Bill to Change Assessment Caps Being Debated

An important bill is being debated regarding assessment caps for groundwater management districts.  That bill is SB 194.  Groundwater management districts can impose assessments on landowners in the respective district, along with charges on appropriators of water.  Right now those assessments are capped.

The problem is that several groundwater districts simply cannot meet operating expenses given the current assessment caps.  Thus, the groundwater districts, along with support from other entities, are lobbying to change the caps. 

SB 194 will increase the capped rates from $1 to $1.50 for water used within the respective groundwater management district.  It will also increase the rate from $1.50 to $2 if more than 50 percent of the water is used outside the district.

The bill also doubles the assessments on land owned within the district.  The bill has already passed the Senate and is now before the House for consideration.


What Happens If a Farm Tenant Overpumps a Water Right?

We frequently have landowners that come to us with the concern of what happens if their farm tenant overpumps a water right.  We acknowledge that this is a very valid fear that we have encountered numerous times. 

A “black mark” can go on a water right when it is overpumped.  For first time instances the Division of Water Resources (“the DWR”) usually just issues a letter and a fine.  However, for repeated and serious violations, a water right can potentially be forfeited.  Thus, it is a very big deal if a water right is consistently overpumped.

We commonly see the problem happen when the landowner lives out-of-state and has less ability to “police” the tenant’s stewardship of the property.  In situations where the landowner is completely innocent and unaware of the tenant’s actions, the DWR has still taken the position that a landowner is responsible for the actions of the landowner’s agent.  Thus, the moral of the story is to pick your tenant very carefully.

Additional precautions can be taken to help guard against the above scenario.  We have drafted language that can be put into a robust farm lease to help ensure that the tenant takes every precaution not to fall out of compliance with the water right.  A good, independent farm manager can also help to monitor the tenant’s actions.  There are several companies that offer this service.  Indeed, the overpumping of a water right is a significant concern that must be properly addressed by the landowner. 

Who Owns Your Water Right?

Owners of water rights are frequently surprised to find that their water rights are partially owned by others. The awareness of this problem most often arises when the obvious owner applies for a change in the right—such as permission from the Division of Water Resources to drill a new well.

It is at this time that they learn the unexpected news: that many years ago the place of use was set up to include land also owned by someone else. Such a situation causes the current owner of the previously unknown “place of use” to have an interest in the right.

To avoid such unpleasant surprises we recommend some of the following steps. If land, including a water right, is being purchased have the right examined for title and ownership purposes. It is preferable to have the examination completed by a competent water law attorney. Title insurance does not include any detailed analysis of a water right. It is not insured under the normal policy.

As to land under common ownership which has been irrigated for many years, the same examination by a competent water law attorney is warranted.

When such extraneous ownership is discovered, or is known, there is great merit in working to clear the records so that such ownership is eliminated. The Division of Water Resources responds affirmatively to (1) agreements among owners and (2) court orders. Agreements are usually much less expensive.  Court orders can be arduous processes to obtain.

Planning up front is thus critical to avoid unexpected expenses and surprises. In this case, an ounce of prevention is worth many acre feet of cure.

What Are the Basic Steps of Acquiring a Water Right

A number of steps go into obtaining a water right.  First, an individual or entity seeking a water right must file an application with the Division of Water Resources (DWR).  The correct application form must be submitted.  DWR will make a variety of determinations regarding whether to approve the application including, but not limited to, a safe yield analysis and whether the water use will interfere with other area water rights, minimum desirable streamflow, or the public interest.

If DWR approves the application, it will issue a permit.  After the permit is issued, the applicant must complete the diversion works.  An example of a diversion works is the drilling of a well.  After the point of diversion is completed, the applicant then has 4 to 5 years to perfect the water right.  An extension of time may be sought during the perfection period.  Perfection essentially means proper diversion of the water and utilization of the water right.

After the perfection period is completed, a field inspection is conducted by DWR.  The field inspector will assess such things as where the water is being used and the rate of diversion, among many other factors.  If the field inspection passes muster, a draft certificate of appropriation is issued.  The applicant then has 30 days to comment on the draft certificate.

After the above process is completed, a certificate of appropriation is issued.  The certificate must then be filed in the Register of Deeds office in the appropriate county to become effective.  The applicant must then file annual reports with DWR to keep the water right active.

Addressing the Challenges of Eliminating Non-point Source Pollution

One particularly interesting presentation was on the future of regulating non-point sources of pollution.  Under the Clean Water Act, a point source of pollution refers to an easily ascertainable point where the pollution is occurring—such as a pipe or a ditch. 

In contrast, with respect to non-point pollution, it is not easy to track where the pollution is actually originating.  An example of non-point source pollution would be agricultural runoff.  Currently, the majority of water pollution originates from non-point sources of pollution.  This is largely due to the numerous difficulties in regulating this form of pollution.

Consequently, several speakers provided perspective on how to clean up non-point source pollution in a collaborative manner.  They recognized that there is little incentive to eliminate non-point source pollution for oftentimes unknowing offenders.  For example, in the agricultural arena, infrastructure investments to deal with non-point source pollution are costly with little to no benefit to the producer.

The speakers talked about the Farm Bill’s role, along with the leadership of local government, in helping to incentivize the reduction of this problem.  The speakers highlighted a number of quite creative approaches that were being utilized nationwide.  Of course, many barriers currently exist to implementation.  It remains to be seen what the future holds with regard to this area of regulation under the Clean Water Act.

