TRANSBASIN DIVERolON OF WATER*
CORWIN W. JOHNSONt AND LARRY D. KNIPPA**
The rapid growth of urban-industrial areas in Texas and the nation
has often generated a need for water which exceeds the local supply.
The modern; large-scale projects designed to meet future demands
typically feature transfers from watersheds of bountiful supply; such
proposals cause the inhabitants of the plentiful regions to fear for their
own future needs, and these fears are often translated into legislation
restrictive of interbasin transfers. In exploring the nature of these
restrictions on inter-watershed diversions the authors seek to deter-
mine the effect of these limitations upon the goal of efficient and
equitable administration of our water resources, and they suggest
what legal protection should be given to the basins of origin.
Massive movements of water over great distances from regions gener-
ously endowed by nature to places not so favored are prominent features of
modern, large-scale water resources development projects. As demands for
water mount with population growth and industrial expansion, such inter-
basin transfers increasingly tend to involve larger volumes of water transported
over longer distances by bolder engineering works.
Californians in the 1930's started construction of the Colorado Aqueduct,
through which water was lifted over mountains and transported across desert
lands for over 240 miles.1 Today they are engaged in the Feather River Proj-
ect; this endeavor will provide for the diversion of water by a complex system
of pumps, aqueducts, tunnels, and reservoirs a distance of over 750 miles
from relatively water-affluent northern California to the parched southern tip
of the state. For tomorrow's needs, they are already considering water
sources in Oregon, Washington, and even Canada.2 Texans are seriously
viewing several projects involving inter-watershed transfers, the most spectac-
ular being the Texas Basins Project, known popularly as the Big Ditch. This
project evolves from a proposal, bpsed upon more than a decade of study by
the Bureau of Reclamation, that nearly all major Texas river basins be
linked by a 418-mile canal which, together with other facilities, will per-
mit water to be moved to areas of need along the entire coastal plain of
*The authors gratefully acknowledge that the research upon which this article is
based was supported by a grant by The University of Texas Center for Research in
Water Resources from funds made available by the National Science Foundation Institu-
tional Grant for 1964-1965.
t Professor of Law, The University of Texas. B.A., 1939, J.D., 1941, The University
** Article Editor, Texas Law Revicw. B.A., 1960, The University of Texas.
1 See generally Warne, California Pioneers New Water Development Concepts, 2
NATURAL RESOURCES J. 248 (1962).
2 Western Water News, June 1965, p. 1, col. 4; id., May 1965, p. 1, col. 1.
TEXAS LAW REVIEW
the Texas Gulf arc.3 Another Texas project, the Northeast Diversion, envi-
Ssions a capture of surplus waters from the Red, Sulphur, and Cypress Rivers
and conveyance of these waters via pipelines or canals to the central and
western regions of the state.4 Texas' largest cities, Dallas and Houston, have
contracted to obtain water from other basins, and San Antonio has waged
a long and so far unsuccessful struggle in the courts to obtain water from the
Guadalupe River.5 The High Plains of Texas, facing depletion of ground
water resources, and having already undertaken to divert the flow of the
Canadian River (the only substantial stream in the region) and pump it
through pipelines to eleven cities, must resort to importation of water from
Such proposals typically generate fears that watersheds from which it
is proposed to divert large amounts of water will be harmed thereby. Questions
are raised as to the nature of legal protection which should be accorded such
I. THE WATERSHED LIMITATION IN THE RIPARIAN DOCTRINE
According to traditional riparian doctrine, stream water may be used
only upon riparian land, and riparian land is defined as embracing only land
within the watershed.7 This is consistent with the principle that a riparian
owner's rights to use stream water are not limited to his existing uses, but
include future uses as well. In other words, the riparian right is not lost by
nonuse and the riparian may commence new water uses at any time and in
any amount, as long as he does not unreasonably interfere with uses by other
riparians. The watershed limitation is thus merely a means of protecting the
riparian rights of others, by tending to make return flow available if needed
in the future. As is well known, this simple system of water rights was
found to be inadequate in regions of scarce water supply. The riparian system
was completely rejected in some states in favor of the prior appropriation
3 TEX. WATER COMMON, TEXAS WATER PLANNING 13 (1964).
4 Id. at 9-10.
5 Id. at 13-14; see note 31 infra and text accompanying notes 54-56 infra.
6 H.R. Doc. No. 678, 81st Cong., 2d Sess. 7-8 (1950).
A CONTINUING committee was set up by the West Texas Water Institute
to push for a feasibility study recommended by the Moss sub-committee of the
Senate Interior Cmte on the North American Water & Power Alliance. Roland
P. Kelly of the Parsons Co. of Los Angeles suggested that linking of the Yukon
with Western U.S. rivers could supply the Panhandle and South Plains of Texas
with 5.3 million ac.ft. a year.
Tex. Water Report, June 10, 1965, p. 4; see United States v. Shurbert, 347 F.2d 103
(5th Cir. 1965), where the court held that an irrigator in the High Plains was entitled to
a cost depletion deduction because of the diminishing supply of ground water in the area.
For a list of Texas interbasin transfers, see H.R. Doc. No. 494, 87th Cong., 2d Sess. pt. 3,
at 10-11 (1962). See McCall, Inter-Basin Transfers of Water, 1959 UNIVERSITY OF TEXAS
PROCEEDINGS ON WATER LAW 125, 137 n.15, for a compilation of such projects in other
states and in foreign countries.
S1 WEIL, WATER RIGHTS IN THE WESTERN STATES 773 (3d ed. 1911).
