43-

MICHIGAN LAW OF WATER ALLOCATION

Part II Evaluation:

PROTECTION OF INVESTMENT, THE PUBLIC INTEREST,
ARD STATE WATER POLICY


In recent years many discussions of water rights laws have revolved

around two major issues: Does the law adequately protect private invest-

ment, and does it give sufficient consideration to the public's interest

in optimum water use? Since this way of discussing water law has become

fairly familiar and since it is capable of yielding some fruitful conclu-

sions, the evaluation of Michigan law which follows will begin by focusing

on the extent to which the investment-protection and public-interest goals

are achieved. The law's success or failure to meet each goal separately

is discussed first. Next, the relationship of these goals to one another

is considered, and the broad outline of a water policy designed to achieve

both goals is suggested. This policy is finally translated into an outline

for possible legislative change.

Of course, the actual effect of the present law cannot be analyzed

here because the material available is insufficient, but it is possible to

evaluate the law's structure and therefore its promise.. Unless the law in

practice achieves far more than one may expect from its structure, the con-

clusions reached here ought to be accurate enough to be of some aid to

those looking for guidance in considering or drafting new legislation.


(1) Protection of Investment

Investment protection has always been a major goal of our economic

and legal system which does not countenance arbitrary interference. Even

interference justified by consideration of the public interest must be

paid for if substantial and if there is no sound reason for the investor


~I _____ _______ 1~_ __1_1~_1_


~1~_1_1~










-n 1r e S w tirs oust. -Inaf tte pibll lotWsrBt teef often mr re-


must mMines to SommIa wall-being. Vet the l a of 10we0a ridla" aA
other seawto at NtIue= water i anota meh that toas to ime invest-
ambt bowetw.

(a) ITe Ur atof terA ritsa has been t aeuutly ariticisa on tes
soOuan mwsly boeaMu it fe1s to oSaS IpotfMe eWt es of water to
tiara3Ur wer. or allU tbi, aS to pat beings the bSt cc wblmb It
ewe its flexsiae allontimon t e ir fhg1sy pW .mw rsmmhri-mbe b o-

et. At paisent "Iems mbl2a e age' hbS not bera *M Me bqOet la list-
ifg of vleos ftenos. Ihe rn Moattl SpF at Bthe taSwers to o another
has not bo m eiat oat at they hlbr not bee giMtatn- -W.tem .
(b) snett use" ase of atsm fIstetr, amt mwe it to wat to aB
Soal teato erase m r a tih ft xBer it VoA oiW am Iasmnt pre-
tetion either t i laJastian poeeylag.n sitne4t a coatat2tS ee, or
in ui fgc a& petatall amp ftua ctg Iwe sct.Mts fwre bh e s ks he
Wa 3 a iteotrtma u1 a pre wiou uu'u. at "first u-' as- a4sboe in ft-
teanl g wnei a M a has aot besa aullotaLy Wr ltd in OINW omse, nmr
a it o1 lr Vuht aSdt this ftstwr u to be cnsa It r"&toet to othw fstmt .
(a) aR owe aI*nsg a rweosmo le e is not a&b*p protected. Is us.
man coa*i.t tvl smoker stle e. asro t a et frt' aire to oprtlon
vater oMr salt it one oa the rmabfl users beelarg all the Ulo". Se
-n pmta4mead will often be the qper user ow the etM I uswr, but sevM
they hare no absolute amsurae, The upper use' is not so uzaless be ts

ppsrmast, ad the daomtle user though cuni4rably otlar St still lose
to Lnoter s damteno user.
(a) treep, wNo w s ot yt bep totsA ai tely be'e








45 -


the courts and one cannot say whether they will be considered under the

reasonable-use concept at all or be declared non-riparian or "unreasonable"

. se. Most consumptive uses are in this category including the use of

water for irrigation, which has grown in importance in recent years. The

one case dealing with irrigation did not allow it to interfere with domes-

tic users. It may be that in competition with non-domestic riparians, a

reasonable use of water for irrigation will be permitted. But until a case

so holds, irrigation investment would seem to be exceedingly hazardous.

