Recent Developments in Water Law John Peck. May 17-18, 2018 University of Kansas School of Law

Recent Developments in Water Law John Peck May 17-18, 2018 University of Kansas School of Law

Recent Developments in Water Law John C. Peck Professor of Law University of Kansas School of Law Recent Developments in the Law CLE KU Law School May 17-18, 2018 I. Introduction A. Lecture coverage B. Helpful websites 1. Water rights search tool: http://hercules.kgs.ku.edu/geohydro/wimas/index.cfm 2. County maps: http://ksdot.maps.arcgis.com/apps/webappviewer/index.html?id=b90fa962 77e148f9800fb1b6a2d584f1 3. Kansas Division of Water Resources (DWR) general website: http://agriculture.ks.gov/divisions-programs/dwr 4. Websites of the 5 Groundwater management districts: http://www.gmd1.org/, http://www.gmd2.org/, etc. 5. Kansas Water Office (KWO): https://kwo.ks.gov/ C. Recent and upcoming water law articles: 1. J. D. Bielenberg, Comment: When Heavyweights Get Thirsty, Contracts Fall to the Wayside: A Case for Common Contract Principles and Stare Decisis [Kansas v. Nebraska, 135 S. Ct. 1042 (2015)], 55 Washb. L. J. 759 (2016). 2. John C. Peck, Burke W. Griggs, James R. May, & Irma S. Russell, Evolving Water Law and Management in the U.S., 20 U. Denver Water L. Rev. 1-51 (Fall 2017) & 153-216 (Spring 2017). 3. Kenneth Titus, A Lawyer Who Works with Water Also Relies on Math, 1

Math and the Law: A 2018 Journal Series, 87 J. Kan. B. Assoc. 17-18 (Feb. 2018). 4. Jacob Turner (a KU Law School 3L), Softening the Fall: Expanding Water Banks to Extend the Life of Kansas Aquifers, 28. J. Ks. Publ. L. & Pol. (2018) (upcoming). D. Water (personal property) versus water rights (real estate) E. Kansas Water Appropriation Act, K.S.A. 82a-701, et seq. F. Example of a typical irrigation water right in Kansas (place of use, type of use, point of diversion, priority date, water right DWR number, annual quantity, rate of diversion) II. Recent legislation A. 2017 Session, bills passed: 1. S.B. 46: a. Amended K.S.A. 82a-716 and -717a (requires parties with water rights allegedly impaired by other water users to exhaust administrative remedies before suing in court, and eliminated permission to file for an injunction, substituting an administrative action instead) b. Amended K.S.A. 82a-745 on water conservation areas (WCAs). c. Amended K.S.A. 821-1906 on notice requirements for WCAs d. Effective July 1, 2017 2. H.B. 2134, passed as a substitute for S.B. 60: a. Concerned fees for fertilizer inspection (K.S.A. 2-1205); reservoir inspection (K.S.A. 82a-303b); change in water appropriation right and storage rights (K.S.A. 82a-708b); term permit (K.S.A. 82a- 708c); field inspection (K.S.A. 82a-714); and temporary permit (K.S.A. 82a-727). b. Effective July 1, 2017 B. 2018 Session, bills passed: 2

1. S.B. 194: a. A carryover from last year s session, concerning groundwater management district (GMD) user fees enabled in K.S.A. 82a-1030 b. Increased the current $1.50 per acre-foot to $2.00 per acre-foot for groundwater withdrawn within the GMD c. Eliminated the power to charge more to users who pump water from within the GMD for land located outside the district d. Requires the GMD to assess the charge based on the verified claim and data if that such person s actual annual groundwater withdrawal is in a lesser amount than that allocated by the water right of such person e. Effective July 1, 2018 2. H.B. 2691: a. Amended K.S.A. 82a-736, which deals with multi-year flex accounts. b. Changed the date prescribed in 736 (f) from on or before October 1 to on or before December 31 of the first year of the multi-year flex account term for which the application is being made. c. Effective July 1, 2018. C. 2018 Session, Bills Not Passed, Died in Committee: 1. S.B. 379 (would have established the Kansas water law study commission, consisting of three principal investigators to conduct a comprehensive Kansas water law study to review several water law statutes, including the Kansas Water Appropriation Act) 2. H.B. 2452 (would have amended K.S.A. 58-3811, dealing with conservation easements, to state that conservation easements established after July 1, 2018, required as conditions to issuance of permits under Section 404 of the federal Clean Water Act, would be limited in duration to the life of the project and not be binding in perpetuity) 3. H.B. 2513: (would have established a new surface water protection fee 3

