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<br />:.0 <br />I." <br />~'\l <br />N <br /> <br />':~,J <br /> <br />o <br /> <br />'.-' , <br /> <br /> <br />J <br />"{ <br /> <br />+ <br /> <br />',_,i <br /> <br /> <br />1993] <br /> <br />CENTRAL UTAH PROJECT COMPLETION ACT <br /> <br />181 <br /> <br />results from conservation measures. "126 The Oregon Water Resources <br />Commission, which administers the law and is dominated by agricultur- <br />al interests, limits this definition to water that is "irretrievably lost," <br />eliminating all conservation measures that would injure downstream <br />water rights.l2ll The statute also requires that twenty-five percent of <br />the saved water be returned to the state for instream flOWS,127 While <br />water market proponents believe Oregon's new law vindicates their <br />theory,l28 to date, only one application to sell or lease water has been <br />made under the statute, 129 <br />Oregon's attempt has failed for several reasons. At the institution- <br />al1evel, the statute's provisions hinder its intent. For example, <br />returning twenty-five percent of the transferred water to streams <br />resembles a tax that may discourage water transfers. This tax, <br />designed to satisfy the interests of environmentalists, distorts the <br />market and diminishes incentives for water transfers. At the psycholog- <br />ical and social level, water users may be reluctant to transfer their <br />rights because they perceive risks associated with transferring water. <br />The most likely explanation however, is that the legislature, by <br />restricting the term .conserved water" to mean only water that is <br />irretrievably lost, unsuccessfully tried to simultaneously develop water <br />markets while still fully guaranteeing downstream water rights. <br />Protecting the rights of downstream users, by refusing to disrupt <br />traditional water laws, did not free up sufficient water. Absent water <br />resources, there can be no water market. <br />Two years later, another state attempted to reform its water <br />allocation policies. In 1989 Montana enacted a limited water leasing <br />law;" which authorizes the Montana Department ofFish, Wildlife, <br />and Parks (DFWP) to lease water rights to improve instream flows on <br />five selected streams.1S1 Like the Oregon statute, Montana's legisla- <br />tion fails to overcome the institutional and social barriers that have <br />inhibited water marketing. First, the legislation safeguards the return <br /> <br />'" Id. f 537.455(2). <br />'"~ Telephone Interview with Karen Russel. Waterwatch of Oregon, Inc. (Apr, 22, 1992). <br />'" OR. REv. STAT. f 537.470(3). The percentage of water returned to the state for instream <br />flows is "'presumed to be 25% unless reasons dictate a lesser or greater percentage.- D. Craig <br />Bell" Norman K. Johnson, S14u Water Lows and Feckral Waur U..., TM History ofConfli<t, <br />/he Prospecto for Accommcdation. 21 ENVTL. L. I, 20 (1991). <br />'" See Bell "Johnson, supra note 125, at 19-20. <br />m Telephone Interview with Karen Russel, supra. Dote 124. <br />... MONT. CODE ANN. If 85.2-436 to -437 (1991), <br />III See Morris. .upra note 99, at 276-88. <br />