Final rulemaking related to Forest Service permits for Ski Area Water Rights was released on December 30, 2015. Unlike an earlier directive passed in 2011, the Ski Area Water Clause will not require ski areas to transfer water rights to the federal government as a condition of operating on public land. Instead, the new clause will require ski areas to prove there is a “sufficient quantity of water to operate a ski area.” The new directive will take effect on January 29, 2016.

In 2011, sparked by the concerns that ski areas might sell their water rights in lieu of using them to operate due to rising temperatures and water scarcity, the Forest Service issued a directive that would require joint ownership of water rights by ski areas and the United States. Since water rights are typically held by the lessee, this directive would have required a transfer of rights into shared ownership in some instances, and for water rights to be acquired in the name of the United States in others. The National Ski Area Association (NSAA) brought suit against the Forest Service challenging the directive on January 9, 2012, characterizing the directive as government overreach. In December, 2012 a federal judge agreed with the NSAA and ordered the Forest Service not to enforce the proposed rule.

The December 30th directive abandons the original proposal that ski areas transfer water rights to the federal government. Instead, after an extensive public comment period, the final directive requires an applicant for a ski area permit to submit documentation prepared by a hydrologist that demonstrates there is sufficient water to operate a ski area for the entirety of the ski area permit term. The final directive explains that “sufficient water to operate a ski area” means that under typical conditions, taking into account fluctuations in utilization of the authorized improvements, fluctuations in weather and climate, changes in technology, and other factors deemed appropriate by the applicant’s qualified hydrologist of licensed engineer, the applicant has sufficient rights or access to a sufficient quantity of water to operate the permitted facilities, and to provide for the associated activities to be authorized under the ski area permit in accordance with proposed operating plan.

Additionally, if there is a change such as a change in ownership, and a ski area water facility will not be primarily used for operating a ski area, the authorization for the facility under the ski area permit will be terminated and the facility must be removed from National Forest Service lands. Lastly, if a ski area permit is terminated or revoked, the holder must give a right of first refusal of the water rights associated with the permit to the succeeding ski area permit holder. If the water use right is jointly owned with the United States, the holder must give a right of first refusal to the government.

The stated goal of this new rule is to promote the long-term sustainability of ski areas on National Forest Service lands and the communities that depend on the ski areas for revenue. There are 122 ski areas that lease approximately 180,000 acres of lands managed by the Forest Service. Ski areas received about 23 million visitors annually, contributing $3 billion to local economies and supporting approximately 64,000 full and part-time jobs in rural communities. In the West, water use rights for many ski areas are business assets, property interests that operate as collateral when re-financing. One major criticism of the original rule, was that requiring water rights to be co-owned by the federal government would limit a ski area’s ability to control their assets and thus their ability to finance operations.

Thus, the directive ensures that ski areas not only have adequate water supply for operating, but that infrastructure to handle the water supply is used only for permitted purposes under the special use permit. Hailed as a success by both the Forest Service and the ski industry, these actions demonstrate a coordinated effort to eliminate the risk of sales or transfer of water rights that might prevent a ski area from operating in the future and ensure that water will remain available for ski areas across the West.

Congress has adjourned for the year without passing a bill to authorize and fund the Klamath Agreements. The Klamath Basin agreements include: the Klamath Hydroelectric Settlement Agreement (“KHSA”), Klamath Basin Restoration Agreement (“KBRA”) and Upper Klamath Basin Comprehensive Agreement (“UKBCA”) that together lay out a comprehensive scheme for changes in management along the entire reach of the Klamath River. After years of litigation and negotiation, certain stakeholder groups came together to craft the trio of agreements. However, the agreements did not sit well with everyone. Particularly those in Klamath County and their California neighbors due primarily to the highly controversial dam removal provisions and drying up thousands of acres of farmland. For these among other reasons, the agreements, which required authorizing legislation and funding from Congress, failed to gain traction.

Senator Ron Wyden [D-OR] attempted multiple times to pass the necessary legislation to authorize the agreements. The latest version, the Klamath Basin Water Recovery and Economic Restoration Act of 2015, has been stalled in committee since last January (2015). In an effort to move forward, on December 3, 2015, Representative Greg Walden [R-OR] released a draft bill intended to “help provide water and power certainty for agriculture and boost economic development and job creation for rural communities and tribes through a transfer of federal timber lands.” Walden’s draft bill omitted dam removal and authorized transferring up to 100,000 acres each of National Forest land to Klamath County, OR, and Siskiyou County, CA. These issues quickly became non-starters for the Tribes who held the “ears” of Senators Wyden and Merkley.

The KHSA is set to expire on January 1, 2016. While the parties can vote to extend it, some signatories are beginning to question if the agreements provide workable solutions for the Klamath basin. The Yurok Tribe clearly communicated its intent to terminate the agreement. Similarly, the Klamath Tribal Council has issued a dispute notice. Additionally, PacifiCorp, the company that owns the dams, has changed course and now indicates it will pursue re-licensing of the dams. Thus, many parties that initially favored the agreements are beginning to show their discontent. This may have been another reason authorizing legislation had difficulty making its ways through Congress.

In March of 2015, The Oregon Water Resources Department passed administrative rules, Oregon Administrative Rules 690-025, to help govern the region in accordance with the Upper Klamath Basin Comprehensive Agreement in anticipation of the agreement being authorized by Congress. The rules implement sections of the agreement to address control of well use in off-project areas when that use affects surface water supplies in the basin. However, these rules will no longer be effective once the agreement terminates, and groundwater regulation in the off-project area will again be in accordance with OAR 690-009.

As such, for better or worse, it appears the agreements will dissolve as portions of the agreements expire in the New Year. Thus, 2016 will likely involve the parties initiating new negotiations to resolve the critical water usage issues in the Klamath basin, potentially leading them back to court to resolve exceptions filed in the Klamath Basin Adjudication as that process is slated to continue through the coming year or years.

Photo: Rain – Klamath Basin Wildlife Refuge by Michael “Moik” McCllough