right certificates for in-stream water rights on the waters of this state to protect and maintain water quality standards established by the Environmental Quality Commission under ORS 468B.048. The request shall be for the quantity of water necessary for pollution abatement as recommended by the Department of Environmental Quality.

(3) The State Parks and Recreation Department may request the Water Resources Commission to issue water right certificates for in stream water rights on the waters of this state in which there are public uses relating to recreation and scenic attraction. The request shall be for the quantity of water necessary to support those public uses as recommended by the State Parks and Recreation Department.

(4) Any other person may request the Water Resources Commission to issue water right certificates for in-stream water rights on the waters of this state in which there are public uses as defined in this chapter. The request shall be for the quantity of water necessary to support those public uses.

(4) (5) Any request for an in-stream water right to be supplied from stored water shall refer to the reservoir for a supply of water and shall show by documentary evidence that an agreement has been entered into with the owners of the reservoir for a sufficient interest in the reservoir to impound enough water for the purposes set forth in the request.

SECTION 3. Section 537.338 is amended to read:

The Water Resources Commission by rule shall establish standards, criteria and procedures by which a state agency or any other person included under ORS 537.336 may request an in-stream water right to be issued under ORS 537.336.

SECTION 4. Section 537.341 is amended to read:

Subject to the provisions of ORS 537.343, the Water Resources Commission shall issue a certificate for an in-stream water right. The in-stream water right shall date from the filing of the application with the commission. The certificate shall be in the name of the Water Resources Department as trustee for the people of the State of Oregon state agency or person requesting the right and shall be issued by the commission according to the procedures established under ORS 537.338. The commission shall forward a copy of each certificate issued under this section to the state agency or person requesting the in-stream water right. A certificate for an in-stream water right supplied by stored water shall refer to the reservoir described in the request filed under ORS 537.336.

SECTION 5. Section 537.352 [Precedence of uses] is repealed.

SECTION 6. Section 537.354 [In-stream water right subject to emergency water shortage provisions] is repealed.

D. Washington Proposed Amendments

A BILL FOR AN ACT

Relating to appropriations and transfers of water for instream flow maintenance; creating new provisions; and amending Revised Code of Washington [subsections] 90.03.260 & 90.03.380.

Be It Enacted by the People of the State of Washington:

SECTION 1.

(1) The legislature of the state of Washington hereby declares that appropriations or transfers of water for instream flow purposes are beneficial uses, but shall not require a diversion of water.

(2) The term "instream flow purposes" includes, but is not limited to, any use of water required for the protection of fish and wildlife habitat, aquatic life, recreation, aesthetic beauty, transportation and navigation values, and water quality.

(3) Any new application for a permit to make an appropriation of water for instream flow purposes shall be filed pursuant to section 90.03.260, Revised Code of Washington.

(4) Any application for a transfer of water to instream flow purposes shall be filed pursuant to, and is subject to the provisions of, section 90.03.380 Revised Code of Washington.

(5) Any right granted under the provisions of this section shall be subject to relinquishment under section 90.14.130, Revised Code of Washington.

SECTION 2. Section 90.03.260 is amended to read:

Each application for permit to appropriate water shall set forth the name and post office address of the applicant, the source of water supply, the nature and amount of the proposed use, the time during which water will be required each year, the location and description of the proposed ditch, canal, or other work, the time within which the completion of the construction and the time for the complete application of the water to the proposed use. If for agricultural purposes, it shall give the legal subdivision of the land and the acreage to be irrigated, as near as may be, and the amount of water expressed in acre feet to be supplied per season. If for power purposes, it shall give the nature of the works by means of which the power is to be developed, the head and amount of water to be utilized, and the uses to which the power is to be applied. If for construction of a reservoir, It shall give the height of the dam, the capacity of the reservoir, and the uses to be made of the impounded waters. If for municipal water supply, it shall give the present population to be served, and, as near as may be, the future requirement of the municipality. If for mining purposes, it shall give the nature of the mines to be served and the method of supplying and utilizing the water; also their location by legal subdivisions. If for instream purposes, it shall give the beginning and endpoints of the right and the beneficial use that the right will support. All applications shall be accompanied by such maps and drawings, in duplicate, and such other data, as may be required by the department, and such accompanying data shall be considered as a part of the application.