Adrian and Stucky Attend Annual Governor’s Conference on Water

Yesterday Tom and I had the opportunity to attend the annually-held Governor’s Conference on the Future of Water in Kansas.  Over 600 people attended from various viewpoints including attorneys, politicians, engineers, researchers, and representative of numerous governmental agencies.  Governor Brownback delivered a speech outlining his vision for managing water in the state.  He emphasized the importance of conservation.  Governor Brownback indicated that he believes that it is even possible to make the Ogallala Aquifer a sustainable resource. 

Another notable speaker was Michael Teague, the Oklahoma Secretary of Energy and Environment.  He talked about the importance of collaboration between agencies and between states.  Mr. Teague based his viewpoint off of extensive experience dealing with natural disasters, including a significant drought in Oklahoma.

Lieutenant Governor Jeff Colyer also spoke at the event.  He echoed similar sentiment of Governor Brownback.  A professor from Israel even provided an overview of how his country has dealt with issues involving the scarcity of water.  In the afternoon, various additional speakers presented on topics such as the Farm Bill, sustainable agricultural initiatives, dealing with non-point sources of pollution, and emergency preparedness for drought.

The conference was an opportunity for networking and collaboration on essential issues impacting water as a resource.  We had the opportunity to reconnect with many old acquaintances as well as establish new connections.  Overall, it was a wonderful conference.

When land is sold, can the water right be retained by the seller?

The answer to this question is “yes.”  However, several considerations should be made.  Generally, when land is sold or otherwise deeded, the water right passes with the conveyance of the land. 

However, a water right is a real property right.  Consequently, a water right may be severed from the land from which it is associated.  However, this may present special problems that should be considered.  A water right in Kansas generally must be put to a beneficial use.  Thus, if the water right is retained by the grantor, care should go into determining how the water right will be appropriated.  Other changes to the water right may be necessitated by the transaction.

If one wishes to sever the water right from the land, special care should go into drafting the deed or other instrument of conveyance.  Special language should be added to connote that the water right will be retained by the grantor.

What is Riparian Law?

The riparian doctrine is one of two main systems of determining water allocation and ownership of water rights. The other main scheme is prior appropriation.  This is the subject of a separate blog post.

The riparian doctrine evolved in the green countrysides of England and the eastern United States.  Riparian law typically deals with abundant water supplies.  In short, rights are based on access to water through ownership of banks and land surrounding a water supply.  Users restrict demands based on those that constitute reasonable uses.

The riparian doctrine has been critiqued as really not offering much of a system of water allocation.  Instead, it is viewed as a fire fighting device to settle the few disputes that arise over plentiful supplies.

What is Prior Appropriation?

A term that is commonly used in water law is prior appropriation. Prior appropriation embodies the concept of “first in time, first in right.”  That means the first individual to divert water to a beneficial use from a particular source of supply had priority over those that later staked claims to the same water source.  In this example, the first user would have rights that are senior to the later and more junior users.

The system of priority is quite significant in the event of water shortages.  If a governmental agency must reduce allocation from a particular source of supply, then the senior water right holders will be the last to be precluded from pumping water.

The prior appropriation doctrine was developed in the western United States during the gold rush in 1848.  The miners faced the dilemma of needing to pipe water substantial distances from streams, along with the problem of allocating water shortages.  Thus, the concept of prior appropriation emerged to prevent disputes among miners.  The very concept was actually born out of the idea of laying stakes to gold mines.

Soon the prior appropriation doctrine evolved.  It was first recognized in the 1855 Court case of Irwin v. Phillips.  Farmers discovered the benefits of appropriation law and it expanded into a recognized system to deal with water shortages throughout arid western regions.

Eventually, the concept of abandonment was added as a way to extinguish water rights that were not being utilized.  This freed water up for other, new users.  Thus, the touchstone of prior appropriation is being able to divert water to a beneficial use.  There are many types of beneficial uses including, but not limited to, domestic, recreational, industrial, municipal, and irrigation.

Although Kansas has a statutory system of allocating water, many elements of prior appropriation are embedded in Kansas law.  Indeed, the Kansas legislature passed the Water Appropriation Act in 1945.  As droughts and aquifer depletion continue to impact many parts of Kansas, prior appropriation concepts will continue to evolve under Kansas law.

Can An Abandoned Water Right Be Restored?

We recently have been asked by multiple clients if an abandoned water right can be revived pursuant to Kansas law.  This does not appear to be an issue that has clear precedent in statute or case law.  Thus, the ability to restore a forfeited water right is unclear.

Under Kansas law, a water right can be abandoned after 5 years of nonuse.  A Kansas administrative regulation carves out a number of very specific reasons that nonuse may occur.  Thus, a first step in considering whether a water right is properly abandoned is to analyze all the valid reasons for nonuse outlined in this regulation.

The Division of Water Resources also must follow specific procedures to properly designate a water right as abandoned.  An owner of a water right is generally entitled to proper notice of the intent to deem the water right abandoned.  Further, the owner is entitled to a full administrative hearing.  If the hearing officer makes a decision adverse to the water right owner, the outcome can be appealed.  It is worth noting that water rights abandoned earlier in time were subject to less required procedure.

It remains to be seen whether an aggrieved owner will attempt to revive a water right and pursue it through the court system.  If this is attempted, it remains to be seen whether a proper fact pattern can be presented that will cause a court to be sympathetic to this approach.