Water Regulation Archive - Attorney Blog | Natural Resources, Commercial Law

Archive for the ‘Water Regulation’ Category

Water Law Revision Recommended

Posted on: September 14th, 2021
by David Ganje

South Dakota is in a state of drought, breaking century long records for extreme dryness. June 2021 has been the driest June in South Dakota over the past 127 recorded years, according to the government monitoring site, drought.gov. Another report from SDSU revealed that as of February of 2021, 89% of South Dakota was in some level of drought, with 50% being in severe drought or worse. As of August 2021, 100% of the state is facing abnormally dry conditions, while 92% of the state is experiencing moderate drought or worse, according to the U.S. Drought Monitor.

The governor of South Dakota declared a state of emergency in 2021 in response to the widespread drought conditions in the state. A recent news article indicated that all of South Dakota is suffering from drought conditions ranging from abnormally dry to extreme levels of drought.

The US Army Corps of Engineers estimate that the runoff amount for the year 2021 may be the 10th driest year since 1898, in the Upper Missouri River Basin, which constitutes the Missouri River water above Sioux City.

Mark Sweeney, a professor at the University of South Dakota, was recently quoted as saying, “Things like this should make us focus more on making sure we have plans in place for really severe droughts in this state so ultimately the economic impacts can be minimized to the best extent possible.”

The state has the legal authority to shut off water rights in times of emergencies. Historically the DENR, now known as the DANR, has issued orders to shut off junior surface water rights permits (based on a permit date or prior vested legal authority) in roughly 3 or 4 basins (A “basin” is “a natural or artificial land surface depression with or without perceptibly defined beds and banks to which surface runoff gravitates and collectively forms a flow of water continuously or intermittently in a definite direction.” Shut off orders have also been issued for irrigation rights. Most shut off orders direct water rights holders to stop using water are temporary. However, the current drought may very well result in more of this type of government action. From my experience I know that the staff of the DANR understands that this powerful ‘policing tool’ is not to be undertaken lightly. The DANR understands the importance of these water rights permits whether current, vested or otherwise legally created.

My objection is with the current legal process by which a shut off order should be issued, and under what fair processes such a decision can be made. The shut off procedure has never been considered by the state’s highest court. The current shut off procedure needs real change.

Due process rules and regulations of the state – which apply to other administrative contested matters – are not included in the South Dakota law which grants the chief engineer of the DANR the right to shut off a permit holder’s water rights. Current law states that the state’s chief engineer on his or her own, and without a hearing, may, after appropriate investigation, issue an order to shut off or limit a person or permit holder’s use of surface water or groundwater, or order them to plug or otherwise control a well. The current law is intended to protect those water rights of another user who has higher or earlier priority rights or to cause a user to discontinue the use of water to which that user has no legal right. The shut off law provides no rights to the user by way of advance notice and by way of providing the user with a description of the problem at hand. Nor does the law offer an opportunity to contest the ‘decision’ of the engineer or have a public hearing on the matter before the agency or before the state Water Management Board.

Courts in other jurisdictions have recognized that “once rights to use water are acquired, they become vested property rights. As such, they cannot be infringed by others or taken by governmental action without due process and just compensation.” At a minimum, the government must provide notice and opportunity for hearing appropriate to the nature of the action and reasonably calculated, under all the circumstances, to give parties notice of the proposed action and afford the water rights holder an opportunity to present arguments, objections, and facts. These safeguards should be placed in South Dakota law.

Reply for Petition to Appeal

Posted on: December 24th, 2020
by David Ganje

Reply-to-Petition-for-Appeal-11-23-2020

WATER RIGHTS AND WATER LAW WORKSHOP

Posted on: July 30th, 2018
by David Ganje

The Rapid City office of the United States Geological Survey (USGS) Dakota Water Science Center is hosting a public workshop on South Dakota water rights and water law. USGS has invited attorney David Ganje to give the workshop. The program will be held on September 18th at 10 a.m. Mountain time at 1608 Mt. View Road, Rapid City, SD 57702. The workshop is open to the general public. Admission is free but phone reservations are strongly recommended as space is limited. Reservations may be made by calling 605 385 0330.