and a fund into which the fees would be deposited; and would have amended K.S.A. 82a-1345 dealing with Water Assurance District fees) 4. H.B. 2528 (would have dealt with several statutes: K.S.A. 79-4804 dealing with distributing money from the state water plan, amending to require that before any distributions are made, the director of accounts and reports must have transferred $8M from the state economic development initiatives fund to the state water plan fund; K.S.A. 82a-951, which originally created the state water plan fund, amending to prescribe in detail how $4M of the $8M would be used; and repealing K.S.A. 82a-953, which deals with transfers from the state general fund to the state water plan fund) 5. H.B. 2564 (would have allowed the chief engineer to promulgate rules and regulations that authorize the chief engineer to order the removal of any end gun on a center pivot irrigation system and to prohibit any future use... in areas of the state that are fully appropriated, closed to new appropriations, or within the boundaries of a GMD, and would have allowed GMDs to recommend amendments to GMD regulations that do the same thing) 6. H.B. 2665 (the same as S.B. 379, which would have established a water law study commission (see section II.C.1. above)) 7. H.B. 2726 (with a purpose of establishing a non-corn irrigation grant program and a low-water-use crop grant program, would have authorized the Kansas Water Office to issue and sell revenue bonds in the amount of $50M) 8. H.B. 2732 (dealt with water banks; would have permitted the Division of Conservation of the Kansas Department of Agriculture to create and administer water banks pursuant to the Kansas water banking act, K.S.A. 2017 Supp. 82a-761, et seq. ) III. DWR regulations, amended in the past year A. K.A.R. 5-5-9, 5-5-10, and 5-5-16 amended, provides new method of calculating consumptive use when a change is made from irrigation to another use B. K.A.R. 5-14-11 amended, makes changes by increasing penalties for late water use reports IV. Recent case: Update on Garetson Brothers v. American Warrior, Inc., 51 Kan. App. 2d, 347 P.3d P.3d 687 (2015) 4

A. Earlier district case on impairment: Duane File v. Solomon Valley Feedlot, Inc., et al. (Dist. Ct. of Mitchell Co., No 8831, Nov. 29, 1972 (district court adopted definition of impairment suggested by chief engineer) B. See Water Law chapter in the KBA Annual Survey beginning in 2015 for descriptions of the Garetson case. C. The trial court in the original case defined impairment under a dictionary definition and found an impairment and ordered defendants to refrain from pumping from the impairing junior wells. The appeals court affirmed, defining impairment slightly differently and finding no abuse of discretion. Defendants petitioned the supreme court for review. On January 25, 2016, the supreme court denied the petition. The district court, Judge Linda P. Gilmore, held a hearing on October 17, 2016 and issued her opinion on February 1, 2017, granting a permanent injunction to the plaintiffs. Defendants filed a motion to transfer the case to the Kansas Supreme Court, which the court denied in May 2017. D. In the 2017 legislative session, the legislature amended K.S.A. 82a-716 and -717, effective July 1, 2017, which after the amendment required that all administrative avenues be exhausted before going to district court for an injunction. Defendants then sought in the court of appeals to dismiss the case or to have it remanded back to the district court because Garetson had not completed the administrative review process. The court of appeals granted the motion, and the case was reinstated. Final briefs were filed in February, but oral arguments had not been scheduled by the date this outline was due. V. Local Enhanced Management Areas (LEMAs) and Proposed LEMAs A. Background on LEMAs: 1. 1972 enabling statute on groundwater management districts (GMDs), K.S.A. 82a-1021, et seq. 2. 1978 enabling statute on intensive groundwater use control areas (IGUCAs), K.S.A. 1036 to -1040(1978) 3. 1992, Walnut Creek IGUCA established by chief engineer in Barton, Rush, and Ness Counties 4. 2012, enabling statute on local enhanced management areas (LEMAs), K.S.A. 82a-1041 5. 2013, first LEMA established in GMD 4, Sheridan County 6 LEMA 5