SECTION 3. Section. 90.03.380 is amended to read:

The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the same is used: PROVIDED, HOWEVER: That said right may be transferred to another or to others and become appurtenant to any other land or place of use, although rights for instream flow need not be appurtenant to land, without loss of priority of right theretofore established if such change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if such change can be made without detriment or injury to existing rights. Before any transfer of such right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department, and said application shall not be granted until notice of said application shall be published as provided in RCW 90.03.280. If it shall appear that such transfer or such change may be made without injury or detriment to existing rights, the department shall issue to the applicant a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant may be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water.

If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other land owners or impair the financial integrity of either of the districts.

A change in place of use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of the jurisdiction of the joint board and the change can be made without detriment or injury to existing rights.

This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070. (1) The Northwest Power Planning Council estimated fish and wildlife program costs in 1993 alone to be between $180 and $210 million. Northwest Power Planning Council, 1 Strategy for Salmon 32 (1992).

(2) In the last 100 years, salmon runs on the Columbia River system have declined from between 10 to 16 million fish a year to approximately 2.5 million, most of which are hatchery fish. Id. at 5.

(3) Dams, hatcheries, overfishing, logging, mining, and livestock grazing all take their toll. Id. at 10.

(4) Id.; see also Charles F. Wilkinson, Crossing the Next Meridian: Land, Water, and the Future of the West 192-93, 264-65 (1992); Joan Laatz Jewett, River of Ghosts: Choices for the Future, The Oregonian, October 29, 1995, at S6.

(5) See Northwest Power Planning Council, 2 Strategy for Salmon 23, 93-94 (1992).

(6) Wilkinson, supra note 4, at 264-65. For an excellent history of the West's gradual depletion of water supplies, see Marc Reisner, Cadillac Desert (1986).

(7) For the purposes of this Article, "holding" means that the entity that acquires the private right enjoys control over that right, including the ability to retain the water rights certificate and the authority to request enforcement. Holding is significant because, for example, in Oregon the Water Resources Department interprets Oregon's statute to require any person who converts or appropriates water for instream purposes to transfer the certificate to the state. See infra notes 97-101 and accompanying text. Under that interpretation, once the right is turned over to the state, the donor loses standing to demand enforcement. See infra text accompanying note 126.

(8) For the purposes of this Article, "nonconsumptive" or "nonextractive" means any use that seeks to leave water instream for environmental or recreational purposes. Although water rights for hydropower generation are not technically consumptive uses, the hydropower dam alters flow regimes in such a way that the net effect on native fish and wildlife is almost always negative. Michael C. Blumm & Andy Simrin, The Unraveling of the Parity Promise: Hydropower, Salmon, and Endangered Species Protection in the Columbia Basin, 21 Envtl. L. 657, 664 (1991); M. Curtis Whittaker, The Federal Hydropower Act and Hydropower Development: Rediscovering State Regulatory Powers and Responsibilities, 10 Harv. Envtl. L. Rev. 135, 135 n.3 (1986). Consequently, water rights for hydropower dams can be considered consumptive because they destroy, and thus "consume," important habitat.

(9) See infra Part II.

(10) See Oregon Water Trust, Water Rights Acquisition Strategy, 1995-1997, at 20-21 (1995).

(11) Exceptions exist in those areas where tribal and federal jurisdiction come into play, such as interstate waters. See generally Carl Erhardt, The Battle Over "The Hooch" The Federal-Interstate Water Compact and the Resolution of Rights in the Chattahoochee River, 11 Stan. Envtl. L.J. 200 (1992) (discussing federal resolution of interstate water disputes); Sylvia Liu, Comment, American Indian Reserved Water Rights: The Federal Obligation to Protect Tribal Water Resources and Tribal Autonomy, 25 Envtl. L. 425 (1995) (advocating a broad interpretation of tribal water rights).

(12) See infra Part II.

(13) The public trust is "a public property right of access to certain public trust natural resources for various public purposes." Harrison C. Dunning, The Public Trust: A Fundamental Doctrine of American Property Law, 19 Envtl. L. 515, 519 (1989); see also Michael C. Blumm, Public Property and the Democratization of Western Water Law: A Modern View of the Public Trust Doctrine, 19 Envtl. L. 573 (1989); Joseph L. Sax, The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention, 68 Mich. L. Rev. 471 (1970); Charles F. Wilkinson, The Headwaters of the Public Trust, 19 Envtl. L. 425 (1989).

