Best if printed in landscape.
What does a user need to do to acquire a water right?
Prior appropriation doctrine arose in the western US as common law; that is, it was based on legal principles set forth in a series of court decisions, starting in the mid-19th century. States began enacting statutes to codify the common law prior appropriation doctrine decades later, towards the end of the 19th century. The statutes sometimes codified the common law without much change; but on some issues, the statutes clarified, modified, perhaps even redirected some of the common law principles.
The common law (historical) elements for an appropriation under prior appropriation doctrine (authors' notes on pp. 27-29 of Gould's 7th ed.) include
- an intent to appropriate,
- notice of the appropriation,
- compliance with state law,
- a diversion of water, and
- applying the water to a beneficial use within a reasonable time.
The appropriation also needs to specify the source of water, point of diversion, place of use, purpose of use, quantity (flow, volume or both), and priority date. The discussion will first consider the concept of beneficial use.
use shall be the basis, the measure, and the limit of the right to the
use of water. N.D.C.C.
- A water user acquires the right to use water by putting it to a beneficial use (basis).
- The quantity of water the user is entitled to is that which can be put to a beneficial use -- but no more (measure).
- The original purpose or type of use is the only way the water may be used (limit); this limitation also includes source of water, location of uses, and other characteristics of the use.
It needs to be understood at this point that a water user is not prohibited from changing the beneficial use, but the consequence of such a change is that the new use will be considered as arising at the time of the change. Accordingly, the priority of the new or changed use will be based on date of the changed use, and not be based on the date of the original use. A water user risks their legal priority by changing the beneficial use. Other water users who have put water to a beneficial use since the time of the user's original use will now have priority over the user's new or revised use.
Example: Person A puts water to a beneficial use in 1875; Person B puts water to a beneficial use in 1880. Person A has priority over Person B; if there is not enough water for both uses, Person B must discontinue their use so there is enough water for Person A.
If Person A changes the beneficial use in 1900, the legal right that stemmed from 1875 will be treated as terminated. Person A's revised use will be considered as having arisen in 1900. After that time, Person A would have to discontinue the new use if there is not enough water for both Person B and Person A. Person B's 1880 use has priority over Person A's 1900 use.
Person A is not prohibited from changing or expanding their original use (the 1875 use in this example), but the consequence is that any other use arising before the change (such as Person B's 1880 use) will have priority over Person A's 1900 use.
water uses are considered beneficial?
of uses that North Dakota explicitly recognizes -- N.D.C.C.
§61-04-06.1. Are these the only uses recognized in North Dakota as
For example, a water right is required to store water; the requirement of needing a water right is not limited to uses that divert water.
Beneficial use means a use of water for a purpose consistent with the best interests of the people of the state. N.D.C.C. §61-04-01.1(1). This is not an exacting definition, but it is the rule we live with. It is generally defined quite broadly; that is, must uses of water are considered beneficial.
much water can be appropriated for a beneficial use? This relates to the concept that the quantity of water put to a beneficial use is the measure of the user's water right.
of Washington Department of Ecology v. Grimes, Washington, 1993 (p. 34 of Gould's 7th ed.)
- Reasonable use is an element of beneficial use.
- Appellants submitted
five claims for water for domestic, irrigation and recreation purposes.
They requested flow and storage rights.
- Referee recommended
lesser flow and storage rights; court accepted the recommendations;
decision appealed to a higher court.
- Water right is
established and maintained by purposeful application of a quantity of
water to a beneficial use upon the land.
- Beneficial use refers to 1) purpose or type of activities for which the water will
be used, and 2) the amount of water. The amount must be reasonable and
reflect the duty of the water and waste.
- Water duty -- the
amount of water which with careful management and without waste is enough
to meets the needs of the water user.
- Waste -- no appropriation
will be granted for water that will be wasted. "... reasonable and economical
use of the water in view of other present and future demands upon the
source of supply."
- Referee considered
efficiency -- reasonable efficiency -- such as, local custom, relative
efficiency of irrigation systems, costs and benefits of improving the
efficiency of the system that is used in applying the water.
- Property owners/water
right holders have a vested interest in the water right to the extent
it is beneficially used, and includes the right to diversion, delivery,
and application according to usual methods in the vicinity. There is no statutory basis (in Washington) for considering "reasonable efficiency " in determining whether water is being put to a beneficial use.