Water and mineral rights workshop

Posted on: May 30th, 2018
by David Ganje

I was invited last week to speak at a workshop sponsored by the Capital Journal newspaper. The purpose of the workshop was to promote a better understanding of water rights and mineral rights in South Dakota. The Journal should be justly recognized for presenting these statewide issues to the public. More than a couple in the audience came forward afterward and asked me to thank the Capital Journal as the sponsor. Over the last few years the legislature has addressed some of the natural resource matters discussed in the workshop, but many issues remain.

The workshop audience consisted of farmers, water officials and professionals. The questions and comments were telling. A number of questions showed an understanding of some of the rules of the road on water rights and mineral interests. Yet a number of questions reflected a public laboring under ever present and always-circulating urban myths which compel us to do things we shouldn’t. Two subjects of note were discussed in the talk which were of particular interest to the audience based on several comments and follow-up questions.

One of the topics discussed was transferring gravel rights and mineral rights. I submitted that many transfers and sales I have observed often do not follow the proper procedure or use the correct language needed to make a good transfer. And the matter of reserving mineral rights reflects even more mistakes. I noted actual transactions in west river deals and east river deals. The standard sales contract provided by the South Dakota Real Estate Commission compounds the problem. The language in this standard agreement leaves the grantor at risk because mineral interests are not addressed. It’s one thing to be a free-trade state but when the state by its own recommended paperwork misleads the residents of the state it is quite a different matter. When one gives a warranty deed in South Dakota he is giving a ‘warranty’ of his ownership of the surface and all that lies below it. That’s a pretty powerful guarantee. Homework should be done before giving such a guarantee, but as I stated in the talk, it is not. This is further compounded by the fact that title insurance does not cover mineral interests, and indeed some title companies will not search or report mineral interests on a written title policy. The audience by their responses in the workshop acknowledged this was a concern. Wyoming, Colorado and Montana have addressed the problem. South Dakota has not. The purpose of Wyoming’s mineral disclosure law, according to the President of the Wyoming Realtor’s Association, was to avoid the unpleasant surprise encountered by people who bought property thinking that they owned the rights to minerals only to find that a third party would appear on their land, and start digging on the property. By making the buyer aware of the severance of mineral rights, Wyoming’s disclosure law allows a prospective purchaser to make a more informed decision when purchasing.

The second problem raised by the audience surprised me. I spent some time advocating the negotiation and compromise of water drainage disputes. These are the common neighbor versus neighbor as well as property owner versus township or county disputes that often occur. I was espousing Lincoln’s admonition to lawyers that it is a better thing to compromise than litigate whenever possible. I discussed water disputes and the use of mutual written easements. An easement is the right to use another property owner’s property for a specific purpose whether that be for a pipeline, for a right of way or for the drainage of surface waters. Another easement use might be granting a landlocked owner access to a public road. There are two general advantages to entering into an easement. The first is the property remains with the owner – title is not transferred. The second is a bundle of rights that together I call time, purpose and boundaries. Of these, ‘time’ was a surprise to me. The audience was misinformed on the question of a time limit on easements. The vast majority of mutual easements in South Dakota may be limited in time. This issue is overlooked or perhaps glossed over in the course of negotiating an easement. Surface drainage problems are a natural reason for considering the use of an easement. The upper landowner may be able to enter into a drainage easement with the lower landowner if the upper owner’s activity does not fall within the specific limits South Dakota has placed on surface drainage acts. Because the placement of a time limit is not well known, a fewer number of people may consider the use of a mutual easement on a drainage issue. To the point, even with a longer term problem such as surface drainage, a lower landowner need not become married to an agreement to allow drainage over his propery. He can place time limits within the terms and conditions of a mutual easement. A time limit will allow the parties to each review the fairness of the deal 3 or 5 years down the road. This makes it a short term courtship rather than a long term marriage. Nevertheless, by the comments in the audience it was apparent that not all knew such limits could be placed in an easement.