(14) See Michael C. Blumm & Thea Schwartz, Mono Lake and the Evolving Public Trust in Western Water, 37 Ariz. L. Rev. 701, 727-33 (1995).

(15) Wilkinson, supra note 4, at 232.

(16) See, e.g., Oregon Water Resources Department, 1 Water Availability for Oregon's Rivers and Streams 12 (1991); Matthew J. McKinney, Instream Flow Policy in Montana: A History and Blueprint for the Future, 11 Pub. Land L. Rev. 81, 81-82 nn.3-4 (1990).

(17) Act of May 26, 1955, ch. 707, 1955 Or. Laws 924 (codified as amended at Or. Rev. Stat. [sections] 536.325 (1995)).

(18) For example, many water rights in Oregon predate even the creation of the water code in 1909. See Joseph Q. Kaufman, An Analysis of Developing Instream Water Rights in Oregon, 28 Willamette L. Rev. 285, 295 (1992).

(19) See infra notes 46-47 and accompanying text.

(20) Oregon established the Northwest's first minimum streamflow law in 1955. 1955 Or. Laws 924 (codified as amended at Or. Rev. Stat. [sections] 536.325 (1995)).

(21) Richard Ausness, Water Rights, The Public Trust Doctrine, and the Protection of Instream Uses, 1986 U. Ill. L. Rev. 407, 419; Anthony Scott, The Evolution of Water Rights, 35 Nat. Resources J. 821, 955 (1995).

(22) Ausness, supra note 21, at 420. A physical diversion was the only means by which other appropriators could be put on notice of the rights of the senior appropriator. See Margaret Z. Ferguson, Note, Instream Appropriations and the Dormant Commerce Clause: Conserving Water for the Future, 75 Geo. L.J. 1701, 1708 (1987). An exception to this rule has been carved out for hydropower generation, however, because the hydropower dam serves to give other potential appropriators notice of the prior water right.

(23) See infra Part II.

(24) See infra Part III.A.

(25) See infra Part III.C.

(26) But see Christopher H. Meyer, Instream Flows: Integrating New Uses and New Players Into the Prior Appropriation System, in Instream Flow Protection in the West, 2-1, 2-2 (Lawrence J. MacDonnell & Teresa A. Rice eds., 2d ed. 1993), for how instream rights do fit in.

(27) See infra Part III.D.

(28) Nevada also arguably allows entities other than the state to hold instream rights because of the ruling in State v. Morros, 766 P.2d 263 (Nev. 1988), which affirmed the grant of a water appropriation permit to the United States Bureau of Land Management for public recreation purposes. Instream rights in Arizona rest on a similar judicial interpretation in McClellan v. Jantzen, 547 P.2d 494 (Ariz. Ct. App. 1976). In McClellan, the court held that stocking a lake with fish does not constitute an appropriation of water that interferes with a prior vested right and thus it does not require a permit from the state. Id. at 496. This Article will concentrate on Arizona because that state has developed a much more detailed process for establishing private instream rights than has Nevada.

(29) Act of Mar. 16, 1949, ch. 112, 1949 Wash. Laws 253, repealed by Act of February 8, 1955, ch. 12, 1955 Wash. Laws 42 (recodifying relevant provisions of original Act at WASH. Rev. Code [sections] 75.20.050).

(30) See Kenneth O. Slattery & Robert F. Barwin, Protecting Instream Resources in Washington State, in Instream Flow Protection in the West, supra note 26, at 20-3.

(31) Act of May 23, 1969, ch. 284, 1969 Wash. Laws 2787 (codified at Wash. Rev. Code [subsections] 90.22.010-90.22.060 (1996)).

(32) Wash. Rev. Code [sections] 90.54.010 (1996).

(33) Id. [sections] 90.03.247.

(34) Id. [sections] 90.22.010.

(35) Id. [sections] 90.22.020.