(e) The courts have not yet decided what part of the land touching

the stream is "riparian". A limit such as the watershed or the smallest

tract in the chain of title could still be imposed, leaving many who

thought themselves riparians unprotected with respect to uses on some of

their land. Until the courts fix a limit or declare that all land touching

the stream at one point and under a single ownership is riparian, invest-

ments connected with using water on places considerably distant from the

stream seem risky. Moreover, as a result, the modicum of certainty produced

by the preference for riparians against non-riparians is greatly qualified.

(f) Not only the riparian law but other aspects of Michigan water law

produce uncertainty because of the many issues that thus far remain undeter-

mined by the courts. A riparian might unexpectedly be stopped froa using

his water because it turns out that he is located on public waters and that

his use interferes with public rights of fishing and fowling. The defini-

tion of "public waters" has undergone constant change and seems open to

further extension, and one cannot be too certain of the scope of public

rights in the future. The law of diffused surface water moreover has not

yet dealt with use-allocation questions, and rights to use "diffused ground

water" are somewhat hazy. In fact, it is possible that in same conflicts


I







- 46 -


between users of "percolating" water the court might still apply the rule

that each can use all he can get -- a rule which gives no one any reason-

able assurance. Finally, no law seems to have been developed to deal with

conflicts between those drawing their supply from water in different phases

of the hydrologic cycle. For example, it is not clear what protection a

stream-water user has against one who drills a well which interferes with

the stream's source of supply, or what protection a ground-water user is

entitled to against one whose consumption of diffused surface water dim-

inishes the flow of seepage water supplying the well.

(g) Some aspects of the law do tend to protect investment. There is,

of course, the constitutional protection against "taking" which has been

applied to water rights; and prescription is a means of acquiring definite

rights in a limited number of situations. Moreover, investors will not be

enjoined when sued by non-users, nor will the courts in balancing the equi-

ties enjoin the large investor for the benefit of a smaller one. Yet, the

smaller investor will be awarded damages, and where these do not exceed the

value of the water to the large investor, both tend to be protected from in-

curring serious losses. To these established rules should be added some di-

rections which the Michigan law might take in view of the trend of decisions

and the absence of contrary precedents. Zhe decisions leave the way open for

extension of a "reasonable-use" rule to all ground-water and diffused surface-

water use-allocation situations--a rule preferable to the catch-as-catch-can

rule which seems to have been established in other jurisdictions. It is

even possible that "reasonable use" will come to mean the same for water in

all phases of the hydrologic cycle, which would open the way for unified

administration and protect users of stream water against interference from

ground-water users, and so on. Another possible development is the court's

issuance of decrees prescribing apportionment of water or physical solutions,


__











thus apportioning the loss in the frequent conflicts between two users who

both have made extensive investments prior to the law suit. While the courts

have generally not apportioned water and have rarely ordered physical improve-

ments in conflicts between two riparians, there is no precedent in Michigan

prohibiting the granting of such remedies.


(2) The Public Interest

The public interest in water allocation is to conserve the resource and

to provide for its utilization in such a way as to produce the greatest

economic and cultural value. This implies that water should be allocated so

that after a consideration of alternative sources of supply and alternative

benefits and cost, the water ultimately is made available to those who can

produce the greatest value for the community.

(a) The Michigan law has not entirely ignored these considerations.

The courts have not encouraged waste of water as in some other jurisdictions.

Non-users seem unable to obtain an injunction nor more than nominal damages

for past injury, and in balancing the equities the courts have explicitly

considered the prosperity to the community brought about by the defendant's

use. Under riparian law the reasonable-use concept itself involves consi-

deration of many factors relevant to a determination of relative benefit to

the community, and since no one obtains a fixed right to a given quantity of

water, future enterprises more beneficial to the community are in a position

to obtain water now allocated to others. However, there is little evidence

that the courts have taken full advantage of these potentialities of the

riparian law. Community-benefit criteria have not been consistently ap-

plied, nor has their relationship to other factors designed to protect in-

vestment been stated explicitly. And considerations relevant to appraising

relative community-benefit, such as the availability of alternative sources


~1~1~~


-47-







- 48 -


of supply or the pattern of use made by others than the litigants, have sel-

dom been taken into account.

