The Nevada Assembly Committee on Natural Resources (“Committee”) is considering a handful of water related bills in the upcoming 2021 legislative session. While we are continually receiving notice of new proposed bills, we wanted to provide a brief summary on the first few we reviewed.  Assembly Bills (“AB”) 5, 6, and 15 were prefiled for the 2021 legislative session on November 18, 2020. If passed the bills with effect procedures currently required for temporary change applications and judicial review of Nevada Division of Water Resources, Office of the State Engineer (“State Engineer”) decisions.  AB 16 also proposes reorganization of the Colorado River Commission.

Assembly Bill 5

AB 5 proposes various new provisions relating to judicial review of State Engineer orders and decisions. As drafted, Nevada Revised Statute (“NRS”) 533.450 allows a person aggrieved by a State Engineer action to seek judicial review in the nature of an appeal.  AB 5 limits circumstances under which a person can seek judicial review. Under AB 5 the State Engineer decision being reviewed must be (1) a formal order, ruling or decision that is a final decision in writing; and (2) must materially affect the person’s interest.  AB 5 also clarifies that the judicial review of State Engineer decisions shall apply civil appellate practices.

The progress and text of AB 5 can be viewed here.

Assembly Bill 6

AB 6 contains proposed revisions of the laws governing temporary change applications for appropriated water.  NRS 533.325 requires a water right holder wishing to make a temporary change to place of use, point of diversion, or manner of use of their water to file an application with the State Engineer.  NRS 533.345 requires the State Engineer to hold a hearing if the State Engineer determines that the temporary change may not be in the public interest or may impair existing right. AB 6 proposes that the hearing under NRS 533.345 be discretionary. This will allow the State Engineer to either hold a hearing or make a decision absent one.

The progress and text of AB 6 can be viewed here.

Assembly Bill 15

AB 15 considers the reorganizing of the Colorado River Commission of Nevada (“Commission”), which exists under NRS 538.041 to 538.251.  The Commission currently consists of four members appointed by the Governor for three-year terms, and three members appointed by the Southern Nevada Water Authority.  AB 15 proposes reducing the number of members appointed by the Governor to three and adding the State Engineer as an ex folio member of the Commission.  Under both the existing and proposed version, the chairman of the Commission is chosen by the governor among the members he appointed.

The progress and text of AB 15 can be viewed here.  Keep an eye on our blog for more legislative updates!

Trading Water as a Commodity

Unappropriated water has long been considered a public resource. It is subject to private ownership rights and development, to be sure. But the law generally treats water differently compared to commodities like consumer goods or other natural resources like lumber. The UN recognized water’s essential role in the public commons in Resolution 64/292. It declared a “human right to water” and acknowledged “clean drinking water and sanitation as a human right that is essential for the full enjoyment of life and all human rights.” However, recent developments in water markets could signal a shift in long-held perspectives. In early December, California water futures contracts began trading on stock exchanges for the first time ever, bringing water in line with other commodities like gold and oil.

At its most basic level, a futures contract is an agreement to buy or sell a commodity at a future date. The price and amount is set at the time of the contract. This gives cost certainty to buyers in volatile markets, but also invites outside speculation. The water futures here are tied to the Nasdaq Veles California Water Index, which tracks the spot market for water in California. The index has doubled in value over the past year. Tying futures contracts to the index allows buyers to “lock in” a price long before they will actually purchase water.

Pros and Cons

Proponents of the venture claim that the futures will add price certainty and transparency to the traditional spot water markets. Spot markets typically bring high prices and uncertainty for water users in dry times. Farmers, municipalities, manufacturers, and energy producers can look to the futures market for data on current and past prices. They can use that information to make informed decisions about what future prices might look like in dry times down the road. This allows water users to enter into futures contracts to offset the higher cost of water in the future.

However, some detractors fear placing water futures on the open market undermines water’s value as a basic human right. Pedro Arrojo-Agudo, a UN expert on water, worries that the futures market poses a risk to individual water users. This is because “large agricultural and industrial players and large-scale utilities are the ones who can buy, marginalizing and impacting the vulnerable sector of the economy such as small-scale farmers.” Additionally, trading futures on stock exchanges invites speculation from outside investors like hedge funds and banks. Speculation could lead to bubbles like we saw in 2008 with the housing and food markets. After all, western states that regulate water under the Prior Appropriation Doctrine prohibit water speculation. This fear may be far from realization, though. Analysts believe that water is currently too abundant worldwide to become a highly sought after commodity on global financial markets.

Looking Forward

Though brand new, California’s water futures trading represents an interesting experiment in water market innovation. Currently, spot water markets are the dominant avenue to buy and sell water. Some entities, like the Western Water Market, are trying to make the process easier. These futures are another step in that direction. In Schroeder Law Office’s webinar, “Buying and Selling Water Rights,” we noted the difficulties in developing water markets. For example, water isn’t fungible, water rights include specific conditions and restrictions, and the transfer process is often lengthy, limited in allowable scope, and expensive. On top of that, scarcity issues abound. Although the new water futures trading will not solve those particular problems, it is worth keeping an eye on. Water futures may successfully help California water users better manage prices. If so, futures trading could spread throughout other western states.

Stay tuned to Schroeder Law Offices’ Water Law Blog for more water news!

This blog was drafted with assistance from law clerk Drew Hancherick, a student at Lewis & Clark Law School.