(36) Id. [sections] 90.03.345

(37) See, e.g., Wash. Admin. Code [subsections] 173-563-075, 173-563-090 (1995) (requiring administrative review of instream flow rules for the mainstem Columbia "whenever new information, changing conditions, or statutory modifications make it necessary to consider revisions").

(38) Department of Ecology v. Public Util. Dist. No. 1 of Jefferson County, 849 P.2d 646 (Wash. 1993), aff'd, 511 U.S. 700 (1994).

(39) Wash. Rev. Code [subsections] 90.42.005-90.42.900, 90.38.005-90.38.902 (1996).

(40) Id. [sections] 90.42.080.

(41) "Net water savings" are "the amount of water that is determined to be conserved and usable within a specified stream reach or reaches for other purposes without impairment or detriment to water rights existing at the time that a water conservation project is undertaken, reducing the ability to deliver water, or reducing the supply of water that otherwise would have been available to other existing water uses." Id. [sections] 90.42.020(2).

(42) Id. [sections] 90.42.030

(43) Telephone Interview with Rachael Paschal, Executive Director, Center for Environmental Law & Policy, Seattle, Wash. (Mar. 28, 1996).

(44) Id.

(45) The last instream flows were set on the Puyallup River Basin and the Chehalis River Basin and were filed June 9, 1988. See Wash. Admin. Code [subsections] 73-509-030, 173-522-020 (1995). Certain stream and lakes in the Snake River Basin were closed to further appropriations effective December 20, 1991. Id. [sections] 173-548-050.

(46) Act of Feb. 25, 1925, ch. 83, 1925 Idaho Sess. Laws 117 (codified as amended at Idaho Code [subsections] 67-4301 to 67-4303 (1995)). Idaho's appropriation can be distinguished from Oregon's legislative withdrawal because the action by the Idaho legislature resulted in the issuance of a water rights certificate. Id. There may be little difference in effect, other than that the people of Idaho might have standing to challenge the state's decision to abandon a water right secured by a certificate, which is essentially a property right held in trust for the people of Idaho. By contrast, a legislative withdrawal can easily be reversed in the next legislative session. Arguably, the legislature could also choose to legislatively overturn a water right, but such an action might require constitutional compensation.

(47) Steven J. Shupe & Lawrence J. MacDonnell, Recognizing the Value of In-Place Uses of Water in the West: An Introduction to the Laws, Strategies, and Issues, in Instream Flow Protection in the West, supra note 26 at 1-1, 1-6.

(48) Act of Mar. 29, 1978, ch. 345, 1978 Idaho Sess. Laws 884 (codified as amended at Idaho Code [subsections] 42-1501 to 42-1505 (1996)).

(49) Idaho Code [sections] 42-1503 (1996).

(50) Id. [sections] 42-1502(f)

(51) Id. [sections] 42-1503.

(52) Id. [sections] 42-1505

(53) Id. [section] 42-1503.

(54) Id.

(55) Id.

(56) See id. [subsections] 42-202 to 42-203A, 42-217 to 42-219.

(57) Jeffrey C. Fereday et al., Handbook on Idaho Water Law 22 (Preliminary Release, Dec. 1992) (available from Givens Pursley & Huntley, L.L.P., Boise, Idaho).

(58) Idaho Const. art. XV, [sections] 3.

(59) State of Idaho, Dep't of Parks v. Idaho Dep't of Water Admin., 530 P.2d 924 (Idaho 1975).

(60) Id. at 928.

(61) Fereday et al., supra note 57, at 22.

(62) Meyer, supra note 26, at 2-11.

(63) Id.

(64) Telephone Interview with Elizabeth Paul, Associate Director, Idaho Rivers United (May 23, 1996).

(65) McKinney, supra note 16, at 86. "Murphy rights" were so named for the author of the bill that created them. Id.

(66) Id.

(67) Mont. Code Ann. [sections] 89-801 (repealed 1973). The full text of the repealed section may be found in the annotations to Mont. Code Ann. [sections] 85-2-150 (1994).

(68) McKinney, supra note 16, at 86.

(69) Montana Water Use Act of 1973, ch. 452, 1973 Mont. Laws 1121 (codified as amended at Mont. Code Ann. [sections] 85-2-316 (1995)).

(70) Mont. Code Ann. [sections] 85-2-316(1), (6) (1995).

