The Water Report: Water Rights, Water Quality and Water Solutions in the West Issue 17

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Issue #17 The Water Report Water Banking Definitions Authority Standard Interior's Acceptance under those regulations. Those parties must reside either in a "storing state," or a "consuming state" and must be "authorized entities" in those states. DEFINITIONS INCLUDE: • "STORING STATE" means a Lower Division State in which water is stored off the mainstream in accordance with a Storage and Interstate Release Agreement for future use in that State. 43 C.F.R. 414.2. • "CONSUMING STATE" means a Lower Division State where ICUA will be used. 43 C.F. R. 414.2. • "AUTHORIZED ENTITY" means: (1) An entity in a Storing State which is expressly authorized pursuant to the laws of that State to enter into Storage and Interstate Release Agreements and develop ICUA ( "storing entity "); or (2) An entity in a Consuming State which has authority under the laws of that State to enter into Storage and Interstate Release Agreements and acquire the right to use ICUA ( "consuming entity "). See 43 C. F.R. 414.2 As can be seen, the definitions differ as between storing states and consuming states. The conclusion has previously thus been that some greater specificity in authorizing statues must exist in order to empower authorized entities in storing states than in consuming states. The 2004 Nevada - California agreement alters this conclusion. Whereas once it was thought that an express statutory mention of authority to enter agreements pursuant to 43 C.F.R. Part 414 was required to create "authorized entity" status in a storing state, a more general "necessary and proper" authority may be sufficient. THE 2004 NEVADA - CALIFORNIA SIRA PROVIDES THAT: The Metropolitan Water District of Southern California (MWD) was incorporated on December 6, 1928 pursuant to the Metropolitan Water District Act of the State of California. In accordance with the provisions of that act, MWD is expressly authorized to exercise such powers as are necessary and proper to carry out the objects and purposes of the district, including the acquisition of water rights within and without the state, and the storage and transport of water. (West's California Water Code Appendix §§ 109 -120 and 109 -130.) California law authorizes MWD to contract with any public or private corporation for the purpose of carrying out any of its powers (California Public Contract Code § 21562) In accordance with the authority granted by California law, MWD is expressly granted sufficient authority pursuant to which it may enter into Storage and Interstate Release Agreements and develop Intentionally Created Unused Apportionment (ICUA) as an "authorized entity" pursuant to 43 C.F.R. 414.2 (1). MWD has a contract with the Secretary entered under section 5 of the Boulder Canyon Project Act for the storage and delivery of Colorado River water. The Secretary's acceptance of this expression of transactional authority, through acceptance of the 2004 Nevada - California SIRA as a party, confirms that "necessary and proper" authority derived from other express authority is sufficient. The import of this acceptance is the potential involvement of additional storing state parties in Colorado River interstate water transactions. Chapter Three: The Future The future of interstate water transactions in the lower basin of the Colorado River is, as with all futures, yet to be seen. That there will be transactions in the future is certain. That the future will include growing demand for a limited resource is also certain. Flexibility, fungibility and transactional opportunity, within the constraints of governmental systems requiring security, continuity and protection of the public interest, are essential to enhancement of the Colorado River resource's meeting that demand. Innovation in the use of the Secretary's Offstream Banking Regulations may turn out to be a more valuable tool in realizing that objective than first we hoped. FOR ADDITIONAL INFORMATION: JAMES DAVENPORT, 702/ 486 -2689, or email: javenport@crc.nv.gov COLORADO RIVER COMMISSION OF NEVADA WEBSITE: http: / /cre.nv.gov /water.htm James Davenport is the Chief, Water Division, of the Colorado River Commission of Nevada; Special Deputy Attorney General of the State of Nevada. He received his law degree from Willamette University in 1977 and is a member of the Nevada and Washington Bar Associations. Mr. Davenport is the author of Nevada Water Law (2003), a compendium of Nevada cases and statutes. He specializes in water, energy, nuclear materials, and real property law. 14 CopyrightO 2005 Envirotech Publications; Reproduction without permission strictly prohibited.