The Nevada Division of Water Resources (NDWR) gave notice to extend the deadline for submitting written comment and testimony on Proposed Orders to Designate Hydrographic Basins related to the hearings held October 12- October 26, 2020. Information on the hearings is available at:

http://water.nv.gov/hearings.aspx.

December 1, 2020 is the new deadline for written testimony, noting all testimony and comments must be postmarked for mailing to the State Engineer on this date.

For more information, go to http://water.nv.gov, under News > Proposed Orders > Notice_of_Hearing > Table_of_Hearings. Here you can find a Table of Hearings on Proposed Orders by location with the associated Hydrographic Basins.

For additional information regarding NDWR Proposed Orders, please read our prior blog. 

.

In a previous blog, we looked into who owns an aquifer: does it belong to private individuals or the public? Under the ad coelum doctrine, the surface owner holds the ground itself – rocks, dirt, and the like – as private property, owned all the way down to the Earth’s core. On the other hand, the public collectively owns water, taken for private use through the rule of capture, or the ferae naturae doctrine.^[1] Because an aquifer is a “body of permeable rock which can contain or transmit groundwater,”^[2] the rules related to aquifers are a complex combination of the two competing doctrines. In our previous update, we highlighted a California district court case, Agua Caliente Band of Cahuilla Indians v. Desert Water Agency, et al, that seeks an answer to the question of aquifer pore space ownership.^[3]

Background

The Agua Caliente Band of Cahuilla Indians (“Tribe”) sued the Coachella Valley Water District and Desert Water Authority (“Defendants”) to protect the aquifer under its reservation from groundwater depletion and water quality degradation. The Tribe argued that the pore spaces within the aquifer are its property under the ad coelum doctrine. The Defendants believe that the public owns pore spaces. The court has not yet addressed the question of whether the pore spaces are public or private property. However, the case has progressed since our last post and we are due for an update.

The Tribe and Defendants agreed to split the litigation into three phases when the Tribe first filed the case in 2013. Phase 1 was to decide whether the Tribe had a reserved right to groundwater in principle. Thereafter, Phase 2 would resolve if this reserved right contained a water quality component, the method of quantification of a reserved groundwater right, and if the Tribe owned pore spaces within the aquifer. Phase 3, if necessary, would quantify the Tribe’s reserved groundwater right and ownership of pore space.

In Phase 1, the court granted summary judgment to the Tribe on its groundwater right claim. The decision essentially declared without a trial that the Tribe did in fact have a reserved right to groundwater. Phase 2 was delayed while the Defendants unsuccessfully appealed to the 9th Circuit and then unsuccessfully sought Supreme Court review.

Update

Like Phase 1, Phase 2 proceeded to summary judgment. The court ruled that the Tribe can seek a declaration that it has an ownership interest in sufficient pore space to store its groundwater. However, the Tribe did not argue that it owns the pore space as a “constituent element” of its land ownership in its initial complaint, and the court could not consider it. Recently, the Tribe submitted an amended complaint including its pore space as “constituent element” of land ownership argument, which is now before the court.

The question of whether the Tribe has ownership of the pore space beneath its reservation is the only item left for the court to decide in this phase; the answer could have a real impact on groundwater issues, as it may be one of the first cases to directly address the pore space question. Another controversy is bubbling over pore spaces in North Dakota, starting with the case Mosser v. Denbury Res., Inc., 2017 ND 169 (2017), passage of H.B. 2344, and legal challenges to the bill by the NW Landowners. Keep an eye on the blog for our next update on this case that could affect you!

This blog was drafted with the assistance of Drew Hancherick, a current law student attending Lewis and Clark Law School.

^[1] https://en.wikipedia.org/wiki/Cuius_est_solum,_eius_est_usque_ad_coelum_et_ad_inferos

^[2] Oxford Online Dictionary, https://en.oxforddictionaries.com/definition/aquifer

^[3] The case is presently before the United States District Court for the Central District of California, Docket No. ED CV 13-00883-JGB-SPX. Plaintiffs filed the complaint on May 14, 2013.

          The Slink Fire rages on in the Carson-Iceberg Wilderness Area. Meanwhile, pilots fly an imaginary line to drop water on wildfires according to wilderness laws and procedures. This raises the question, are wilderness firefighting laws protecting or harming wilderness areas?

Wilderness Firefighting Laws 

          Congress passed the Wilderness Act of 1964 to minimize human impacts and preserve wilderness.  For example, the act limits and/or prohibits motorized vehicles in wilderness. See 16 U.S.C. 1131(a).  Additionally, it requires minimized human impacts from firefighting . One exception is the use of aircraft.  Aircraft may be used as necessary to control fire. P.L. 88-577 § 4(d)(1). However, the act applies conditions even to this use. Id. 

            Later wilderness laws echoed protective policies. The Endangered American Wilderness Act of 1978 directed the Secretaries of Interior and Agriculture to implement fire prevention and watershed protection. See P.L. 95-237 §§ 2(c)-(d).  The Secretaries were required to create special fire suppression measures and techniques. Id. The California Wilderness Act of 1984 included similar language. The Act created the Carson-Iceberg Wilderness and extended firefighting restrictions to it. See P.L. 98-425 § 103(b)(2). 

