Chapter 2 THE PURPOSEFUL TENSION WITHIN THE DOCTRINE OF BENEFICIAL USE
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THE PURPOSEFUL TENSION WITHIN THE DOCTRINE OF BENEFICIAL USE
I. Introduction
II. Background
A. Historical Policy Drivers
B. Focus on Use
C. Balance with Certainty
D. Overview of Abandonment
E. Overview of Forfeiture
III. Surveyed States
A. Colorado
1. Establishing a Water Right
2. Nonuse of Water Rights in Colorado: Abandonment
3. Flexibility in Maintaining Water Rights in Colorado
a. Statutory Exceptions
b. Case Law Exceptions
c. Conservation
d. Storage Rights
e. Emergencies
B. Idaho
1. Establishing a Water Right
2. Nonuse of Water Rights in Idaho: Abandonment and Forfeiture
a. Abandonment
b. Forfeiture
3. Flexibility in Maintaining Water Rights in Idaho
a. Statutory Avoidance of Forfeiture
b. Statutory Exceptions to Forfeiture
c. Resumption of Use
d. Tolling of "Forfeiture Clock" in General Stream Adjudication
e. Storage Rights and Carryover Storage
f. Municipal Water Rights
g. Water Supply Bank
h. Drought Emergency
C. Oregon
1. Establishing a Water Right
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2. Nonuse of Water Rights in Oregon: Abandonment and Forfeiture
3. Flexibility in Maintaining Water Rights in Oregon
a. Statutory Exceptions
b. Instream Flow and Temporary Conversion
c. Groundwater Mitigation Banking
D. Washington
1. Establishing a Water Right
2. Nonuse of Water Rights in Washington: Abandonment and Relinquishment
a. Abandonment
b. Relinquishment
3. Flexibility in Maintaining Water Rights in Washington
a. Municipal Water Supply Purposes Exception
b. Determined Future Development Exception
c. Water Right Leasing
d. Trust Water Rights Program
e. Water Banking
f. Storage Rights
g. Emergencies
E. Wyoming
1. Establishing a Water Right
2. Nonuse of Water Rights in Wyoming: Abandonment and Forfeiture
3. Flexibility in Maintaining Water Rights in Wyoming
a. Instream Flow/Leasing
IV. Summary of Trends
V. Conclusion
In the western United States, water law developed around two main principles: (l) the goal of full beneficial use of water, and (2) the need to afford vested water right holders certainty as to their rights. At the time western water codes developed, these goals were seemingly in harmony--rewarding those who needed the water and invested in infrastructure for water use with rights that were enforceable against subsequent appropriators. Over the decades, as water needs and demands were reshaped by changing land use priorities, economics, and technology, these principles began to conflict with each other. Water right holders who had initially beneficially used water, and thus were afforded certainty regarding their future water use through water rights, no longer consistently used the water to which they were entitled. Thus, state water regimes were adjusted to enforce beneficial use requirements through abandonment and forfeiture laws that strive to return to the available "pool" the water rights of those that failed to timely make the investments needed to make or maintain their
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water use. The obligation to show continuing beneficial use of water to avoid relinquishment and abandonment of water rights slowly undermined the certainty of vested water right holders in their water rights and water infrastructure investments.
Critically, the conflict between the certainty demanded by water right holders and the need to show continuing beneficial use began to create a disincentive for water right holders to conserve water, out of fear that they would lose their right to the unused water. Now, when water resources have largely been appropriated and are threatened by climate change, it is increasingly important to incentivize water conservation, rather than treating conservation or nonuse of water as "speculation." In response, state water regimes have gone through yet another period of adjustment to create exceptions for some circumstances of nonuse and to establish programs that promote a non-wasteful, socially and environmentally beneficial use (or nonuse) of water that might otherwise be at risk of forfeiture unless used. This article explores the evolution of western water law as it recognizes and accommodates for these tensions.