- The appellate court concluded, however, that the referee did not apply a "reasonable efficiency" test even though the referee mentioned the test in a footnote; the court, therefore, decided that the referee's determination of beneficial use was appropriate.
- A water right is similar to other property rights and is entitled
to legal protection like other property rights. The decision, however, did not "take" their water right because beneficial use
is the limit of the water right. The water that was not granted
would not have been applied to a beneficial use if used as the applicant
had envisioned. Instead, this water would have been more than is reasonably
needed for the proposed use; therefore, this additional water is not
- Courts often rely
on masters, referees, administrative law judges, or similar persons
to assess technical information outside a courtroom setting and then
make recommendations to the court.
notes (pp. 38-41 of Gould's 7th ed.) --
- How to determine
the amount of water needed for a beneficial use? Is the quantity defined or specified in the statute?
- N.D.C.C. §61-04-06.2 -- The state engineer may issue a conditional permit for less than
the amount of water requested, but in no case may the state engineer
issue a permit for more water than can be beneficially used for
the purposes stated in the application -- exceptions discussed later.
- This statute reflects the notion that a water right cannot be granted for more than the quantity that will be put to a beneficial use.
- How is beneficial use applied in determining the amount of water that can be stored? How much water can be stored? One filling? See N.D.A.C. §89-03-01-01.4.
In-stream Use and Diversion
Note the requirement of diversion; also reconsider the non-diversionary uses mentioned in chapter 1. Water law (especially prior appropriation doctrine in the western states) first focused primarily on diversionary uses (e.g., mining and irrigation); we now recognize non-diversionary (e.g., in-stream) uses. At some point in time between establishing our water law and where we are today, there was conflict between a diversionary use and an in-stream use, and the law changed.
Diverting water provided notice of many of the elements needed to establish a water right (e.g., intent, beneficial use, source, point of diversion, place of use, purpose of use, quantity). That is, an appropriator fulfilled most of the required elements by diverting water.
- Of course, a key element was missing, that is, date of beneficial use or priority relative to others appropriating from the same water source. Accordingly, the legal system began relying on the courts to establish priority dates but this system became cumbersome (and perhaps inconsistent) as each appropriator litigated with each other appropriator. The next step to simplify the process was for the courts to adjudicate the water rights (quantity, priority, etc) for all appropriators drawing from the same source (such as a river) in a single judicial action. The legal system was recognizing that the act of diverting water did not provide all the information needed to fulfill the elements of appropriation.
- Diverting water also became less effective as a means of providing notice when non-diversionary uses began to be recognized.
- Diversion v. non-diversionary (in-place) uses -- the rule is changing in some states (an in-place use is recognized as a beneficial use and entitled to the same legal protections as a diversionary use). This change is partially due to "permit systems" (diverting water is no longer needed to provide notice of appropriation) and partially due to a different understanding of "what is a use of water."
Is Diverting Water still an Element of a Water Appropriation?
Does water need to be removed from the river or stream to be considered "appropriated?" The old rule was that the water had to be diverted for a right in the water to arise. More recently, the law is recognizing that "in-stream uses" will be considered appropriations and protected under the law.
Is an in-stream use considered a beneficial use? How does an in-stream use relate to the requirement of diverting water?
Idaho Department of Parks v. Idaho Department of Water Administration, Idaho 1974 (p. 29 of Gould's 7th ed.)
- 1971 legislation defined scenic beauty and recreation uses as a beneficial use of water.
- Department of Parks filed an application for a permit to appropriate water in Malad Canyon.
- Water Users argue that state constitution prohibits a statute that recognizes preservation of aesthetic values and recreation as a beneficial use. They argue that the constitution limits beneficial use to those specified -- domestic, agriculture, mining, manufacturing, and power.
- Court does not interpret constitution as limiting beneficial uses to those specified; instead the statute is an indication of an emerging recognition of social values and benefits from the use of water.
- Concurring opinion: water was being used for other purposes at the time the constitution was adopted, past uses have not been limited to those specified; the legislation recognizes the changing needs of society. Definition of beneficial use must change with changing conditions, but include a requirement of reasonableness.
- Dissenting opinion: in-stream use should not be granted a permit, but instead the impact on scenic and aesthetic values should be a consideration in deciding whether future applications for a permit to divert water should be granted.