Firefighting Restrictions in Practice

How are these provisions applied in practice?  In the Carson-Iceberg Wilderness Area, impacts are minimized by restricting the place of water use. Firefighters must take water and use it in the same watershed.  In smaller wilderness areas, these restrictions are moot.  However, in the Carson-Iceberg, unique challenges are presented to firefighting crews. 

            As of Thursday, September 10, 2020, the Slink Fire raged over 22,474 acres.[1] The fire spanned across three watersheds: the Carson Watershed, the Silver King Watershed, and the Walker Watershed.  Don Zirbel, of the Clackamas Fire District, provided a community update. He noted that fire crews are struggling with restrictions for “crossing lines” during aerial water drops. These restrictions require pilots to take water from a watershed and drop it on fire only within the same watershed.  He also noted that multiple water “dip” cites were located within each of the three watersheds, so these restrictions did not hamper ground crews or helicopters from accessing and using the needed water. This is not always the case. 

            Regardless, the update started a heated public debate on whether wilderness firefighitng laws are hindering or helping the integrity of wilderness. With a fire season for the record books, the federal agencies managing these wilderness areas will likely face these same questions. 

[1] https://inciweb.nwcg.gov/incident/7105/ (last visited 9/10/2020)

(Photo Credit: https://inciweb.nwcg.gov/incident/7105/, and Don Zirbel, Clackamas Fire District)

By Therese Ure and Lisa Mae Gage

Nevada Division of Water Resources (“NDWR”) submitted draft administrative regulation amendments to the Legislative Council Bureau for this regulation cycle (the proposed amendments can be found at http://water.nv.gov/documents/NDWR_Prop_Admin_Regs-Hearings_EOT_Water_Right_Surveyor_6-8-2020.pdf ). A public workshop concerning the administrative regulation amendments was hosted by NDWR on June 24, 2020 wherein NDWR received public comments during the workshop and subsequent written comments. Since the workshop NDWR has made revisions to the proposed regulation amendments based on the comments received.

In an effort to keep the public informed of its revised regulation amendment proposal, and in order to allow the public continued opportunity to provide comments, NDWR has advised that 1) it has created and is maintaining an email distribution list to provide communications concerning its ongoing revisions; 2) it is planning on holding at least three (3) additional public workshops prior to the beginning of the 2021 legislative session; 3) it will provide bi-monthly updates regarding the planned workshops; and 4) it does not intend to take the regulations to a public hearing until after the 2021 legislative session concludes.

To stay informed and up-to-date on these possible administrative regulation changes that may affect water right holders throughout the state of Nevada, we suggest signing up for updates via NDWR’s email distribution list. Instructions for subscribing to the notification list can be found by visiting http://water.nv.gov/documents/AdminRegs%20Listserv%20Instructions.pdf.

Well sharing agreements are more common than you might expect! These types of agreements allow neighbors to share a well along with the costs for electricity and maintenance. However, there are several pitfalls that can be a big headache for landowners!

What are well sharing agreements?

Basically, these kinds of agreements are a combination of easements and covenants. Easements allow owners land, called the dominant estate, to use adjacent property, called the servient estate. Another kind of easement, called an easement in gross, do not have a dominant estate, like utility easements. The easement components of these kinds of agreements typically allow access to the well, maintenance, and repairs.

On the other hand, the covenant portions of these agreements contain the contractual terms. These contractual requirements pass with the sale of the land to new owners. For example, the agreement typically require the landowners to share electrical and maintenance costs. Also, parties must typically share water production if water is not available to meet the demand. In addition, terms can include dispute resolution terms, limitations on adding new parties, limit water uses, or describe the process to withdraw.

In contrast, sometimes the terms of the agreement are not in writing. Selling adjacent property served by a common well or subdividing property and providing well water using a pipeline can create an unwritten wells sharing agreement. If a dispute arises, parties might file a lawsuit to establish the agreement as an implied easement or as irrevocable license. Since parties must establish the terms of an unwritten easement by costly litigation, parties sharing a well should consider drafting a written agreement instead of “handshake deals.” We discussed these kinds of agreements in a free webinar available here.

What are the common problems with well sharing agreements?

First, these agreements typically share electricity and other expenses equally. Conflicts often arise when one party allegedly uses more water than the others, but each party pays the same amount. To avoid this issue, terms can allocate costs to each party based on their use. This approach might require installation of water meters to measure water use to each property and renegotiation of the terms of the agreement.

Second, the costs for maintenance of the well often become a point of controversy. Many wells operated using a well sharing agreement were drilled many years ago and have fallen into disrepair. The costs to reconstruct a failing well or drill new well can be significant. Further, wells constructed in the past often do not meet modern well construction standards. We discussed well construction issues in a free webinar available here. When the agreement does not clearly determine cost allocations, parties often disagree about who should pay for the repairs.

Third, the agreements often omit terms related to legal requirements under the Water Code. Oregon law requires a water use right for any domestic use that exceeds 15,000 gallons per day under ORS 540.545(1)(d). In addition, irrigation from a single exempt group domestic well cannot exceeds ½ acre under ORS 540.545(1)(b), meaning the parties to the well sharing agreement must share the available ½ acre for irrigation. Each party is not allowed their own ½ acre of outdoor irrigation under Oregon law. However, landowners can drill their own wells to provide additional irrigation if needed. Unfortunately, these agreements often omit the explicit allocation of outdoor irrigation to the parties.

What do I do if I have an issue with my well sharing agreement?