(b) Moreover, general preferences tend to obstruct flexibility and con-

sequently tend to prevent an independent appraisal of relative community-

benefit in each instance. Of these, the preference for the upper user bears

no relation to community-benefit in a climate where evaporation losses are

probably not too great. The preference for riparians against non-riparians

can at best be justified on the theory that more water would be lost by a

use on non-riparian land. But the use on non-contiguous land might be more

proximate to the stream than some uses on contiguous land, with the possible

consequence that less water is lost in transport. Moreover, only some of

the water transported to non-riparian land will be lost by evaporation, and

any greater seepage "losses" will increase ground-water supplies. Where

water is transported beyond the watershed, it will in part "return" to

another stream. The community at times might benefit more from ground-water

uses and uses on other streams than from always saving the return water for

the stream from which it was taken; yet, the preference for riparians does

not permit the court to consider these possibilities. However, in not yet

limiting the extent of riparian land to the watershed or some other arbitrary

boundary, Michigan law has retained some flexibility, though one cannot be

certain, as noted before, that an arbitrary limit will not be established

in the future.

Other preferences for domestic use and for public uses on public waters,

though likely to produce desirable results in certain instances, are prob-

ably inadequate generalizations of what best serves the community interest

at all times. Frequently, other uses may be more important to the community

than the recreation uses now always protected on certain lakes and streams;

or, at times, sportsmen may be in a better position than other users to avail







-49 -


themselves of alternative waters. Moreover, the criterion for "public

waters" on which recreation uses are preferred bears no parent relation to

the relative comanity-benefit of competing uses which this preference might

foreclose as compared to the benefit of competing uses on non-public waters,

imnane from public interference.

While the domestic-use preference might be justified as beneficial to

the community because it guarantees water for subsistence needs, it should

be pointed out that at times the use of a ground-water source instead might

accomplish the same purpose, and that stock-watering and swimming probably

amount to more than the landowner's minimum needs. Moreover, the preference

for domestic use as a generalization of what best serves the community should

be compared to the status of municipal water supply which is not a preferred

use and may frequently be prohibited absolutely from interfering with ri-

parians where, as will often be the case, the use of water is not on

riparian land and is characterized by the courts as not for a riparian purpose.

(c) Because of the undeveloped state of the law, little can be said about

community-benefit considerations in diffused surface- and ground-water alloca-

tion and in distribution between users of water in different phases of the

hydrologic cycle. If, as noted before, the riparian version of reasonable

use gradually is applied to all these uses of water, community benefit will be

a controlling factor to the extent that it is incorporated in the riparian

reasonable-use criterion. However, as the law of percolating waters stands

today, the possibility previously noted that those who do not transport water

may still be allowed to use all they can get, introduces a rule of chaos

detrimental to the public interest and seemingly based on an entirely irrele-

vant distinction between transporters and non-transporters. For while some

of the water not transported might return to the ground in the vicinity where


1_ ~1








-50 -


it is withdrawn, for use by persons in the general area, the public interest

may at times be better served if the returning water is used by persons in

the vicinity of the place to which the water is taken.

(d) A final word needs to be added about prescription. The rights ob-

tained thereunder out down the flexibility of Michigan water law. A definite

amount of water is generally allocated to one who obtains a prescriptive right.

The allocation will be forever except in some instances where forfeiture might

occur after a long period of non-use. Not only does prescription thus reduce

flexibility but the prescription law contains other elements which make it

totally unrelated to any considerations of the public interest. To illustrate,

why should it be possible to obtain a prescriptive right only against a down-

stream user? On the other hand, at times prescription helps to reduce some of

the rigidity of present water-allocation law. For example, it enables a non-

riparian to obtain rights against downstream riparians.