The authors' notes (pp. 32-34 of Gould's 7th ed.) address how states have answered several questions about the need to divert water to establish a water right.
- Is an in-stream use a beneficial use?
- The dissent in the preceeding case probably aligns with North Dakota's perspective on granting permits for in-stream uses; that is, permits will not be granted for in-stream uses, but "the effect on fish and game resources and public recreational opportunties" (N.D.C.C. §61-04-06 (4)(c)) will be considered in deciding whether to grant a permit to divert water for a beneficial use.
- Does North Dakota law allow a permit to be granted to divert water for fish, wildlife, and other outdoor recreational uses? See N.D.C.C. §61-04-06.1.
- But see Instream Flows In Washington, Department of Ecology.
- Also see Washington's Chapter 90.22
- Can in-stream appropriations be held by private parties or only by public agencies?
- Can a diversionary use of appropriated water be changed to an in-stream use?
- Can an in-stream appropriation be decreased (we will see that diversionary appropriations can be decreased for specific reasons; should in-stream appropriations be subject to the same rules)?
Nebraska Game and Parks Commission v. The 25 Corporation, Inc. Nebraska, 1990 (not included in Gould's 7th ed.; instead see In Re Adjudication of the Missouri River Drainage Area, Montana, 2002 at p. 24 of Gould's 7th ed.)
- A state agency applied for a permit so the water could be used for in-stream purposes. Another state agency (director of water resources) partially granted the permit on the basis of a state statute. A third party objected to granting the permit arguing that the state constitution prohibits granting a water right without a diversion of the water from its source.
- Issue -- does Nebraska's constitution prohibit water permits for in-stream uses; restated, is a diversion of water necessary for a permit to be granted (without a permit, the water would be considered unappropriated and available for a subsequent user, thereby eliminating any protection for the in-stream purpose).
- Discussion -- Nebraska's constitution does not prohibit in-stream uses. The word "divert" in the state constitution allows water to be applied to non-riparian uses (which is a key characteristic of prior appropriation theory), but it does not mandate that all uses of the water involve a diversion.
- With a permit system in place, the state no longer has to rely on demonstrated use to provide notice of a water right.
- But does granting a permit for in-stream uses unconstitutionally deprive a third party of the right to divert unappropriated waters?
- Holding -- Nebraska's constitution allows and requires that water be appropriated in accordance with public interest, and public interest (according to Nebraska law) recognizes the need to consider in-stream uses for fish, wildlife, and recreation.
In Re Adjudication of the Missouri River Drainage Area, Montana, 2002 (p. 24 of Gould's 7th ed.)
- Questions before the court: are fish, wildlife and recreation uses recognized as beneficial uses, and is a diversion required for appropriation purposes?
- Common law elements of a valid appropriation are intent, notice, diversion, and application to a beneficial use.
- The Montana water court stated that because Montana did not recognize water rights for fish, wildife and recreation, the Montana Department of Fish, Wildlife and Parks could not have intended to appropriate water for those purposes, and therefore its claims are invalid.
- Montana Supreme Court stated that it was not clear whether the water court took this stance because there was no diversion or because it found no notice of intent to appropriate water.
- Under prior appropriation, a diversion served dual purposes: provided notice of user's intent to appropriate water and defined the extent of the use.
- A diversion may prove intent to appropriate, but a diversion is not necessary; the doctrine of prior appropriation should not be interpreted as demanding a diversion of water where a diversion is unnecessary to achieve the intended beneficial use.
- For example, the common law of prior appropriation doctrine already allowed appropriations without diversion when there is no practical need for a diversion, such as stock watering.
- Beneficial use is the basis of the prior appropriation doctrine; Montana has long recognized the use of water for fish, wildlife and recreation as beneficial; Montana has validated other non-diversionary appropriations; therefore, Montana law does not absolutely require a diversion for a valid appropriation of water.
Also see, Instream Flows In Washington
North Dakota's approach to the question of diversion
- North Dakota's statutory criteria for a conditional water permit do not explicitly require a diversion. N.D.C.C. §61-04-06.
- Another way to ask the question is 'can a permit be granted for an in-stream use, such as fish, wildlife, etc?' North Dakota statutorily recognizes fish, wildlife and recreational uses of water.