Of course, the best way to prevent a dispute is to develop a fair and complete well sharing agreement that avoids the problems identified above. However, if you are already participating in an agreement and would like to modify its terms, the parties may renegotiate a new agreement. A written agreement can also supersede an unwritten well sharing agreement by explicitly outlining its terms. Plus, a written document that is recorded with the county notifies future buyers of the property.

We routinely review and draft these kinds of agreements, so if you have specific questions, please contact us! We provide an extensive overview on how we can assist you with your agreements and other water items in Nevada or Oregon. We recently created a series of free webinars covering a variety of water-related topics published as a Water Right Video Handbook available here. Make sure to stay tuned to Schroeder Law Offices’ Water Blog for more news that may affect you!

In the eighth COVID-19 webinar, Laura Schroeder, Michelle Owen, and Scott Revell discussed various types of water organizations. The webinar aired originally on June 3, 2020 from 12:00 PM to 1:00 PM. You can view the webinar here!

Above all, learn the differences between public and private water organizations. For instance, the panelists will provide examples of the different types of public and private water management organizations. Further, the presentation reviews the generally applicable rules pertaining to public water agencies and regulatory oversight of private water utilities. Generally, topics will include:

• Types of Water Management Organizations
  • Residential and domestic
  • Irrigation
  • Flood control and drainage
• Comparing Public and Private Water Management
  • Formation, organization, and dissolution
• Public Water Organizations
  • Municipal, irrigation, domestic, and flood control agencies in Oregon, Nevada, and Washington
  • Applicable laws, rules, and requirements for public agencies
• Private Water Organizations
  • Corporations, ditch companies, and community water systems
  • Different agencies providing oversight of private water management organizations

Afterwards, we posted our webinars in the COVID-19 Series here, giving you “on demand” access to Schroeder Law Office’s educational events under the “social distancing” orders! Additionally, the COVID-19 Webinar series continued over several weeks covering topics, including livestock water rights on public lands. If you can’t make it, stay tuned to our blog for announcements for information about the next webinars or watch the webinars later on our website. If you have any issues with registration or viewing the webinars, please contact Scott Borison at: scott@water-law.com.

For the sixth COVID-19 webinar, paralegals Rachelq Harman, Tara Jackson, and Lisa Mae Gage will discuss the research tools and resources available on the Idaho Department of Water Resources (IDWR), Oregon Water Resources Department (OWRD), and Nevada Division of Water Resources (NDWR) online databases. The webinar will occur in 3 parts on May 20, 2020.

First, Rachelq, moderated by attorney Laura Schroeder, will present on IDWR’s online resources from 11:00 AM to 11:30 AM Pacific Time (12:00 PM to 12:30 Mountain Time). Next, Tara, moderated by attorney Sarah Liljefelt, will present on OWRD from 12:00 PM to 12:30 PM Pacific Time. Finally, Lisa Mae, moderated by attorney Therese Ure, will present on NDWR from 1:00 PM to 1:30 PM Pacific Time.

Click on the state’s name to register for the Idaho, Oregon, and/or Nevada webinars. We invite you to attend all three, or just the one(s) most relevant to you. If you have any issues with registration, please contact Scott Borison at: scott@water-law.com. If you can’t make it, stay tuned to our blog for announcements for information about the next webinars. Our previous webinars in the COVID-19 Series are available here.

Each of the May 20th webinars will offer suggestions on how to get the most out of each state’s online resources and water right information. First, we will provide an overview of what tools are available on each state’s website, then narrow our focus to water right look up and mapping tools. We will then take you through the steps needed to search for individual water rights. We will also explore the various online mapping tools and files available to aid in water right research. 

Topics will include:

1. Website home page overview
2. Use and function of water right search systems
   1. Types of search fields
   2. Types of search results
3. Use and function of online mapping tools
   1. Finding a water right
   2. Finding a well
4. Other useful tips/tools for water right research

We will offer a surprise discount for online research assistance to be provided by one of the experienced water rights paralegals who are panelists to this webinar for webinar participants.

The COVID-19 Webinar series will continue over next several weeks, including topics related to real estate due diligence and water management organization. Previous webinars are available on our website, giving you access to Schroeder Law Office’s educational events under the “social distancing” orders! Follow Schroeder Law Offices’ Water Law Blog for the most up to date information and announcements!

In the fourth COVID-19 webinar, Laura Schroeder and Wyatt Rolfe discussed how to conduct due diligence on water use rights. The webinar originally aired on May 6, 2020 from 12:00 PM to 1:00 PM. You can view the webinar here! Stay tuned to our blog for announcements for information about the next webinars. You can watch previous webinars in the series here.

Learn the basics about water use rights in property transactions and determining if any issues are present. Receive practical information to locate any “red flags,” the most common issues encountered in water use right due diligence, including those related to small utilities. Topics will include:

• Why conduct a water use right due diligence review?
  • What gets missed in the typical process.
• What water use rights do I have?
  • General overview of water right types.
• What are the major issues encountered with water use right due diligence?
  • Discussion of forfeiture, abandonment, deviations from allowed uses, compliance, and conditions of use.
• What red flags are associated with water use right due diligence?
  • Learn the most commonly encountered issues and special considerations for cannabis producers.
• What special considerations pertain to water utilities and water providers?
  • Consider the issues of purpose, water management and conservation planning, and service boundaries for public water providers.

