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THE NEW MEXICO INTERSTATE STREAM COMMISSION PECOS VALLEY LAND AND WATER RIGHTS PURCHASE PROGRAM
AND
THE PLANNED DEMISE OF THE DOCTRINE OF PRIOR APPROPRIATIONS


(DECEMBER 2, 2004)

THE PECOS RIVER WATER RIGHTS PURCHASE PROGRAM

The New Mexico Interstate Stream Commission (ISC) began negotiating with landowners for the purchase 6,000 acres of irrigated land within the Carlsbad Irrigation District (CID) and up to12,000 acres of irrigated land above and below the Carlsbad Irrigation District.  The purchases will ensure New Mexico compliance with the Pecos River Compact.  The ISC identified land and water rights and is ready to by them.  

Before any purchases can take place, however, it is necessary under the Lewis case that the water users themselves in the area, the CID, the U.S. Bureau of Reclamation and the Pecos Valley Artesian Conservancy District (PVACD) agree to a settlement of claims that is then entered by the Fifth Judicial District Court. This ensures that the settlement cannot be later undone. The settlement was negotiated by elected city and county officials and water managers., The actual water users themselves were left out of the negotiations. There are now about 20 Objectors to the settlement.  Some own no water rights and simply objected when they recieved the mailing that invited people to review the settlement agreement.  It is not likely the settlement take place anytime soon.

DEMISE OF THE DOCTRINE OF PRIOR APPROPRIATIONS

The Doctrine of Prior Appropriations is the cornerstone of Western Water Law.  It is the single most important intangible factor attributable to a water right.  The water right is the legal right to divert the physical water resources before placing the water to beneficial use.  The priority date of a water right ensures that  the owner with the earliest priority date can cause those with later priority dates to terminate their water use so that he can obtain water.  This is why courts always determine both the quantity of water that can be diverted AND the priority date. Without a priority date, water rights have no value.

Beginning with the water shortages on the San Juan River several years ago, the Navajo Tribe, whose only right to divert water was reached by negotiation and does not even rise to the level of a water right,  suggested that because the level of water in Navajo Reservoir was falling to the level of their off-take ditch that provides water to the Navajo Indian Irrigation Project all water users that obtain water from the Navajo Reservoir should enter into a "shortage sharing" agreement (SSA).  The shortage sharing agreement was worked out and implemented.  The original agreement expired but it looks like it will be revised and extended as New Mexico enters into the  21st Century Megadrought.

With the success of the SSA on the San Juan River, along came crisis number two, the inability of New Mexico to deliver water to Texas on the Pecos River.  From 2001 to 2002, the State Engineer convened a Pecos River Consensus Committee to devise a method whereby New Mexico could meet its deliveries to Texas without having to issue a Priority Call. The State Engineer has generally failed to actively administer water on the Pecos River.  If a Priority Call were issued, Roswell and Artesia and possibly Carlsbad would be adversely affected because most of their water rights are very much junior to the irrigation rights of the CID which dated from 1887. 

Now the State Engineer is presently adjudicating the water rights in the CID and is re-adjudicating the water rights along the rest of the Pecos and its tributaries so that Priority Administration can take place.  The unforeseen consequence of the adjudication process is that everyone will know what their priority date is and can force a Priority Call.  To avoid the Priority Call, the Interstate Stream Commission and the Pecos River Consensus Committee convinced the Legislature to do several things.

First, the  legislature authorized funds to buy land and water rights.  This effort has stalled because the farmers are more interested in an income stream than the divestiture of a solid real property asset.  Under the priority administration system, this scheme does not offer much of a solution for two reasons.  First, the purchase of a water right by the state for its delivery to Texas is not a beneficial use and second because a senior water rights owner can still issue a call and shut down their entire plan.  To defeat this, it is important to defeat the priority administration system and the State Engineer has devised a surreptitious plan to do  that.