(71) Id. [section] 85-16(3)

(72) Id. [sections] 85-2-316(10)

(73) Act of March 31, 1995, ch. 322, 1995 Mont. Laws 990, codified at Mont. Code Ann. [sections] 85-2-408 (1995).

(74) Mont. Cose Ann. [sections] 85-2408(2)(a)(ii) (1995).

(75) Id. [sections] 85-2-408(2)(b)

(76) Id. [subsections] 85-2-408(1), 85-2-407(2).

(77) See Matthew J. McKinney, Instream Flow Policy in Montana: A History and Blueprint for the Future, in Instream Flow Protection in the West, supra note 26, at 15-33 (reprinted and updated from 11 Pub. Land L. Rev. 81(1990)).

(78) Telephone Interview with Steven Dougherty, Minority Whip, Montana House of Representatives (Mar. 28, 1996).

(79) Id.

(80) Id.

(81) Id.

(82) Telephone Interview with Liter Spence, Instream Flow Coordinator, Montana Dept. of Fish, Wildlife & Parks (Feb. 14, 1996).

(83) Id.

(84) Id.

(85) Id.

(86) Id.

(87) Id.

(88) Act of Feb. 9, 1915, ch. 36, 1915 Or. Laws 49 (codified as amended at Or. Rev. Stat. [sections] 538.200 (1995)).

(89) Act of May 26, 1955, ch. 707, 1955 Or. Laws 924 (codified as amended at Or. Rev. Stat. [sections] 536.325 (1995)).

(90) Or. Rev. Stat. [sections] 536.325(3) (1995). (91) Michael J. Mattick, Instream Flow Protection in Oregon, in Instream Flow Protection in the West, supra note 26, at 18-1.

(92) Id.

(93) Act of July 20, 1987, ch. 859, 1987 Or. Laws 1757 (codified as amended at Or. Rev. Stat. [sections] 537.350 (1995)).

(94) Id. This section also provides that instream rights are subject to the abandonment provisions of Or. Rev. Stat. [subsections] 540.610-540.650 (1995).

(95) Or. Rev. Stat. [sections] 537.346 (1995).

(96) Id. [sections] 537.348(1)

(97) Id. [sections] 537.332(3)

(98) Id. [sections] 537.110.

(99) Telephone Interview with Mike McCord, Natural Resource Specialist, Oregon Water Resources Department (May 17, 1996).

(100) Minutes of the Joint Committee on Water Policy, Work Session on Senate Bill 140, 64th Sess. 7 (Or. 1987).

(101) Id. at 8.

(102) See Bonneville Power Admin., Skyline Farms Purchase Option and Water Use Agreement (July 11, 1994) (on file with author).

(103) Bonneville Power Admin., Short Term Water Right Lease Agreement for a Lease of Existing Water Rights for Instream Use (June 13, 1995) (on file with author).

(104) See Janis E. Carpenter, Enforcement of Instream Water Rights, at 10-11 (Northwest Water Law & Policy Project ea., 1995) (available from Northwest Water Law & Policy Project, Northwestern School of Law of Lewis & Clark College, 10015 SW Terwilliger Blvd., Portland OR 97217, [phone]).

(105) Telephone Interview with Phillip Key, Office of General Counsel, Bonneville Power Administration (Feb. 14, 1996).

(106) Id.

(107) Telephone Interview with Andrew Purkey, Executive Director, Oregon Water Trust (Feb. 14, 1996).

(108) Id.

(109) Id.

(110) Telephone Interview with Mike McCord, supra note 99.

(111) Telephone Interview with Andrew Purkey, supra note 107.

(112) Or. Admin. R. 690-516-001 (1995)

(113) See Slattery & Barwin, supra note 30, at 20-4.

(114) Act of Mar. 29, 1978, ch. 345, 1978 Idaho Sess. Laws 884 (codified as amended at Idaho Code [subsections] 42-1501 to 42-1505 (1996)).

(115) Montana Water Use Act, ch. 452, 1973 Mont. Laws 1121 (codified as amended at Mont. Code Ann. [sections] 85-2-316 (1995)).

(116) See McKinney, supra note 16, at 15-7.

(117) Id.

(118) Or. Rev. Stat. [sections] 537.352 (1995).