The COVID-19 Webinar series continued over several weeks, including topics related to using the OWRD website to locate information and real property issues associated with water use rights. All webinars are available on our website, giving you access to Schroeder Law Office’s educational events under the “social distancing” orders! Follow Schroeder Law Offices’ Water Law Blog for the most up to date information and announcements!

In the third COVID-19 webinar, Laura Schroeder, Clint Kinney, and Bob Long discussed what to do when you receive a notice that your well construction is non-compliant. The webinar aired originally on April 29, 2020 from 12:00 PM to 1:00 PM. You can watch the webinar here! Stay tuned to our blog for announcements for information about the next webinars! You can view other webinars in the series here.

Learn the basics about well construction rules from the legal perspective, including why well construction matters, when it can interfere in water use right transactions, and what you can do to fix or avoid issues. Receive practical information to investigate wells, determine issues with wells when purchasing new property, and investigate well issues on property you already own. Topics will include:

• Agency Regulation of Wells
  • What agencies and rules apply to well construction?
• Well Construction
  • What forms are required to drill or reconstruct a well?
  • What construction rules apply?
  • What happens when these rules aren’t followed?
• Well Construction and Water Use Rights
  • What is the definition of an “aquifer?”
  • Does OWRD analyze well logs?
  • When does well construction interfere with water right issues?
• Remedies to Well Construction Issues
  • How can one overcome construction issues in OWRD applications?
  • Does the well driller need to fix (or pay to fix) the well?
  • What options are available to fix an improperly constructed well?

The COVID-19 Webinar series continued the following several weeks, giving you access to Schroeder Law Office’s educational events under the “social distancing” orders! Other webinars covered common water-related issues, including due diligence reviews in water use rights. Follow Schroeder Law Offices’ Water Law Blog for the most up to date information and announcements!

By Laura A. Schroeder and Tara J. Jackson

The answer to this question may depend on the paperwork you have to document domestic water use at the current or planned residence. When either a building permit or financing is required on a rural residential property, the permitting authority or lender will likely require that the domestic water use provided to the residence has either (1) a water use right for a surface water source or (2) a groundwater well that is properly recorded with Oregon Water Resources Department (“OWRD”) as a groundwater use that is exempt from permitting and bearing a well ID tag. ORS 537.130, 537.545(5)-(6), and 537.789.

As hinted at above, domestic water use from a surface water source is not exempt from OWRD’s permit requirements, meaning it is illegal without first obtaining a water use right from OWRD, while domestic use of groundwater within certain limits is allowed with no water use right. ORS 537.141 and 537.545(1)(d). Seems pretty straight forward, right? If the source of domestic water for your residence is above ground, you need to provide your lender or permitting authority proof of your water use right. If the source of domestic water for your residence is below ground, you need to provide proof of proper recording of the exempt use and that the well is fitted with an OWRD issued well ID tag. BUT WAIT, the domestic water use for your property is supplied by a spring? Well, now the question becomes complicated. Is the spring water, surface or groundwater?

If the spring comes to the surface without a “spring box,” possibly considered a well casing, OWRD will qualify the source as a surface water source requiring a water use right, unless OWRD finds that the source is not regulated as “public waters” because it does not leave the boundary of a private property.[1] However, OWRD rarely finds that water rising to the surface is not leaving the private property so this “private water” exception will not be routinely applied by OWRD unless proven by way of a court proceeding.

To obtain a surface water use right for domestic use of the spring at the property, the use would have had to be (a) registered (ORS 539.240), (2) adjudicated by a Court issuing a decree upon which a certificate of water right would be issued by OWRD (ORS 539.140 and 539.150), or (3) applied for and permitted through OWRD’s surface water permitting statutes and rules (ORS 537.130, 537.140; 537.150, 537.153, 537.170, and 537.211; OAR 690-310 and 690-320). Under the third option, OWRD permitting, a two-year processing window can be expected, even if the statutes and rules provide that water is available for such use.

Up to 15,000 gallons of water per day may be used from a groundwater source for domestic purposes under the exemption provided by ORS 537.545(1)(d). Oregon law defines groundwater as “any water, except capillary moisture, beneath the land surface or beneath the bed of any stream, lake, reservoir or other body of surface water within the boundaries for this state, whatever may be the geological formation or structure in which such water stands, flows, percolates or otherwise moves.” ORS 537.515. Accordingly, if development of the spring required excavation this may indicate that the source of the spring would be characterized as groundwater. For example, if the spring comes to the surface with a “spring box,” the water may then be considered groundwater by OWRD. However, at the current time, it is our experience that OWRD will typically find springs to be surface water. Moreover, if OWRD finds the source of a spring developed by excavation, such as a “spring box,” to be groundwater, it may then choose to regulate the “spring box” or similar structure for failing to meet well construction standards. ORS 537.775 and 537.787.

In addition to the uncertainty as to whether OWRD will characterize your spring as groundwater, such that your domestic use will be allowed without a permit, currently OWRD’s administrative rules only accommodate recording of exempt groundwater use registrations for wells. OAR 690-190-0005. Springs are not included in the statutory definition of a well.[2] As a result, a spring similarly does not qualify for a well ID tag. Thus, while use of a spring for domestic purposes without obtaining a water use permit may be allowable under Oregon law, it may not be possible to document the use to the standard that may be required by your lender or permitting authority.

