Last Friday Pacific Legal Foundation filed this comment letter with the United States Forest Service, in opposition to a proposed policy that would prevent the owners of private water rights from transferring them under state law from existing uses to other more economical uses.
The American West has an interesting history of privately held rights to use water on federal lands. The United States adopted an active policy for settling its new territories through the Homestead Act, which led to private ownership of most land between the Mississippi and the Rocky Mountains, as well as on the West Coast. But in the Great Basin and other Western high desert regions (generally the area between the Cascade and Sierra Mountains on the West and the Rockies on the East), there were relatively few takers for homesteads. This region is generally arid; only those limited areas with adequate surface water supplies were ultimately homesteaded.
That doesn’t mean that the rest of the land lay unproductive. By federal policy, most of the remaining public land in the West remained open for cattle grazing, timber production, and mining. Section 9 of the Mining Act of 1866 explicitly deferred to state law on the question of whether and how these miners, ranchers, and others established water rights on the public lands they were using. By the end of the Nineteenth Century, the result was a patchwork, in which the federal government owned most of the land, while private parties owned extensive water rights for stockwatering and mining and milling, as well as for farming in those areas with enough water for irrigation.
As the Progressive Era took hold in America, Congress delegated increasing control over the Western public lands to administrative agencies. It created the Forest Service as part of the Agriculture Department in 1905, to conserve timber stands on public lands to prevent deforestation and the flooding that routinely resulted from removing trees above the snow line. The clear purpose of this regulation was to ensure that plentiful supplies of timber would continue to be available for private companies to harvest.
As the Progressive Era in natural resource management gave way to the modern environmental movement in the 1960s, the Forest Service gradually abandoned its mission of making productive national forest lands available for commercial and recreational use for all Americans. In many places now, the Forest Service does its best to close the forests and force commercial and recreational uses out. Since the federal government largely owns the forests, the Service has a lot of leverage to do this. But private water rights within the national forests have been a barrier to the fulfilling the Service’s exclusionary goal. To get around this, the Forest Service first claimed that it owned privately established water rights, but the United States Supreme Court clearly rebuffed the agency in United States v. New Mexico.
Since that set back, the Service has turned to its permitting power to coerce regulated parties into giving up their water rights to the government as a condition of maintaining their legitimate permitted uses. PLF’s comment letter objects to this practice in the issuance and renewal of permits to operate ski facilities in the national forests. Any demand for property made by a public agency during a permitting process must meet the United States Supreme Court’s test established in PLF’s landmark case of Nollan v. California Coastal Commission: the Forest Service may not use its permitting process as a scheme of extortion to exact property from permit seekers, where the government would have to pay compensation if it took the property outside of the permitting context.