Second, the legislature authorized the creation of water banks where farmers could place their water rights such that they could be sold or leased by the water bank and they would receive some revenue.  Well this scheme represents a loss of control of the water right to some public entity.   It is also subject to a Priority Call if there are not enough water rights in the water bank to deliver the water to Texas.  And, once again, it is necessary for the State Engineer and the ISC to defeat the ability of a senior water rights holder to issue a Priority Call.

The solution that seems to have been found is the shortage sharing model.  Here is how it works.  In the Lewis Case on the Pecos, the CID and the BOR agree that they are not the owners of the water rights (as they have claimed) and in exchange, the farmers (who they now agree own the water rights) will give up their priority date.  Additionally, all other users in the Lower Pecos (and possibly everywhere on the Pecos).  It is intended to accomplish this by administering the water collectively.  This amounts to a shortage sharing plan.

The State Engineer has sent out about 2,000 notices to land owners from the upper reaches of the Pecos and its tributaries southward to the New Mexico - Texas state line.   The notice simply says that the proposed agreement for settlement of the case is available for public review.  It does not detail the terms and it does not explain the impact of the settlement.

The clear trend, now discernable, is for entire river basins to be re-adjudicated and as part of settlement officers, water rights owners will be offered the opportunity to agree to an arrangement by which they lose their priority dates.   This is evident not only in the agreements that are proposed but in the legislature's efforts to expand the concept of water banking.  Who is to determine if there is actually a shortage when major items in the state water budget are completely unknown? 

The major unaccounted for items in the water budget are the evapotranspiration and ecological use of water and evaporation from open man-made reservoir surfaces.  Neither have ever been administered.  For example, Lion's Gate Water, a Canadian company, has applied for up to 392,000 acre feet of water that evaporates from reservoirs along the Rio Grande.  It is completely unappropriated water and the State Engineer has allowed it to be squandered for 88 years.  Since the formation of the Middle Rio Grande Conservancy District, the State Engineer has allowed the bosque to expand uncontrollably so that it now occupies as much land as the land under irrigation.  In fact, the original intent behind the creation of the MRGCD was to reclaim lands lost to bosque and salination of the soils.

Should a water right be reduced in the Rio Grande because generations of he State Engineers have failed in his duty to administer the water.  That is, the State Engineer takes the position it is alright to reduce the amount of water you can have because of drought, for example,  while allowing massive volumes of water to be wasted from Elephant Butte and the bosque that never existed when the water rights were first perfected.

Consequently, what we see happening is that the concept of public "Water Banks" are setting the stage for "Shortage Sharing Administration" as a replacement of the "Doctrine of Prior Appropriations"  This is a mechanism that avoids the need for state and federal agencies to compensate the unsuspecting owners of water rights.  This is also a mechanism that avoids Priority Call Administration.  It is a scheme that will deprive water-rights owners of any value to their water rights.

MARCH 7, 2004 UPDATE

Not to be fooled, about 20 parties now have filed Notices of Intent to File Objections to the ISC Pecos River Plan. The Notice filed by the Tracy/Eddy Farms is linked to this page.  The arguments raised are sound and Paul Bloom represents them.

In the just concluded legislative session, the Interstate Stream Commission had hoped to obtain another $30 million from the legislature to complete the purchases.  Here is what happened. 

The ISC presented testimony before the House Agriculture Committee with Rep. Joe Stell presiding.  Mr. D.L. Sanders, Chief Legal Counsel for the State Engineer (I thought it was an ISC presentation) was asked by Joe Stell how long he thought it would take to resolve the objections.  D.L. said he thought they were minor and could be resolved in six months.

Now Joe  Stell has been around a  long time and no one pulls the wool over his eyes.  He cast his gaze around the room and said: "Is that my old friend Paul Bloom (former Chief Legal Counsel to Steve Reynolds) sitting back there?" He asked Paul how long he thought it would take to resolve the objections.   Paul reminded Joe Stell that Judge Harl Byrd had taken 6 years to resolve Threshold Question No. 3 (who owns the water rights in the Carlsbad Irrigation District) which opinion was filed on November 4, 1997 in the Fifth Judicial District.  Constitutional issues have not yet been dealt with.  So it has now been 13 years since Judge Byrd began looking at that single issue.