(3) Relationship Between Public Interest and Protection of Investment

The discussion thus far has been incomplete and perhaps misleading

because of its isolated treatment of the two postulated goals of protec-

tion of investment and benefit to the public interest. Some of the pre-

vious critical statements hold true even when their relationship is taken

into account. The non-riparian's inability to acquire a right to use water

enforceable against riparians tends to be a rule contrary to the public in-

terest without substantially increasing protection of investment. The law's

vagueness in certain areas, when due simply to its lack of development,

makes investment hazardous without necessarily benefiting the public interest.

However, a number of the previous conclusions require further analy-

sis in terms of the relationship between the two assumed goals of a water-

allocation law. For example, it was shown that prescription helps protect








51 -


investment but that it tends to interfere with the law's flexibility which

tends to further the public interest. Similarly, flexibility while bene-

ficial to the public interest tends to make investment hazardous. Without

further analysis, prescription and flexibility cannot be said to be either

desirable or undesirable. Moreover, the law's adamant preference for do-

mestic users, while interfering with flexibility, may, in addition to reflect-

ing a generalization that the water is always needed for life and health,

be based on a notion that domestic users are not in as good a position to

pay for water rights or to develop new water as, for example, municipalities

which also benefit the public interest. It is further apparent that in same

instances where the public-interest factor seems to be disregarded, the

damages awarded might simply reflect the loss to the investor and the

legitimate cost the user who more greatly benefits the public interest

is able to pay. And in some instances where the law seems to disregard the

protection-of-investment factor, there might not be any loss because the in-

vestor's past income has sufficiently made up for it. Even where an injunction

is granted rather than damages against the user whose use more greatly benefits

the public interest, he might be able to purchase water rights at a cost that

he is able to pay.

In fact, one alght a first glance think of the possible purchase and sale

of water rights as an adequate water use regulator, and conclude that one need

not be concerned with changes in the law, The least a person, who con2em tes

a new use that totally interferes with the pFrvious use, would have to pay

is a price slightly higher than what the water, the unusable or unsalable

equipment and other related assets are worth o 6 Irev ous user. This amount

would! seem to provide adequate investment protection under our economicsst

and would also, at ne L w- n user should be

able to pay so as to assure optimum productivity in the public interest.

*


~1~--I`~-------~~--cI--" ;
1 1-1~`"1-~'~------1-~---
---_lls~7







52 -

Where the new user's productivity does not justify his paying thii price, the

total cost to the community of the new use, which includes the scrapping of

thej rftvjwiun niunl'1u anana v lj not be Justified by the benefit that the

ac2 derives. For then the combined productivity of the resources

employed in the previous use (if continued) and of the additional resources

that would have been employed in the new use (if employed elsewhere) would

be greater than the productivity of the new use alone. This would seem to

indicate that the purchase and sale of water rights at the same time adequately

protects investment and insures the best 4jul ia on of rMarn in ahe

public interest.

In practice, however, the possibility of purchase and sale of water,

especially under present water law, will not necessarily result in a water

use pattern which favors the public interest while affording adequate pro-

tection of investment. Under the present law, a present user might lose

his rights without receiving any compensation and it is not clear that the

user to whom he loses the right is necessarily more productive. In fact,

a present user might sell at a value less than what the water and other

assets are worth to him, in order to avoid possible loss in court of his

right without being awarded compensation. Under such circumstances, ae-

cording to the previous analysis, the buyer's productivity might not jus-

tifyoallocation of the water to him. In other instances, potential sellers

ght prevent the use of the water in the public interest by making wrong

gue es about what the water's future market migt be. The chances that

k ch speculation will distort a smooth working of the buying-selling pro-

cess are increased by the fact that to gain anything substantial one who

wants to use water on non-riparian land mut do more than simply buy the right

which _a s le riparian has aist other riparians. He must buy from all

the riparians whose use he might affect or who in turn might affect his use.

_r~c--c--- --~---- -c".. ------- -- -








- 53 -


Similarly, even one intending to make use of the water only on riparian

la 4-4either as a purchaser or lessee of riparian land, or as one holding a

lesser interest) would buy a very uncertain right if he purchases from one

riparian only. To be sure of a given quantity of water, he must contract

with all the interrelated resent or wajtertila; a desire to

speculate on the part of only one of these might make it impossible to purchase.