- N.D.C.C. §61-04-01.1(4) (defines fish, wildlife, and recreational uses of water)
- N.D.C.C. §61-04-02 (addresses when a permit is needed for fish, wildlife and recreational uses of water)
- N.D.C.C. §61-04-06.1 (specifies preferences in granting permits)
- But North Dakota administratively requires the construction of a "works" as a criterion to receiving a conditional water permit
- N.D.A.C. §89-03-01-07. A permit application may only be considered if works are associated with the proposed appropriation.
- "Works" include canals, ditches, pipelines, and other conveyance systems, irrigation facilities, wells, pumps, dams, dikes, reservoirs, and other devices used for the appropriation or storage of water and land improved for irrigation. N.D.A.C. §89-03-03-01(3).
- North Dakota has a public interest criterion which includes "effect on fish and game resources and public recreational opportunities" [N.D.C.C. §61-04-06(4)(c)]. Does North Dakota interpret this the same as Nebraska?
Permits replace diversion as primary method of providing notice
- Amount of water diverted in the past was an easy way to measure quantity, but now that permit systems have been established, we no longer need to rely on diversion to determine the quantity associated with a use; instead, we can rely on the quantity specified in the user's permit.
- Diversion also provided others notice of the user's intent to appropriate. Again, the permitting systems are removing the need to rely on diversion to provide notice of intent.
- Probably the most significant reason to recognize in-stream flows is that we were pumping rivers dry; there was no way to preserve in-stream flows.
- In some states, including North Dakota, water users need a permit -- N.D.C.C. §61-04-02.
Introduction to Permitting Process
- Conditional permit and perfected permit -- N.D.C.C. §§61-04-06.2 and 61-04-09.
- Conditional permit allows user to begin constructing "works;" perfected permit means the user has put the water to a beneficial use.
- Priority dates from time of filing an application for the "conditional" permit -- N.D.C.C. §61-04-06.3.
- Without the protection of a conditional permit (that is, without the assurance that when a water user puts the water to a beneficial use the user will have a water right dating back to when the user began to construct the works), potential water users would be reluctant to invest the resources necessary to construct a water project.
- Without a distinction between a conditional permit and a perfected permit, granting a permit when the project is initiated (long before it is completed and water is put to a beneficial use) would result in the appropriator being granted a water right without putting water to a beneficial use.
- Thus the conditional permit is used to assure the appropriator will be granted a water right and priority once the project is completed and water is put to a beneficial use, but the process also allows the state to delay granting the appropriator a water right until the water is put to a beneficial use.
- As noted by the authors, Colorado does not have a permit system (it still relies primarily on a court system), but notice and intent can be established by steps taken in preparing to appropriate water.
Is a water right
a property right? See Lake
Region Credit Union v. Crystal Pure Water, Inc., 502 N.W.2d 524
asserts that the trial court erred in granting foreclosure of
the Credit Union's security interest in "an absolute and perfected
state water permit." Franzella has not cited any cases, authorities,
or supportive reasoning for her assertion. Although her argument
on this issue is somewhat confusing, we presume that she means
to assert that a perfected water permit is not a property right
subject to a security interest under the Uniform Commercial Code,
as codified at Title 41, N.D.C.C.
41-09-02(1)(a), N.D.C.C. [U.C.C. 9-102], provides that a security
interest may be created in personal property, including "general
intangibles." Section 41-09-06, N.D.C.C. [U.C.C. 9-106], defines
"general intangibles": "'General intangibles' means any personal
property (including things in action) other than goods, accounts,
chattel paper, documents, instruments, and money."
we have not found any case addressing whether a state water permit
falls within the U.C.C. definition of general intangibles, other
courts have held that similar permits and licenses issued by governmental
authorities do constitute general intangibles subject to a security
interest. [citations omitted]
It is also
generally held that, absent a specific prohibition in the state
liquor laws, a liquor license or permit is a general intangible
subject to a security interest under the U.C.C. [citations
governing issuance, retention, and transferability of a state
water permit are generally similar to those governing liquor licenses
and other government-issued licenses and permits. There are specific
criteria for issuance of a permit, procedures for revocation of
a permit, and provisions for assignment or transfer of a permit.