(119) Mont. Code Ann. [sections] 89-801(2) (repealed by Montana Water Use Act of 1973, ch. 452, 1973 Mont. Laws 1121 (codified as amended at Mont. Code Ann. [sections] 85-2-316 (1995))). Although the statute authorizing Murphy rights was repealed in 1973, the rights obtained by the Montana Department of Fish, Wildlife, and Parks survived the repeal and are the most senior instream rights in Montana. See McKinney, supra note 16, at 86.

(120) Telephone Interview with Mark Liverman, Instream Flow Coordinator. Oregon Department of Fish & Wildlife (Feb. 14, 1996).

(121) Telephone Interview with Liter Spence, supra note 82.

(122) Telephone Interview with Cynthia Nelson, Water Resources Planner, Washington Department of Ecology (June 14, 1996).

(123) Telephone Interview with Cindy Robertson, Instream Flow Coordinator, Idaho Department of Fish and Game (June 13, 1996).

(124) Oregon Water Resources Dep't, Internal Management Directive for Establishing Enforcement Priorities (Mar. 12, 1993) (on file with author).

(125) Oregon Water Resources Comm'n & Water Resources Dep't, 1995-1999 Strategic Water Resource Management Plan 51-52 (1995).

(126) Carpenter, supra note 104, at 18-21; see, e.g., Idaho Code [sections] 42-608 (1996); Mont. Code Ann. [sections] 85-5-101(1) (1995); Or. Rev. Stat. [sections] 540.045 (1995).

(127) See Lori Potter, The Public's Role in the Acquisition and Enforcement of Instream Flows, 23 Land & Water L. Rev. 419, 424-25 (1988).

(128) See Or. Rev. Stat. [sections] 536.025 (1995).

(129) See Carpenter, supra note 104, at 18-21. Carpenter offers an excellent synopsis of the laws governing Northwest watermasters.

(130) Telephone Interview with Jim Myron, Conservation Director, Oregon Trout, Inc. (Feb. 14, 1996).

(131) Id.

(132) Id.; see also Oregon Trout file on Logan Valley (available from Oregon Trout, Inc., Portland Or.).

(133) Telephone Interview with Jim Myron, supra note 130.

(134) Wash. Rev. Code [sections] 9.22.020 (1996).

(135) Telephone Interview with Cindy Robertson, supra note 123.

(136) See supra text accompanying notes 34, 50, 73, 97.

(137) Telephone Interview with Cindy Robertson, supra note 123.

(138) Wash. Admin. Code [subsections] 173-563-075, 173-563-090 (1995).

(139) See id. [subsections] 173-500-010 to 173-592-115.

(140) See supra notes 112-39 and accompanying text.

(141) Meyer, supra note 26, at 2-13.

(142) Id.

(143) See supra text accompanying note 126.

(144) See Carpenter, supra note 104, at 18-19.

(145) See Idaho Code [sections] 42-608 (1996); Mont. Code Ann. [sections] 85-5-101(1) (1995); Or. Rev. Stat. [sections] 540.045 (1995)

(146) See Carpenter, supra note 104, at 19-20.

(147) Telephone Interview with Andrew Purkey, Executive Director, Oregon Water Trust (Feb. 12, 1996).

(148) Id.

(149) Id.

(150) See supra text accompanying note 121.

(151) In the contested case proceeding, U.S. Generating proposed a new natural gas-fueled cogeneration plant in Hermiston, Oregon. Richard Cockle, Company Gets OK For Plant Site, The Oregonian, Mar. 15, 1994, at B18. The Don't Waste Oregon Committee and the Columbia Basin Institute challenged the proposal. Id. The dispute was settled when U.S. Generating agreed to donate $1.5 million to Don't Waste Oregon and $500,000 to the Columbia Basin Institute, which in turn donated its share to the Trust. Richard Cockle, Expert Hired By Water Trust, The Oregonian, June 9, 1995, at D7.

The lawsuit claimed that Georgia-Pacific's Toledo plant was violating clean water laws by dumping waste chemicals into the ocean and the Yaquina River. Kathleen Monje, Coalition Files Suit Against Toledo Mill, The Oregonian, Feb. 23, 1994, at B12; see also Oregon Natural Resources Council, Inc. v. Georgia Pacific, No. 94-6082-TC (D. Or. Jul. 7, 1995). It is important to note, however, that such large settlements may not always occur and so the average yearly acquisition budget could be considerably less.