Moreover, each of the interrelated present and potential users with whom a

potential buyer might contract would be so uncertain of the extent of his

right as against the rights of others that it would be difficult for him to

know what proportion of the total offering price he can rightfully demand.

Of ogrs sa though nt i l, of il above difficulties might be over-

come, provided there were no constitutional obstacles, if a public agency

were to conde na ter and then ,ell it to rivYa nat price asrx-

imatl Q .

There are, however, further elements in the purchase-sale process

which tend to make it not too e active a regulator for protecting the b-

lic interest. Without exhausting the list, the following are offered by

way of example. It might be desirable that the water policy favor optimum

pro vity for the state. The purchase-sale mechanism frequently tends

o reflect the cost-benefit ratio for the nation, which does not necessarily

satisfy local considered ons. Furthermore, many uses of water may produce

benefits to the public that are not measurable in money terms, or, even if

so measurable, are not revenue-producing. One reason might be that they

benefit those who can least afford to pay, so that money to pay for these

benefits would have to come out of taxes disproportionate to the benefit re-

ceived. The desirability of levying such taxes is a matter of tax policy

which involves many other independent considerations. Moreover, the market

might be imperfect for reasons of lack of competition. A monopoly might be








54 -


able to pay a higher price for water, even though it is less productive than

another user.

Thus, one may assume that a pattern of use achieving optimum public bene-

fit in a particular state or local area is not necessarily produced by the

purchase ang sale of water rights. An optimma use-pattern will exclude scme

who are able to pay more for the water. And those included may not even be

able to pay as a minimum the amount that the water and other unusable assets

are worth to the previous aestors. Consequently, a policy that achieves

a balance between the public interest andet protectionwill grant

investors a lesser amount so as to assure the availability of more water for

the benefit of the public if this lesser amount is sufficient to render in

vestments reasonably safe. For example, the unrealized original outlay for

unusable and unsalable capital, inclu any payment for water rights, plus

a fixed percentage of profitpfiiant a.ant. n t nnage

investment. This amount might then be minimum compensation awarded to pre-

vious investors, unless because of general economic conditions their unusable

assets and water are worth less to them.

The structure of any policy that seeks to further the public interest

and protect investment at the same time thus seems to contain at least these

major variables. One variable is the pattern of use that produces optimum

public benefit. Another is the amount of money made available by the govern-

ment as a matter of general policy, plus the amount that water users are able

to pay for water. And finally, there is the cost of development and improve-

ment to make more water available, plus the cost of minimum payments to pre-

vious investors. The final development and use pattern will achieve that op-

timum benefit to the community that is available at a cost not exceeding con-

tributions by the government and the amount users are able to pay for the

water, where minimum compensation to previous investors is one of the items of








55 -

cost. Previous users would, however, at times receive more than this minimum

compensation. This would be true, where, though the best water-use pattern

feasible in the light of general physical and economic limitations is put

into effect, the cost of development, plus minrimu compensation payments,

would not exhaust available funds.


(4) Administration

(a) When compared to the structure just outlined, the water rights law

of Michigan seems inadequate for achieving the proper balance between public

benefit and protection of investment. It contains many elements that seem

anachronistic, like prescription, some of the generalized preferences, and

also the possibility that different phases of the hydrologic cycle will be

treated differently. Furthermore, as has been shown, with respect to many

water use problems there is virtually no%. n p here it is most de-

veloped, namely, the reasonable-use rule of riparian law, the law may

be said at best to contain the correct philosophy and a list of many elements

that should be considered in carrying it out. But the interre ip of

elements is not sufficiently spelled out and the remedies adop~di ae too in-
-- fl, ater-use
flexible to lead one to believe that except by coincidence a proper water-use

policy is likely to be reflected by the outcane of future cases.