The result of this exchange was that not a single legislator would carry the ISC bill seeking additional funds.  To this observer, it looks like this settlement is DOA and certainly, those testifying before the legislature suffered a significant loss of credibility.  Is it time for a change of leadership on this issue and some out-of-the-box thinking?

We must have better and more equitable paradigms and more honesty from the State Engineer and the Interstate Stream Commission when dealing with New Mexicans. We must have Priority Administration.

MARCH 11, 2004 UPDATE

The date of the update is when WaterBank® becomes aware of actions in this matter.  On February 13, 2004, the Court in the Lewis Case entered an Order to Show Cause to those parties that had filed objections to the proposed settlement.  The Order requires that you must file your specific objections with the Court by March 31, 2004 and you must serve a copy on each of four attorneys.  Copies of the Order to Show Cause issued by the Court and an actual Order issued by the State Engineer's Office to an Objector are on this web site as PDF documents 1, 2, 3. 4, and 5.  You must show how your water rights will be adversely affected.  Pay particular attention to PDF file 4.   You will bear the initial burden of establishing a prima facie case that your water rights will be adversely affected in some manner.  This is usually a light burden.  It is highly recommended that you secure legal counsel in this matter.

MAY 3, 2004

Further to the March 7, 2004 update, it is now two month later.  We told you then that this case was nowhere near resolution.  Judge Bonem has now set a hearing for November to consider the formal objections that were filed.  Of course, the matter will not end with the November hearing.

To move matters along, the Hope Community Ditch Association and Louise and Francis Tracey of Carlsbad have just demanded that the State Engineer begin priority administration and terminate pumping by junior water rights owners.  In his usual style whereby he seeks to throw the blame back on to the party making a charge against him, he is reported to have said "We felt that with [the issuance of a permit to the HCDA] it avoided the need for a priority call."  "My reaction is, what's the point of them coming in for a supplemental well permit, if they're going to ask for a priority call?"

This reminds the writer of Mr. D'Antonio's reaction the the lawsuit filed by Dr. Turner against the Interstate Stream Commission for failure to provide records that had been requested in writing six times in eight months: "I've told [Dr. Turner] that he is welcome to come up here and copy anything he wants." 

Because of the poor likelihood of resolving these matters before the December 31, 2004 deadline set by the legislature for purchasing the land and water rights, the ISC has begun issuing lease-with the option to purchase agreements.   Such agreements may run afoul of the state law against perpetuities which limit the length of an option agreement.

In addition to the difficulties the ISC is having on the Pecos, the State Engineer is busily promulgating new water administration regulations that will give him weapons to force water rights owners to behave or have their water usage under their water rights regulated out of existence.  These regulations are still in a comment period.  Link to them here. [1][2] You should have them reviewed by your attorney to see if they impact you.

DECEMBER 2, 2004 UPDATE

 Towards the end of November 2004, the Judge handling this matter decided against objections filed by Mrs. Tracy and others thereby opening the door for the ISC to begin buying water rights and land in the Pecos Valley.  It is reported that this decision will enable the ISC to seek $30 million from the legislature next year.  But, not so fast.

We have not read the decision but will obtain a copy and publish it on our web site.  There are still a raft of issues and no doubt an appeal will be taken.  Of course the agreement requires that everyone loose the priority of their water rights, thereby making them worthless.  The Court has, in effect, conspired to take everyone's water rights.  If an appeal is taken, nothing will happen for another several years unless the appellate court and the supreme court put this matter on a fast track.  And then there is the possibility of a suit on Constitutional grounds in Federal Court.  We do not believe the final chapter is written in this matter.

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