Further, all wells may not be treated equally in the eyes of a lender or permitting authority. While reliance on ORS 537.545(1)(d) for the right to use water for domestic purposes without a permit from a well does not hinge on OWRD’s characterization of the water’s source, as is the case for a spring, it may still prove hard to obtain documentation for certain wells that will satisfy a lender or permitting authority’s requirements. For example, OWRD’s rules accommodate and require recording of exempt groundwater uses from new wells constructed after July 22, 2009. OAR 690-190-0005(2). Thus, while domestic use from wells constructed prior to this date is still allowed under the exemption, the use will not be recorded.[3] OWRD established the process for obtaining well ID tags in 1996. Accordingly, wells constructed prior to 1996 may not bear a well ID tag, but OWRD will issue a well ID tag for wells constructed prior to 1996. ORS 537.791. In the case where the exempt groundwater use from a well is not recorded, a lender may agree to move forward with only documentation that the well is furnished with the required ID tag, but such a determination, is dependent upon the lender.

THE BOTTOM LINE:  We love water use right puzzles here at Schroeder Law, but if you have a choice, the most expedient and sure method to move forward smoothly with the building permit or loan approval for your rural residential property is to work with a water well drilling professional to drill an exempt well, tapping the underground water source, and using the exemption for domestic use under ORS 537.545(1)(d). Otherwise, the documentation and analysis becomes complicated quickly!

The Oregon Groundwater Association is a great resource for information on reliable water well drilling professionals. Check out their website here!

Stay tuned to Schroeder Law Offices’ blog for all things water!

[1] Norden v. State by & Through Water Resources Dep’t, 153 Or App 127 (1999)

[2] ORS 537.515(9) defines well as “any artificial opening or artificially altered natural opening, however made, by which groundwater is sought or through which ground water flows under natural pressure or is artificially withdrawn.” The statute goes on to say that a well “does not include a temporary hold drilled for the purpose of gathering geotechnical groundwater quality or groundwater level information, a natural spring or a hole drilled for the purpose of:…”

[3] OWRD rules also require an exempt groundwater use from a well that was converted after July 22, 2009 to allow groundwater use for purposes that are exempt under ORS 537.545 after July 22, 2009 to be recorded. OAR 690-190-0005(2).

In the second COVID-19 webinar, Laura Schroeder and Sarah Liljefelt discussed what to do when you receive a notice of cancellation of your water right in Oregon. The webinar aired originally on April 22, 2020 from 12:00 PM to 1:00 PM. You can view the webinar here!. Stay tuned to our blog for announcements for information about the next webinars! You can view the other webinars in the series here.

Learn the basics about water rights cancellation, including the types of cancellation applicable to different water use rights, the steps in the process, and how to address or challenge the agency’s cancellation decision. Receive practical information to protect your water use rights, determine if water use rights are in good standing when purchasing new property, and conduct assessments of the water use rights on property you already own. Topics will include:

• Regulation of Exempt Uses
  • What are exempt uses?
  • Can exempt uses be cancelled?
• Cancellation
  • What kinds of water use rights can be cancelled?
  • What is the process for cancellation?
  • How does one address or challenge a cancellation decision?
• Voluntary Cancellation or Abandonment
  • What is abandonment?
  • Why would anyone abandon a water use right?
• Avoiding Cancellation
  • How can a person protect their water use rights from cancellation?
  • What are the best kinds of records to maintain to protect water use rights?

The COVID-19 Webinar series will continued in following several weeks, giving you access to Schroeder Law Office’s educational events under the “social distancing” orders! Later webinars will cover common water-related issues, including well construction issues, and illegal water uses. Follow Schroeder Law Offices’ Water Law Blog for the most up to date information and announcements!

As the first COVID-19 Webinar in new weekly series, Laura Schroeder and Therese Ure discussed the ins and outs of how watermasters regulate water in Oregon and Nevada. The webinar aired originally on April 15, 2020 from 12:00 PM to 1:00 PM.  You can view the webinar here! Stay tuned to our blog for announcements and information for the next webinars! You can view other webinars in the series here.

Learn the nuts and bolts of how watermasters regulate water, issue shut off orders, and the rules watermasters must follow to distribute water. Receive practical tips to challenge a watermaster’s decision, potentially preventing enforcement until the decision is reviewed. Topics will include:

• State Watermasters & Agency Roles
  • What are “existing water rights of record?”
  • How a “call” works when insufficient water is available for senior water users
• How Watermasters Enforce Water Codes
  • Oral and Written Orders
  • Final Orders
  • Service and Notice
• Final Order Validity
  • The components of a valid watermaster order
• Review of a Watermaster’s Order
  • Reconsideration, judicial review, and associated timelines
  • Stays in enforcement pending review

The COVID-19 Webinar series continued the following several weeks, giving you access to Schroeder Law Office’s educational events under the “social distancing” orders! Upcoming webinars will cover common water-related issues, including water use right cancellations, well construction issues, and illegal water uses. Follow our blog for the most up to date information and announcements!

Was your upcoming water law conference cancelled? Or are you itching to learn more about Oregon water law, but could never attend one of Schroeder Law Offices speaking events? Stuck inside due to Covid-19 orders? You’re in luck! Laura Schroeder will be offering a series of free webinars this spring covering a wide range of water law topics on our website.