(152) John T. Daubert & Robert A. Young, Recreational Demands for Maintaining Instream Flows: A Contingent Valuation Approach, 63 Am. J. Agric. Econ. 666, 673 (1981). For an analysis of the cost of acquiring irrigation water, see Montana Dep't of Fish, Wildlife & Parks, Market Value of Agricultural Water Leased for Instream Flows (1991).

(153) Twenty percent of Nature Conservancy assets come from memberships, while sixty percent come from gifts from private individuals. The annual operating budget in Oregon is roughly $2 million per year. Telephone Interview with Russ Pinto, Director of Land Protection, The Nature Conservancy, Portland, Or. (June 14, 1996).

(154) Id.

(155) Telephone Interview with Andrew Purkey, supra note 107. These figures are estimates based on limited data because the market in instream rights is new and relatively limited. Id.

(156) This amount represents solely the price paid for the lease. Estimated transaction costs were $385 for staff time, fax, telephone, etc. Id. On long-term leases, which require an administrative transfer, additional costs include a $400 application fee and between $500 to $1500 for a water rights examiner. Id.

(157) See Northwest Water Law & Policy Project, Oregon Conservation Group Leases Water Rights, Big River News, Fall 1994, at 8 (describing the ecological and economic impacts of this lease).

(158) Telephone Interview with Andrew Purkey, supra note 107.

(159) See Paul Hammel, Hearings on Platte Flows Underway, Nebraska Official Says Instream Use for Wildlife Would Not Affect Irrigators, Omaha World Herald, Sept. 26, 1996, at 15SF; Brian Morris, When Rivers Run Dry Under a Big Sky: Balancing Agricultural and Recreational Claims to Scarce Water in the American West, 11 Stan. Envtl. L.J. 259, 275 (1992). (160) See Meyer, supra note 26, at 2-3 to 2-5; Telephone Interview with Liter Spence, supra note 82.

(161) Potter, supra note 127, at 438.

(162) See, e.g., Idaho Code [sections] 42.108 (1996); Or. Rev. Stat. [sections] 537.160 (1995); Wash. Rev. Code [sections] 90.03.290 (1996).

(163) See Meyer, supra note 26, at 2-2 to 2-5, 2-11 to 2-12. Meyer offers a very useful example to demonstrate the mechanics of instream flows.

(164) Id.

(165) Potter, supra note 127, at 438 (citing Arizona Nature Conservancy Chapter of the Nature Conservancy, No. 33-78419, 33-78421 (Dep't. of Water Resources April 29, 1983) (Decision and Order) at 8).

(166) Id.

(167) Meyer, supra note 26, at 24 to 2-5.

(168) See infra text accompanying notes 186-187, 201.

(169) 16 U.S.C. [subsections] 1531-1544 (1994).

(170) A conservation group recently mounted a successful challenge in federal district court to the refusal of the U.S. Fish and Wildlife Service to list the bull trout as an endangered species. Jonathan Brinckman, Agency Takes Second Look at Listing of Bull Trout, The Oregonian, Jan. 16, 1997, at E3. The agency decided not to appeal the decision and is currently reevaluating its decision. Id.

(171) See 4 Waters and Water Rights [subsections] 37.04-37.04(c)(2) (Robert E. Beck et al. eds., 1991 & Supp. 1995) (discussing various aspects of federal and Indian reserved water rights, including the McCarran Amendment, federal jurisdiction, and Indian settlements).

(172) See generally Blumm & Schwartz, supra note 14 (discussing court decisions in the western states involving the public trust doctrine and water rights).

(173) In Montana, voters recently defeated a proposed initiative that would have imposed stricter water quality standards on water discharged by metal mines. Clair Johnson, NPRC Celebrates 25 Years as Resource Conservation Advocate, The Billings Gazette, Nov. 13, 1996, at 1D. In the same election, Oregon citizens rejected the Clean Streams Initiative, which would have restricted cattle grazing in streams listed as water quality limited by the state. See Bill Marlett, The Case for the Oregon Clean Stream Initiative, Big River News, Spring 1996, at 8 (discussing some Oregonians' push for cleaner streams and rivers); Bill Graves, Measures on Ballot Go Down In Defeat, The Oreginian, Nov. 6, 1996, at C1.