B. Western Kansas GMD No. 1: In 2016, a LEMA was proposed in the GMD, but failed to get support. C. Southwest Kansas GMD No. 3: 1. The GMD is currently considering plans for a possible LEMA in northern Kearney and Finney Counties, but a 2017 survey was not very supportive and instead favors voluntary conservation. 2. For more information, see https://kfl2017.weebly.com/about.html. D. Northwest Kansas GMD No. 4 1. Sheridan No. 6 LEMA, renewed in November 2017, to run until 2022 2. Proposed district-wide LEMA, approved and established, 2018 a. For current information, including copies of all relevant documents, see http://agriculture.ks.gov/divisions-programs/dwr/managing-kansaswater-resources/local-enhanced-management-areas/gmd4-districtwide-lema b. June 8, 2017, GMD submitted revised proposed LEMA c. August 23, 2017, hearing officer Constance Owen conducted initial hearing d. September 23, 2017, Owen issued order finding that requirements of K.S.A. 82a-1041 had been met (conditions of K.S.A. 82a-1036 fulfilled, in the public interest, and reasonable boundaries). e. October 10, 2017 to December 11, 2017, interveners joined case and filed various motions f. December 22, 2017, second hearing held g. February 23, 2018, chief engineer issued order finding that initial management plan should be modified h. March 1, 2018, GMD requested establishment of LEMA incorporating proposed modifications 6

i. March 8, 2018, chief engineer accepted plan with proposed modifications j. April 13, 2018, chief engineer issued order establishing LEMA E. GMD No. 5: a proposed LEMA is being discussed VI. Water Conservation Areas (WACs) A. 2015 Enabling statute on water conservation areas, K.S.A. 82a-745 B. 2015 to present, several WCAs have been established in western Kansas, and several others are in the process of establishment. VII. Proposed Hays/Russell Water Transfer A. Background of the Kansas Water Transfer Act, 82a-1501, et seq. B. Hays/Russell Transfer proposal: 1. For copies of the various documents, see http://agriculture.ks.gov/divisions-programs/dwr/water-appropriation/chan ge-applications/hays-change-and-water-transfer 2. 1995, Hays purchased a ranch located in Edwards County, 65 miles south of the city and later sold an undivided interest to Russell. 3. June 2015, the cities filed Applications under K.S.A. 82a-708b to change the type of use from irrigation to municipal use. 4. January 2016, the cities filed an application for water transfer under K.S.A. 82a-1501, et seq. 5. February 2018, the cities filed a ranch modeling report. 6. Current status of the project, as reported in the Hays Daily Tribune: a. The newspaper said that the city commission had heard a report on the next steps in the process, including the fact that the master order which transfers the water rights usage from irrigation to public consumption among other changes should be issued in May, which will start off a series of events, including a public comment period and public hearing where the ranch is located. 7

b. The article described a Burns & McDonnell study, which concluded that a 10-year rolling average of 4,800 acre feet per year would sustain the aquifer for decades. c. For more information online, see http://www.hdnews.net/news/20180414/city-close-to-next-milesto ne-in-obtaining-r9-water. VIII. Interstate matters A. Kansas v. Colorado, 556 U.S. 98 No. 105 Original of the U.S. Supreme Court 1. See annual water law chapters in the KBA Annual Survey of the Law since 1990 for a continuing history of the case 2. (the following information was provided by Kenneth Titus, chief counsel, Kansas Department of Agriculture): a. In 2017, Kansas and Colorado reached an agreement that allowed the transfer of water from the Highland Canal into the permanent pool at John Martin Reservoir, in exchange for a set amount of water to be delivered to the Kansas Offset Account. b. The states have agreed to enter into a second, one-year agreement while continuing to evaluate the long-term effects of the agreement. c. The states continue to engage in talks on various long-standing issues. B. Kansas v. Nebraska and Colorado, 574 Kan. (2014) No. 126 Original, U.S. Supreme Court 1. See annual water law chapters in the KBA Annual Survey of the Law since the case was filed in 1998 for a history of the case. 2. (the following information was provided by Kenneth Titus, chief counsel, Kansas Department of Agriculture) a. In May 2017, the states adopted updated accounting procedures and approved all outstanding compact accountings from 2007 through 2015. b. On January 31, 2018, Nebraska and Colorado agreed to a $4M 8