The current schedule will include:

• How to React to a “Red Tag” From the Water Master Shutting Off Your Water Righted Diversion? (April 15, 2020): This webinar will discuss the role of watermasters, the rules they enforce, and how to challenge incorrect watermaster decisions.
• What to Do When You Receive a Notice of Cancellation on Your Water Right? (April 22, 2020): This webinar covers the grounds for cancellation used by the Oregon Water Resources Department, how a cancellation is initiated, and how to protect your water rights of use!
• What Options Are Available When Your Receive Notice Your Well Construction is Non-compliant? (April 29, 2020): This webinar will review Oregon Water Resources Department and Oregon Health Authority rules regarding well construction, why well construction matters to water rights of use, and options to resolve the problems.
• How to Prepare a Response to a Notice of Violation Concerning Illegal Water Use? (May 6, 2020): This webinar provides an overview of the appeal process for challenging a notice of violation, what tools are available, and how the process works.

Further updates and instructions to attend will be coming soon. Stay tuned to our blog receive updates on these upcoming events and other water news!

In 2014, the Idaho Department of Water Resources (“IDWR”) proposed adjudicating water rights in the Bear River Basin in Southern Idaho. Now, nearly 6 years later, a bill that would allow IDWR to commence the adjudication is up for legislative consideration. The Idaho House of Representatives unanimously passed House Bill 382 (“HB 382”) on February 10, 2020. The House then sent it to the Idaho State Senate with a “do pass” recommendation on February 11. The third Senate reading of HB 382 is scheduled to occur on February 26.

Adjudicating the Bear River Basin water rights will enable IDWR to “accurately record all existing water rights to resolve uncertainty and to help ensure fair and accurate water administration.” Revised Statement of Purpose RS27284C1/H0382, available here. Many of the water rights in the Bear River Basin hold senior priority dates, but uses have changed over time or are placed to use outside the claimed boundaries due to the passage of time and inconsistent record keeping. Additionally, because of the uncertain nature of many of the water right claims, until an adjudication is completed, senior users who face interference from junior users’ water use cannot seek enforcement of their priorities.

The Bear River Basin is one of only two basins in Idaho that have not yet been adjudicated. In 2014, IDWR signed a final decree closing the Snake River Basin Adjudication (“SRBA”). Several basins in Northern Idaho, including the Coeur d’Alene-Spokane, Palouse River, and Clark Fork-Pend Oreille basins, are currently being adjudicated as part of the Northern Idaho Adjudication project. IDWR’s website provides a summary of past, current, and upcoming adjudications here.

If HB 382 passes the Senate, the final step will be for Governor Brad Little to sign the bill into law. Then IDWR can commence the adjudication by sending notice to water users and property owners within the Bear River Basin. Those users will then have the opportunity to submit claims for historical and ongoing water use. Once the submission period closes, the Court will review all claims and, eventually, issue a decree confirming the water rights.

It is not uncommon for adjudication proceedings to take a significant number of years from their commencement to completion. Idaho has completed its prior adjudications in record time. Even so, the SRBA began in 1987, but a decree was not issued until 2014. Legislature similar to HB 382 authorizing the adjudications in Northern Idaho was passed in 2006; however, Phase 1 of 3 is still ongoing and Phase 2 only just began in April 2019. The Bear River Adjudication would not begin until adjudications in Northern Idaho are complete. Once commenced, it is expected to take 8-10 years.

Stay tuned to Schroeder Law Offices’ blog for updates on the Bear River Basin and other water projects!

Oregon State University’s Family Business 360 Series for 2019-2020 will feature Laura Schroeder in a webinar on February 20, 2020. The webinar will have two parts. 

The first is an introduction to water rights drawing on Laura’s nearly 30 years’ experience as an Oregon water lawyer.

The second part addresses Due Diligence for Sellers and Buyers. This second part includes researching water rights associated with a property; assessing current use and status of water rights; and identifying related water rights.

You can watch this fast paced webinar at noon on Thursday, February 20, 2020. It is free to watch and open to the public. To watch it you must sign up here to receive a link to the presentation. Just scroll down to the February 20 webinar here, click the link and fill out the form. After you sign up the program manager will send your link to the webinar via email during the week of February 17.

By Caitlin Skulan and Lisa Mae Gage

On January 31, 2020 the Nevada State Engineer Tim Wilson issued the Order of Determination of the Relative Rights in and to All Waters of the Diamond Valley Hydrographic Basin. This order is the State Engineer’s final determinations of all the vested claims to water in the Diamond Valley Hydrographic Basin.  Nevada Revised Statutes “NRS” Chapter 533 governs the procedure for adjudications before the State Engineer and Court systems.

Filing Final Order with District Court

Now that a final order is issued, the State Engineer will file the Order of Determination with the clerk of the district court in which the water sources are located. The water rights subject to the Diamond Valley adjudication are not located wholly within one county, rather, they are located in Elko and Eureka counties. Elko County District Court is located in the Fourth Judicial District, while Eureka County is located in the Seventh Judicial District. When this happens, Nevada law directs the State Engineer to notify each of the judicial districts of his intention to file the Order of Determination, at which time the judges are to confer and agree upon where the court proceedings will be held. After the Judicial District is determined, the State Engineer will file the Order of Determination, evidence and transcripts with the court clerk. If the judges fail to notify the State Engineer of their decision within a statutorily prescribed period, the State Engineer can file the Order of Determination with the judicial district of his choosing.