(174) See generally Ray Rasker, The Wilderness Society, a New Home on The Range: Economic Realities in the Columbia River Basin (1995) (discussing the changes in how the Northwest's natural resources contribute to the economic life of its residents, focusing more on environmental quality than natural resource consumption); Economic Well-Being and Environmental Protection in the Pacific Northwest: A Consensus Report by Pacific Northwest Economists (T.M. Power ea., 1995) (discussing the economic transition in the Northwest toward industries and jobs that value increased environmental protection and away from natural-resource industries).

(175) Telephone Interview with Andrew Purkey, supra note 107.

(176) Id.

(177) Id.

178 Id.

(179) Janelle Schmidt, Instream Water Rights in Oregon: To Hold or Not to Hold? 11-14 (May 1996) (on file with the Oregon Water Trust).

(180) Tom Walker, Remarks at the Workshop "Water Resources . . . What's Next?" sponsored by GeoEngineers, Miller, Nash, Wiener, Hager & Carlsen, and W&H Pacific, Workshop Notebook at ch. 7, p. 6 (1995).

(181) Act of Mar. 24, 1941, ch. 84, 1941 Ariz. Sess. Laws 179 (codified as amended at Ariz. Rev. Stat. [sections] 45-151 (1994)).

(182) Act of Mar. 23, 1962, ch. 113, [sections] 1, 1962 Ariz. Sess. Laws 265 (codified as amended at Ariz. Rev. Stat. [sections] 45-151 (1994)).

(183) McClellan v. Jantzen, 547 P.2d 494, 496 (Ariz. App. 1976).

(184) Herb Dishlip, Instream Flow Water Rights: Arizona's Approach, in Instream Flow Protection in the West, supra note 26, at 10-2.

(185) Id. at 10-4. The Nature Conservancy "proved up" the right by submitting several years of streamflow data to ADWR. Id.

(186) Telephone Interview with Joe Stuart, Manager, Surface Water Rights Unit, Arizona Department of Water Resources (Apr. 4, 1996).

(187) Id.

(188) Dishlip, supra note 184, at 10-6 to 10-9.

(189) Ariz. Rev. Stat. [sections] 45-172 (1994)

(190) Dishlip, supra note 184, at 10-1.

(191) Telephone Interview with Robert Wigington, Attorney, The Nature Conservancy (Jan. 30, 1995). Because of the hydrological connection between groundwater and surface water, over-appropriation of groundwater has led many streams and creeks to run far below their historical levels. See Harrison C. Dunning, State Equitable Apportionment of Western Water Resources, 66 Neb. L. Rev. 76, 91 (1987); Douglas L. Grant, The Complexities of Managing Hydrologically Connected Surface Water and Groundwater Under the Appropriation Doctrine, 22 Land & Water L. Rev. 63 (1987).

(192) Telephone Interview with Robert Wigington, supra note 191.

(193) Ariz. Rev. Stat. [sections] 45-172 (Supp. 1996) (stating that water rights may be severed from the land and "transferred for use for irrigation of agricultural lands or for municipal, stock

watering, power, and mining purposes, and to the state or its political subdivisions for use for recreation and wildlife purposes, including fish"). (194) Telephone Interview with Robert Wigington, supra note 191.

(195) Id.

(196) Alaska's approach can be distinguished from Arizona's, in that the word "instream" never appears in the Arizona statute. Appropriations in Arizona must be made specifically for "wildlife" or "recreation" and cannot be made for general instream flow protection purposes. See Ariz. Rev. Stat. [sections] 45-151 (1994).

(197) Alaska Stat. [sections] 46.15.145(a) (Michie 1995).

(198) Id.

(199) Id. [sections] 46.15.145(c)

(200) Telephone Interview with Christopher Estes, Instream Flow Coordinator, Alaska Dep't of Fish & Game (Jan. 4, 1996).

(201) Id.

(202) Id.

(203) Alaska Admin. Code tit. XI, [sections] 93.145 (1995). The adjudication process is designed to assist the commissioner of the Department of Natural Resources in making the findings