In a major water ruling on September 13, the Arizona Supreme Court said that the state has no priority “reserved” right to water on lands given it in trust from the state. The decision was considered a major setback for state government water right efforts.
The case was launched by various water right claimants suggesting that the state had overreached in its assessment of what water it controls.
In an appeal from the Gila River Adjudication, the court said “The State of Arizona filed an interlocutory appeal from an order issued in the general stream adjudications of the Gila River System and Source and the Little Colorado River System and Source. At issue is whether federal water rights were impliedly reserved on lands granted by the United States government to the State of Arizona to support education and other public institutions (“State Trust Lands”). We accepted review and now affirm the superior court’s ruling that there are no implied federal reserved water rights for State Trust Lands.”
The court’s analysis ranged back to the 1787 Northwest Ordinance, which donated land from federal control to states for some educational and other purposes.
It also focused to some degree on the 1910 enabling act which determined conditions under which Arizona and New Mexico could be admitted as states.
The court noted the lands receive from federal control had to be held in trust: “[A]ll lands hereby granted, including those which, having been heretofore granted to the said Territory, are hereby expressly transferred and confirmed to the said State, shall be by the said State held in trust, to be disposed of in whole or in part only in manner as herein provided and for the several objects specified in the respective granting and confirmatory provisions, and that the natural products and money proceeds of any of said lands shall be subject to the same trusts as the lands producing the same.” When it became a state, Arizona acceded to the conditions.
The court noted, “The state currently manages more than 9.2 million
acres of State Trust Lands, with approximately 1.4 million acres
in the Little Colorado River Basin and approximately 5.1 million
acres in the Gila River Basin. Although adjudication of claims
for waters in those two river systems continues, it is well
known that “the amount of surface water available [in Arizona]
is insufficient to satisfy all needs.””
After the state was challenged on the trust right, the court noted “The State moved for partial summary judgment in the Little Colorado and Gila River adjudications to recognize federal reserved water rights for State Trust Lands. After briefing and oral argument, the special master concluded that federal reserved water rights do not apply to such lands. He submitted a report to the superior court, which adopted the master’s findings and conclusions that support the court’s ruling that the reserved water rights doctrine is inapplicable to State Trust Lands. The court therefore denied the State’s motion and granted the other claimants’ cross-motions on that ground. The State sought interlocutory review. We granted
review on this issue of statewide importance to determine whether Congress impliedly reserved water rights on public land granted in trust to the state. We have jurisdiction under Article 6, Section 5(3) of the Arizona Constitution and the Special Procedural Orders for Interlocutory Appeals and Certifications.”
The court reviewed the concept of reserved water rights:
“Generally, water rights must be obtained under state law, even on federal lands. Cal. Or. Power Co. v. Beaver Portland Cement Co. (1935). In Arizona, groundwater is regulated by the Arizona Department of Water Resources and governed by the doctrine of reasonable use. A.R.S. § 45-451 et seq. (2012). The right to use surface water and sub-flow is governed by the doctrine of prior appropriation, §§ 45-141, -251(7), meaning the first to divert water and put it to beneficial use has priority against later diverters, § 45-151. See Ariz. Const. art. 17; In re the Gen. Adjudication of All Rights to Use Water in the Gila River Sys. & Source (2000).
“Under certain circumstances, however, the federal government can reserve water rights on its lands, and those rights have priority by operation of federal law. In re the Gen. Adjudication of All Rights to Use Water in the Gila River Sys. & Source (Gila III) (1999); N.M. Comm’r (citing Navajo Dev. Co. v. Sanderson (Colo. 1982)). Federal reserved water right holders can claim a priority date based on the establishment of a federal reservation regardless of whether the claimed water was actually put to use on that date.”
It reviewed the U.S. Supreme Court’s take on the reach of federal reserved water rights: “The Supreme Court further defined the parameters of the reserved water rights doctrine in Cappaert, stating that “when the Federal Government withdraws its land from the public domain and reserves it for a federal purpose,” it impliedly reserves appurtenant water “to the extent needed to accomplish the purpose of the reservation.” In New Mexico, the Supreme Court clarified that federal reserved water rights do not extend to a reservation’s secondary purposes.”
Linking state purposes to federal and including them under the federal umbrella takes the idea of reservation too far, the court said:
“The State argues that the Trust Lands were granted to fund congressionally identified institutions, and they therefore were reserved for a federal purpose, shown by the fact that Congress established a trust with federal enforcement power. We are
“Support of the common schools and other specified institutions undoubtedly serves the public interest. It is not,
however, a federal purpose. … Although the Enabling Act imposes federally enforceable trust obligations on the state, this retained
oversight does not authorize the federal government to make policy decisions on how the beneficiary institutions are administered. Indeed, “the schools, colleges, and universities provided for in this Act shall forever remain under the exclusive control of [Arizona].”
“Nor does the retained oversight indicate the federal government’s continued ownership of the trust lands or its authority to make policy decisions on how the lands are used. … The Enabling Act provides only a limited federal power to intercede in the event State Trust Lands are abused.
“Under a narrow exception to the state’s autonomy regarding use of State Trust Land, when a section-in-place grant is located in a national forest reserve, the “granted sections shall be administered as a part of [the] forest,” and the federal treasury will appropriate a proportionate share of the gross proceeds of the national forests within Arizona. That exception highlights that when the purpose of non-Indian reserved land is federal, the United States government retains control over the reservation’s management. Again, that is not the case with respect to State Trust Lands.”