(b) This does not necessarily mean that judicial

not bemade more adequate. Bu itt will probably take legislation to da-

The final draft of this legislation will require a rpd de l of further co-

operative work by policy-makers, engineers, economists and lawyers. Some el-

ements of the legislation can be pointed to, however. It tt + -

is a police power measure to secure opt m use a onservatd *r r

the public interest, which at the same time seeks to protect the interest of

previous investors. The courts will be authorized to issue water apportion-
-----------







-56-

ent decrees that Include orders for improvement and small-scale development,

and provisions requiring water users to compensate those making improvements

and previous investors. The statute will provide that apportionment decrees

establish tha o Xin use pattern which will not cost more than those who

will ultimately use the water are able to pay, where one of the items of cost

is minimum compensation to previous investors. The power to apportion water

will include the power to reserve water for future u a oaocate water .

for a fixed period of time. To the extent that they can be generalized, the

statute will establish standards under which the courts can decide what con-

stitutes a use pattern productive of greatest public benefit; what the amount

is that the various users are able to pay for water; and what the amount of min-

inum compensation to previous investors must be. If the standard for an opti-

mum use pattern cannot be generalized in such a way as to be very helpful to

the courts, a sa e might be created to formulate water use plans for

the state and varila region within the state taking into acoountt aong
other things, relatively large-scale government development projects and state

tijole frer rgl~Catioon f water use, such as anti-puiticn measures. This

agency can be emIpowered to intervene in water &i&ocai urocee gdnsto repre-

sent the public interest and to propose to the court-oWima use patterns in

accordance with the state or regional water use plans. It might even be em-

powered to initiate such proceedings. Of course, any present or prospective

user will be able to initiate water allocation proceedings and to join all

other interrelated users as party defendants. Since this will give any pro-

spective user a chance to find out what rights he has for the present, no one

who invests in water use operations after the effective date of the statute

and who does not attain court approval will be guaranteed minimum investment

protection in a subsequent proceeding in which his water supply is stopped or

cut down. The statute will also provide for the appointment of special masters








-57-


by the courts to handle complicated allocation proceeding It will further

describe that the old distinctions between water in water cor ses, percolating

Jter and diffused surface waters will no longer hold and that all interre-
.----- ........--------- .
d uses will esider ib o __aCfccordi to the statutory

standards. In addition, it will declare that it shall no longer be possible

to Finally, most generalized preferences under

the riparian law shall be declared to be no longer operative to the extent

that they do not find their way into the statutory standard of optimum use

for public benefit. Th one referee that will probably have to be re-

Bl reaons is that in favor of public rights in public

waters.

(c) With respect to water in "watercourses", this statute on the whole

simply restates in modern terms a policy that the courts have been attempting

to carry out under the riparian rights doctrine, combined wiT.h fA1arle

of Balancing the Conveniences. Of course, more flexible remedies are provided

and it is difficult to predict whether the statute would be upheld; at least

it does not seem to provide for an obvious taking of "vested rights".

The "rights under riparian law" are not fixed but always changing in the light

of what seems to be audicial effort t protect investment and to further the

public interest at the same time. This seems to be the essential intent of

the statute. To some extent the outcome of cases would differ but this fact

alone might not invalidate the proposed law. The courts might give great

weight to the legislative competence to judge what is in the public interest,

and to the state's police power to conserve a scarce and essential natural re-

source. Elimination of some of the preferences under riparian law also might

not prove to be too serious an obstacle. The preference for the upper riparian,

to the extent that it is established at all, is largely due to the courts' not

apportioning water between two "reasonable" users in the past. Since the
i








58 -


satute provides for apportionment, this preference would no longer be needed.

The preference for d t cuse can be looked at as a judicial view as to what

best serves the public interest, an area in which the courts might defer

to the greater legislative competence. The preference for riparian users

against non-riparians is a more difficult one. Here it might be necessary

to provide for full compensation rather than the statutory minimum. How-

ever, this preference could be looked at as one that was necessary only so

long as different phases of the hydrologic cycle were administered separately

under what seemed to be separate rules. It could be regarded as a rule of

thumb to prevent the loss to riparians through evaporation, seepage or run-

off to another stream of water that would have returned to the same stream

if used on riparian land. Since the statute establishes uified administra-

tion of all interrelated uses of water, the riparian-land preference might

be regarded as unnecessary. This unified administration in turn might be up-

held as simply reflecting the trend of the Michigan cases described in earlier

sections of this paper.