Such information shows the value and purpose of a workshop. I appreciated the opportunity to speak on these subjects. The Capital Journal water and mineral rights workshop was an excellent resource for the community and its readers.

Two proposals for managing water sources

Posted on: May 14th, 2018
by David Ganje

The state Water Management Board (WMB) was created in 1955. The legislature gave authority to the WMB with supervision of the waters of the state, including measurement, appropriation, and distribution of waters. The WMB consists of seven members appointed by the governor.

In this column I argue that the exercise of good water management choices is absent on the two subjects I discuss. I do not challenge the professionalism or commitment of the staff of the Department of Environment and Natural Resources (DENR). Nor do I criticize the good faith of the WMB whose members consist of volunteer citizens of the state appointed with the legal authority to decide who should have and who should be denied a permit to appropriate the waters of the state. I discuss two issues under which the WMB is given leadership with the assistance of the DENR.

Waters of the state are held in trust for the benefit of all the residents of the state, making members of the WMB legal trustees acting on behalf of the citizens of the state. Board members are charged with protecting and managing the state’s water supply for both surface and groundwater.

The following are the two issues reviewed in this opinion piece as well as my proposals. On the first issue the Board should require a permit applicant’s disclosure of past violations or bad acts. On the second issue the Board should require that large-quantity water use applicants provide a report showing that a permit, if granted, will not harm the recharge of the particular aquifer that is to be permitted.

The first problem: Water use permit applications do not require disclosure of past bad acts or of an applicant’s business relationship with other operations that may have had violations of the law. A properly drafted “bad actor” rule would allow the WMB to deny permits to applicants with a record of law violations or who have had poor compliance with other agency directives or rules. The state DENR enforces a law in another area of permitting (concentrated animal feedlot operations, with the acronym CAFO). Under this law an applicant must disclose material information on their permit paperwork. Bad actors cannot hide when making a CAFO permit application. However the WMB has no such rule for water permit applications. It should. The WMB has rulemaking authority to do this.

The second problem is one I have addressed before. It is not new advice. However your humble practitioner’s prior recommendation has fallen on deaf ears. A particular South Dakota statute requires the WMB to determine that the average estimated withdrawal of groundwater by an applicant does not exceed the average estimated annual recharge of water in the aquifer to be used. A circuit court a few years ago ruled that using historical data from existing state observation wells does not fulfill the requirements of the statute. In that case the court said that the statute “requires not only analyzing existing and historic drawdown and recharge to the [permitted] aquifer, but also how the applicant’s [requested] drawdowns will affect the recharge to the aquifer.” The judge ruled that the WMB’s findings which show a draw of 720,000 gallons per day failed to take into account what affect the use of 720,000 gallons per day would have on the particular aquifer. The court noted that a recharge study of the subject aquifer was not included in the permit application. The court reversed the approval of the permit given by the WMB.

And just this year the WMB approved a large-quantity groundwater permit without requiring a recharge study. Such a study should take into account what effect the applicant’s use has on the particular aquifer. The approved applicant in the recent matter would be able use up to 30,000 gallons per hour when pumping. In granting the permit the WMB relied on state observation wells and historical data without a specific report showing what the recharge would be on the identified water source. I previously recommended that a water permit applicant, who will use large quantities of water, provide an aquifer recharge study as a required part of the application process. For a sustainable system the amount of water withdrawn from a particular aquifer should be balanced with the amount of water returned (recharged) by nature to that particular aquifer. The state’s existing water use policy which forbids the “mining” of the public’s water would be better served by requiring this specific water information. The requirement for a recharge study does not exist in the state’s current water code or in WMB rules.

The WMB, as an agent of the people, has general supervision of the waters of the state which includes measurement, appropriation and distribution. The duty of an agent is to guide the events in his control to a good result. The WMB is empowered with authority to establish procedures and criteria for issuing water permits. I have tendered two proposals which should be adopted by the WMB.

David Ganje practices in the area of natural resources, environmental and commercial law.