We find no specific prohibition in Chapter 61-04 against creation
of a security interest in a water permit. We conclude that a water
permit is a general intangible under Section 41-09-06, N.D.C.C.,
and may be the subject of a valid security interest. [citations
a water use be determined to no longer be beneficial and therefore the
quantity can be reduced? Is this reduction in a water right a "taking"
of a property right?
Irrigation District v. State Water Resources Control Board, California,
1990 (p. 41 of Gould's 7th ed.)
- Private party brought
an action requesting that the department of water resources determine
whether IID was misusing its water. Board ordered IID to make some changes
and that order is being challenged.
- There is considerable
water loss; that is not in dispute.
- Does the board
have the right to interfere with a vested water right?
- IID argues that
water right, once vested, cannot be interfered with.
- All property is
held subject to reasonable exercise of police power; there is no law
that authorizes an unreasonable use of water. The vested right is only
the amount that can be reasonably used. Anything beyond reasonable use
is no longer a vested property right. This may be a change from earlier
- Having used the
water in the past, does not guarantee you will be allowed to continue
to use that amount of water in the future, especially if the use of
the water in question is considered a waste, that is, it is not a beneficial
notes (pp. 44-48 of Gould's 7th ed.)
- Defining waste. Evaporation? Seepage?
- How much waste
will be tolerated? Is the cost/benefit of eliminating waste a consideration?
- Is "wasted" water
being put to a beneficial use? Can a beneficial use still be an unreasonable
use? Is reducing a water permit to eliminate "wasted" water a taking?
§61-02-44 The water commission shall be deemed to be exercising
police power of the state.
- Can we address
waste through regulation? market incentives? planning?
Intent to Apply Water to a Beneficial Use
I acquire a water right even if I do not intend to use it myself? Can
I acquire a water right as an "investment;" that is, hold it (without
putting it to a beneficial use) until I can transfer it to a user?" Also,
how soon does the water need to be put to a beneficial use? These questions
assume that a water right can be acquired before the water is put to use
(e.g., ND's conditional and perfected permits).
General rule -- the user must intend to put the water to a beneficial use within a reasonable time.
See the notes following the Denver case in the Priority section.
Exception for Municipalities
of Thornton v. Bijou Irrigation Co., Colorado, 1996. (p. 48 of Gould's 7th ed.)
- Applicant must
have the "necessary intent to apply the appropriated water to a beneficial
use;" a speculative use of the water is not enough to support the granting
of a conditional permit.
- But a municipality
may appropriate water based on its future needs as long as the amount
of the appropriation is in line with the city's reasonably anticipated
- See N.D.C.C. §61-04-06(4)(f)
-- intent and ability to complete the appropriation is a criterion in
granting a conditional permit.
are provided additional time to develop their beneficial use. Why?
§61-04-06.2 "... in no case may the state engineer issue a permit for
more water than can be beneficially used for the purposes stated in the application except that
water permits for incorporated municipalities or rural water systems may contain water in excess
of present needs if based upon reasonable projections of future water needs of the municipality
or the rural water system."
§89-03-03-04 "'Reasonably necessary
for the future water requirements of a municipality or rural water system' means
the amount of water estimated to be required thirty years in the future."
- N.D.A.C. §89-03-01-01.5 "... municipality ... that
appropriates water in excess of its current needs ... may sell the excess water ..."
- N.D.C.C. §§61-04-23, -24, and -25 Forfeiture of water rights "... an incorporated
municipality or rural water system has good and sufficient cause excusing the failure to use a
water permit, if the water permit may reasonably be necessary for the future water requirements
of the municipality or the rural water system."
doctrine of this case is relatively easy to apply if there is non-appropriated
water. But what if the city is growing and the only water to acquire is
what is already appropriated to another use, such as agriculture? Can
the city acquire the water under the doctrine of this case without compensating
the user whose water use is being interrupted?
was some legal basis in several southwestern states (referred to as pueblo
right) that a municipality could take the water without compensation (similar
to the idea of a city exercising its police power); however, the more
modern trend is that the current user is entitled to be compensated.
notes also address
- using the market
place as a way to allocate and reallocate water. What are the
advantages and disadvantages of using a market approach to allocating
and reallocating water?
- whether the benefit
of the water use must accrue only to the appropriator. Is the question
a matter of who receives the benefit or a question of who controls the
April 7, 2007