settlement of Colorado s overuse of water from the North Fork of the Republican River that occurred prior to 2014. IX. Miscellaneous A. Eminent Domain 1. Power of eminent domain in private water company: a. In Suburban Water, Inc. V. Elder, et al (Case No. 15-CV-75, Dist. Ct. of Leavenworth Co., Kansas), a private water supply company sued to condemn land for a water well. b. Some defendants filed a separate injunction against the company, Elder, et al., v. Suburban Water Inc. (Case No. 2015-CV-203, Dist. Ct. of Leavenworth Co., Kan.), objecting on the basis that while the statute in question, K.S.A. 17-618, first enacted in 1868 and amended in 1871, gave eminent domain powers to hydraulic companies to condemn land, the water supply company was not a hydraulic company as was meant by the legislature in 1868. The trial court issued a preliminary injunction against the defendant. c. The parties in the injunction case settled both cases as to them prior to the hearing on the permanent injunction. d. As to the other defendants in the original condemnation action, the district court then ruled that Suburban Water, Inc., meets the definition of a hydraulic corporation, as that term was used in 1871... and therefore... has the power of condemnation pursuant to K.S.A. 26-504. 2. Power of eminent domain water supply and distribution district to condemn pipeline easement from railroad company a. (the following information was provided by Mike Armstrong, general manager, and Eric Arner, general counsel and director of legal auditing, WaterOne of Johnson County) b. Water supply and distribution districts incorporated under K.S.A. 19-3501, et seq. have the power of eminent domain pursuant to K.S.A. 26-501 to -516. (1) The district has the ability to condemn real property interests of railroads as long as the district taking the 9

interests does not substantially destroy or materially interfere with the present public use of the railroad. (2) City of Norton v. Lowden, 84 F.2d 663, 665 (10 th C.A. 1936). c. Railroads have onerous policies of charging high fees for access licenses, which are subject to termination. d. Condemnation awards have been much lower for WaterOne than the license fees being charged. (1) Appraisers explain that pipeline easements are subsurface rights that do not really interfere with the owner s use of the rail corridor to transport goods. (2) WaterOne always installs the water mains in an encasement pipe, so failure of the water main would not undermine the roadbed or impact the safe usage of the railway. B. Quivira National Wildlife Refuse Impairment Complaint 1. Background a. The Walnut Creek IGUCA established in 1992 set in motion discussions and negotiations in the Rattlesnake Creek basin, located south of the Walnut Creek basin. b. A cooperative agreement was signed in 1994 by 4 partners: Big Bend GMD No.5, the Water Protection Association of Central Kansas (WPACK), DWR, and the U.S. Fish and Wildlife service; they submitted a management plan that was approved by the chief engineer, with a 12-year implementation schedule that began in 2000. c. Periodic reviews of the plan were made through 2012. 2. In 2013, the U.S. Fish and Wildlife Service, which holds a senior water right on Rattlesnake Creek for the benefit of the Quivira National Wildlife Refuge requested that DWR conduct an impairment investigation. 10