Setting of Hearing on Order of Determination

Once the State Engineer’s record (Final Order, evidence and testimony) are filed with the District Court, the District Court will issue an order setting a Hearing on the Order of Determination. The court will provide the State Engineer with a copy of the Order Setting Hearing and the State Engineer will mail a copy to all interested parties. In addition, the State Engineer will publish the Order setting hearing in newspapers of general circulation for Elko and Eureka counties.

Exceptions to the Order of Determination

If any party feels aggrieved or dissatisfied with the Order of Determination they can file objections. At least five (5) days before the date of the hearing, that party must file with the District Court their objections by filing a Notice of Exceptions to the Order of Determination. This notice must state briefly the exceptions to the order and give the party’s requested prayer for relief.

Hearing on Order of Determination and Decree

If no exceptions to the Order of Determination are filed, on the day of the hearing the Court can issue its Findings of Fact, Judgment and Decree (“Decree”). If exceptions are filed, each party filing exceptions will appear at the hearing. The Court will prepare and provide all parties a copy of its Proposed Findings of Fact, Judgment and Decree at least thirty days before it intends to execute the Decree. Once the Decree has been executed by the District Court, there is a further opportunity to appeal to the Nevada Supreme Court.

While the issuance of the State Engineer’s Order of Determination is a good milestone in determining the vested rights in the Diamond Valley Hydrographic Basin, we may still be a long way from obtaining a final Decree.

In July, 2020, attorney Laura Schroeder will hit the road and travel to Idaho to teach a series of classes on “Water Law for Utilities.” The classes are put on by the Idaho Rural Water Association (IRWA) and are approved by the State of Idaho Bureau of Occupational Licenses for 0.6 drinking water or wastewater Continuing Education Units.

Laura regularly presents to small and large groups in and around the Portland metropolitan area. However, this is the first time since 2018 that she will make it to Idaho. Then, she worked with IRWA to teach a series on understanding and managing municipal drinking water rights. This time around, she will focus on water utilities.

In these classes, Laura will provide an overview of water rights in the State of Idaho and how water utilities are impacted by the laws and statutes that govern those rights. She will also address water quality, quantity, and access issues, including a brief discussion of easement law. Finally, she will go over some of Idaho’s public meeting laws and how they pertain to water utilities.

Laura will teach in Twin Falls, Idaho on Monday, July 14, in Pocatello, Idaho on Tuesday, July 15, and in Fruitland, Idaho on Thursday, July 17. For more information or to register, check out the calendar of events on the Idaho Rural Water Association’s website: https://www.idahoruralwater.com/Training/Calendar.aspx. And don’t forget to follow Schroeder Law Offices’ blog for more upcoming events and news on water law developments throughout the northwest!

More and more in Oregon, hopeful groundwater use applicants are finding that proposed uses of groundwater are denied by the Oregon Water Resources Department due to the agency’s finding of hydraulic connection with surface water sources and the potential for groundwater use to cause substantial interference with existing surface water rights. When the agency makes such findings, the Department looks at whether surface water is available to support the proposed new groundwater use, and, in most cases, it is not – either the administrative basin rules prohibit the new use, or surface water availability data shows that surface water is not available. In short, the proposed groundwater source is too connected to surface water for the agency to approve the application.

But an enigma exists in Oregon water law where the same source of groundwater is not connected enough to surface water to allow a surface-water-to-groundwater transfer. Transfers allow water right holders to change the terms of their water use rights. In some cases, surface water right holders may wish to change their surface water points of diversion to groundwater wells. That type of change is authorized under Oregon law, but the administrative rules impose certain distance and connectivity requirements. First, the well cannot be more than 500 feet from the authorized point of diversion, or else a geology report must accompany the application to attest to the connection between the sources of water. Second, the proposed groundwater use must affect the surface water source “similarly,” meaning the use of groundwater would result in stream depletion of at least 50 percent of the rate of appropriations within 10 days of pumping. The Oregon Water Resources Departments uses stream depletion modeling to determine if this factor is met.

It is often difficult for water users to predict whether their proposed use of groundwater will affect the surface water source similarly, especially because the Oregon Water Resources Department is far from consistent when it comes to its application of various models. However, in our experience, certain factors heavily affect the outcome of surface-water-to-groundwater transfers. For example, is the well existing or proposed? If the well is existing, the source aquifer for the groundwater use is certain, whereas the Department may make assumptions related to proposed wells. Applicants often do not include a certain depth figure for a proposed well in their transfer application because their well driller will need to make that determination during the drilling process. If the majority of the wells in the area of the proposed well are drilled into a confined aquifer, the Department is likely to assume that the proposed well will be similarly constructed in order to be productive, and may deny the application on the basis that the source of groundwater pumped from the proposed well will not be connected enough to the surface water source. Thus, the proposed source of groundwater should be unconfined, and the proposed well should be drilled extremely close to the authorized point of diversion to allow the applicant the best chance of success.

All too often, we talk to water users who were advised by other consultants that surface-water-to-groundwater transfers are automatically approved so long as the proposed well will be within 500 feet of the authorized surface water point of diversion. That is not the case! It can be difficult to get the Oregon Water Resources Department’s approval on these types of transfers, and therefore it is very important to understand the factors that affect the agency’s decision and the water user’s options.

Stay tuned to Schroeder Law Offices’ Water Law Blog for more water news that may affect you!