[T]he appropriation doctrine developed with a recognition that the ultimate goal of encouraging the fullest beneficial use of water, and the resulting economic development of the West, could not be realized unless water users were provided certainty in the holding and exercise of water rights.1
A sense of anxiety pervades the history of water rights development in the western states. In the 1800s, it was fear of speculation. The privatization of railroads fostered concerns that wealthy monopolists would usurp control of other public resources. It is against this backdrop that throughout the West, states enacted water rights statutes and attempted to eliminate the ability to hold water rights on a speculative basis.2
This "anti-speculation doctrine" is closely related to beneficial use. Beneficial use has been a central tenet of western water law since the early days of mining camps in California and Colorado as part of the prior appropriation system, under which the first person to put the water source
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to beneficial use has superior rights over any future users.3 Today, 18 states use the prior appropriation system or a dual appropriation-riparian system.4 The basic principles of prior appropriation remain the same in each state with four primary components: intent, diversion, beneficial use, and priority.5 An appropriative water right gives the holder the ability to legally take water from a public waterway on the condition that it is applied to beneficial use. From its focus on diversions and vesting of a right after actual use, the beneficial use requirement has grown to encompass states' efforts to determine what types of uses are considered beneficial and the maximum quantity to be appropriated. It has continued to evolve as a test to determine whether ongoing uses are reasonably efficient or wasteful.6
The beneficial use requirement is now well accepted in western water law.7 Prior appropriation states strive to distribute water to those who effectively put it to use without waste and in the public good (as considered at a particular time and in a particular state).
The beneficial use doctrine, and its corollaries, waste and forfeiture, had three original purposes: 1) avoiding speculation and monopoly; 2) maximizing the use of a scarce resource for all; 3) providing flexibility to the water user, thus allowing the user (rather than courts, legislatures, or agencies) to determine appropriate improvements in water use practices except in extreme circumstances.8
Beneficial use of water is not only a requirement for initial appropriation, but an ongoing obligation to maintain a water right. Since water is scarce and subject to many competing demands, nearly all western states implement the "use it or lose it" doctrine, meaning that appropriative rights can be lost in whole or in part by nonuse.9
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The rationale for the doctrine is prevention of the speculative holding of water rights by requiring diligence in the application of water to a beneficial use.
The "use it or lose it" doctrine manifests itself in states' implementation of abandonment and forfeiture laws, under which nonuse of water may result in the loss of the right and in return of such water to the "pool" available for new appropriations unless the stream is so over-appropriated that junior appropriators will use all the relinquished water to fulfill their entitlements.10
Prior to enactment of water codes, one could only lose a vested water right by common law abandonment, which required a finding of nonuse of the water and intent to give it up. Thereafter, water codes in many western states incorporated strict statutory forfeiture provisions under which nonuse of the water for some specified and usually short period of time would result in the loss of the water right, without regard to intent.11 However, in line with the balance of certainty, each state stays that principle if there is a rational explanation for the nonuse.
The issues of forfeiture and abandonment arise in administrative proceedings (in the contexts of new applications, transfers of rights, applications for changes of use or point of diversion) and in court proceedings, including both those commenced on behalf of the public by administrative officials, and those begun as private litigation.12
There is an inevitable tension between the creation of a water right based upon the first instance of beneficial use and the need to develop the infrastructure needed to make use of the water. Promoting capital investment and development of infrastructure can be time-consuming. To provide certainty to a developer while ensuring that such entity does not hoard water resources, states grant conditional water rights (e.g., licenses or preliminary decrees), which require proof that the developer has invested sufficient capital in good faith to place the water to beneficial use.
There is also a tension between the capital investment needed to use water and the threat of the loss of the water right for nonuse when water uses are buffeted by variables like the weather and general or industry-specific economic factors. Once the license, certificate, final decree, or other instrument has been issued, regulators have considered it unfair to immediately revoke that instrument because of circumstances beyond the control of the developer...
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