3. In its 2016 report, DWR concluded that [u]nless groundwater pumping operations change significantly in the Rattlesnake Creek Basin, it is reasonable to assume that junior groundwater pumping will prevent the Refuge from exercising its water right regularly in the future. 4. Interested parties in the basin are proposing various potential solutions to the impairment issue. a. All the documents filed to date on the matter are available on the DWR website at http://agriculture.ks.gov/divisions-programs/dwr/water-appropriati on/impairment-complaints/quivira-national-wildlife-refuge. b. The website shows 25 such document filed since April 1, 2017, which include matters such as comments on the proposed impairment by various stakeholders, video recordings, a draft LEMA proposal, maps, letters, modeling correspondence, etc. c. The August Hi-Lites newsletter of GMD No. 5 reported that the GMD had submitted two augmentation plans to the U.S. Fish & Wildlife Service, both of which had been rejected and that the GMD was continuing to work with DWR to develop strategies that will provide water to Quivira National Wildlife Refuge while minimizing the impact to the local economy. C. River Channel Changes 1. General principles a. River channel ownership in Kansas: (1) For navigable rivers (Missouri, Kansas, and Arkansas Rivers), the state owns the beds. (2) For non-navigable streams (all the rest), the riparian owners own to center of the stream. b. River channel movement: (1) For accretion (slow movement of river channel), land boundaries move with channel changes. 11

(2) For avulsion (sudden change in river channel due to flood, breach in ox-bow, etc.), land boundaries remain the same as just prior to the avulsion. c. Navigable rivers (Missouri, Kansas, Arkansas Rivers) 2. Some authority (1) For accretion, the same rules are applied as above. (2) For avulsion, the state acquires the bed of the river under the new channel and sells the old river bed K.S.A. 82a- 201, et seq. a. Murray v. State, 226 Kan. 26 (1979) (Kansas River channel, avulsion v. accretion) b. A.G. Op. No. 1997-45 (acquisition by state of new channel where stream altered) 3. Example Kansas River matter a. Description b. Outcome 4. Example Arkansas River matter a. Att. Gen. Op. No. 2000-51: Waters and Watercourses Navigable Waters Arkansas River; Navigability; Ownership of Bed and Banks (1) [I]t is confusing when current cases, most dealing with how accretion and avulsion affect ownership of adjoining lands, refer to older cases that state that the riparian owner s title extends to the river s banks, to the river s margin, and to the river s edge. (citations omitted) (2) In sum, the high water mark on the bed and banks of the Arkansas River constitutes the boundary between land owned by the State and land owned by the adjoining riparian owner. Thus the bed and banks, up to the line to which water rises in time of ordinary high water, are public property.... 12

D. Missouri River, Corps of Engineer s case 1. 372 plaintiffs (farmers, landowners, and business owners in 6 states) sued the Corps of Engineers in the federal court of claims seeking damages caused by flooding, claiming that the policies of the Corps favored wildlife protection over plaintiffs economic interests) 2. Judge Nancy B. Firestone agreed. The next phase of the lawsuit will determine whether the property owners are entitled to compensation from the government. 3. For the newspaper account of the case, see http://www.kansascity.com/news/local/article205100154.html. E. Coastal flooding: rising seas in Miami, Florida (from the Wall Street Journal) 1. Lower elevation houses are trading at discounts compared to those at higher elevations. 2. Miami Beach is spending $500M for infrastructure upgrades to reduce flooding. 3. Research from the U. of Colorado Boulder and Penn State concludes that the trend in Miami is playing out across the country. 4. For the online story, see Rising Seas Reshape Miami home Market, Wall Street Journal, April 21-22, 2018 https://www.wsj.com/articles/climate-fears-reshape-miamis-housing-mark et-1524225600. (requires subscription) (global warming is not mentioned in the article, but rising sea levels and floods are mentioned) F. Central Kansas Water Bank Association (CKWBA) update 1. Water banks may be incorporated under K.S.A. 821-761 through -773. 2. The CKWBA was established in 2005. 3. As required by the enabling statute, banks must be reviewed every 5 years. 4. In 2011, an evaluation team recommended renewal, along with some changes, which were approved by the chief engineer in 2013. 5. In 2018, the chief engineer convened a review committee, which is 13

working on the current review. G. Drought status in Kansas: For online map and data, see https://www.drought.gov/drought/states/kansas 14