(d) The proposed legislation would do away with many of the supposed
It..... -- II
disadvantages of judicial administration. There would no longer necessarily

be the case-by-case adjudication between two liti to the total

water situation n ths Ptftae &and area. Nor would most cases require after-

the-fact 1audiatian wwhen the investments have already been made and the

conflict is diar odl tUo late. The supposed judicial incompetence to handle

_ +u o -f h' 4hLy spec ialized problems will to a large extent be overcome

by the educative role the intervening administrative agency will play and by

the possible appointment of masters who are specialists.

On the oth d, the proposed allocation proceedings are likely to be

expensive litigants. Enforcement of complex apportionment decrees might

possibly result in protracted if not everlasting litigation. This might also








-59-


prove to be a sufficiently great burden on the judicial system and require

the apl Atament of more judges. The cost of judges and special masters to

the atate is likely to be much higher than the salaries of other administra-

tive personnel. From the point of view of carrying out an integrated water

policy, more important than these difficulties is the fact that large-scale-

water development projects and other state water regla tion under the rrnce

power would be integrated with water-use allocation only in a fair3l

way. The courts will have to accept the state's scheme for using police
-^>------ ---------------------_------- I---------I
power regulation and engaging in water development and the state in turn ul-

timately will have to accept the court's water-allocation pattern. Ideally,

a pattern of use allocation and a program of water development are intimately

interrelated and should be considered in terms of possible alternative com-

binations which produce optimum community benefit at the least cost. The State

water plan or plans submitted to the courts will accomplish this to some ex-

tent, but undoubtedly it would be more advantageous if the total decision could

be made at least initially by one agency.

(e) The above considerations suggest tha e of empowering an

administrative agency or agencies to allocate water to different users. As

was seen, the present Michigan law seems to authorize administrative decision
-~_
tp condemn, develop and regulate water in many respects. The statutory and

constitutional framework has up to now encouraged decentralized and uncoordinated

administration, which probably encourages a pattern of control reflecting

units of government and special interests. More consideration should be given

to a carefully planned approach from the perspective of the state as a whole.

The state's present program of control and development could be improved by

making it conform to state and regional water plans. These plans could be

enforced by the same state or regional agencies that draw them up by a re-

quirement that local and specialized agencies must obtain permits to engage

________--------"-- '" ^--------








-60-


in their particular water activities. These state and regional agencies

could also be given power to initiate development projects of their own.

It would of course be most advantageous if they were also given the au-

thority to issue permits for all uses of water.

The entire process of allocating water would be similar to the one

suggested for a system of judicial administration. Only, the agency or

agencies, unlike the judiciary, could supervise directly the total state

development and rle i^Aft --I- t adequate water-use pat-

terns. Pment according to ability to pay would under this procedure

include funds that could be raised by mfaxtion, and private users would

be required to participate up to their ability to pay, even in large-

scale development projects. Minimum compensation would still be guaranteed

to previous investors. The water-use pattern would be subject to change

as conditions chang in an unanticipated way. Frequently the cost of ob-

taining water to the individual user would be less because enforcement
-..... -- --
would be carried out on a day-to-day basis b v ^' y

and because the user would

litigation involving many parties. The agency in considering a number of

applications might in many instances decide, te oceedings,

their orno erin proposed uses fit into optimum use pattern. Such

decisions frequently might not be challenged. Of course, a person

denied a permit would have a right to administrative hearing and judicial

review. And after the agency has decided on a water-use pattern its allo-

scheme would be submitted to the court for "adudication. Since the

final "adjudication" would be by the courts, the proposal for administrative

handling of water use allocation is not likely to encounter any further con-

tional obstacles.*

*Some of the suggestions in Part II were made by David Haber, The Conservation
Foundation.

_________________________________________________Ii