TRANSBASIN DIVERSION OF WATER
,, tem, while in others it was sharply curtailed and combined with prior
The prior appropriation doctrine, at least as formulated by the courts
in early cases, did not limit water use to the watershed. In its landmark opinion
ejectingg riparianism, the Colorado Supreme Court made it clear that it
filt that limiting water use to the watershed was a bad principle and was not
i be engrafted upon the doctrine of prior appropriation:
To apply the rule contended for would prevent the useful and profit-
able cultivation of the productive soil, and sanction the waste of
water upon the more sterile lands.. Under the principle contended
for, a party owning land ten miles from the stream, but in the valley
thereof, might deprive a prior appropriator of the water diverted
therefrom whose lands are within a thousand yards, but just beyond
an intervening divide.9
The same policy has been announced by the Montana Supreme Court.10
However, as is subsequently developed in this paper, statutes which are
restrictive of transbasin diversions have been enacted in some prior appropria-
In states seeking to apply a combined riparian-prior appropriation system,
the watershed limitation receives uneven treatment. To the extent that the
role of riparianism is diminished, there is likely to be a consequential les-
sening of the significance of the watershed limitation. Riparian rights are con-
fined in Texas to the "normal flow" and do not attach to "storm and flood
waters."" Although these terms are not entirely clear,12 it seems likely that
most or all of the water available for interbasin transfer (i.e., water stored in
reservoirs) is in the category of "storm and flood waters."
In addition to the decline of the riparian watershed policy caused by
the emergence of prior appropriation, there are other significant inroads upon
that policy. The modern trend of the cases is to refrain from granting relief
against transbasin diversions to riparians who have no present need for the
water.'3 Statutes directed toward the same objective have been enacted in
8 For an able account of these developments, see Trelease, Coordination of Riparian
and Appropriative Rights to the Use of Water, 33 TEXAS L. REv. 24 (1954).
9 Coffin v. The Left Hand Ditch Co., 6 Colo. 443, 450 (1882).
'oMettler v. Ames Realty Co., 61 Mont. 152, 159, 201 Pac. 702, 704 (1921). In a
later case holding that a statute requiring return of excess water to the stream precluded
an out-of-basin appropriator from conveying an interest in excess water, the Montana
court broadly asserted: "Waters primarily belong in the watershed of their origin, if
there is land therein which requires irrigation." Galiger v. McNulty, 80 Mont. 339, 356,
260 Pac. 401, 405 (1927). When read in context, the broad scope of this statement is con-
11 Motl v. Boyd, 116 Tex. 82, 286 S.W. 458 (1926).
12 Texas lawyers will recognize this as an understatement. See generally Carter,
The Position of the Board of Water Engineers on the Scope of Riparian Rights, 1952-
1954 UNIVERSITY OF TEXAS PROCEEDINGS ON WATER LAW 194, 196.
1s See Texas Co. v. Burkett, 117 Tex. 16, 296 S.W. 273 (1927); Watkins Land Co.
TEXAS LAW REVIEW
some states.14 Also, an unlawful use beyond the watershed may become law-
ful by prescription.15 If necessary, project developers desiring to transport
water beyond the watershed may be able to silence the objections of riparians
by purchase"1 or condemnation17 of their rights.
II. STATUTORY RESTRICTIONS IN THREE STATES
The experiences of Nebraska, Colorado, and California in placing statu-
tory restrictions upon transbasin diversions are particularly significant. Each
has approached the problem differently.
A general irrigation act enacted in 1889 by the Nebraska legislature con-
tained the following section: "The water appropriated from a river or stream
shall not be turned or permitted to run into the waters or channel of any other
river or stream than that from which it is taken or appropriated."'8 Within
four years this act had been amended so as to make it almost inapplicable
to the major streams of Nebraska. The amendment added the following:
"Unless such stream exceeds in width one hundred feet, in which event not
more than seventy-five per cent of the regular flow shall be taken."19
As thus amended, this section was one of the few sections of the irriga-
tion law of 1889 not repealed in 1895, when another comprehensive irrigation
law was enacted. The new law contained the following section: "The owner
or owners of any irrigation ditch or canal shall carefully maintain the embank-
ments thereof so as to prevent waste therefrom, and shall return the unused
water from such ditch or canal with as little waste thereof as possible to the
stream from which such water was taken, or to the Missouri River."20 Read
literally, this provision does not forbid transbasin diversion, but only requires
the return of unused water. As a practical matter, of course, this statute could
be given the broader effect if return of unused water were impracticable, as
would usually be true of large-scale diversions to distant regions. It is ex-
v. Clements, 98 Tex. 578, 86 S.W. 733 (1905). But cf. Woody v. Durham, 267 S.W.2d
219 (Tex. Civ. App.-Ft. Worth 1954, writ ref'd). Also, the concept of riparian land has
been totally rejected in a few states. E.g., Gillis v. Chase, 67 N.H. 161, 31 Atl. 18 (1801).
14 E.g., FLA. STAT. 373.141 (1963); IND. ANN. STAT. 27-1406 (1960); Wis. STAT.
15 Martin v. Burr, 111 Tex. 57, 228 S.W. 543 (1921).
16 Texas Co. v. Burkett, 117 Tex. 16, 296 S.W. 273 (1927).
17 United States v. Gerlach Live Stock Co., 339 U.S. 725 (1950); McGhee Irr.
Ditch Co. v. Hudson, 85 Tex. 587, 22 S.W. 398, 967 (1893).
18 Neb. Laws 1889, ch. 68, 6, at 504. A similarly worded statute has been construelC
to be directed toward drainage and flood control rather than beneficial use. OItio 1r.v.
CODE ANN. 3767.13, .17 (Page 1953), Munn v. Horovitz Co., 175 Ohio 521. 1%`
N.E.2d 764, cert. denied, 379 U.S. 820 (1964). See also MINN. STAT. 111.03(8) (1901).
19 Neb. Laws 1893, ch. 40, 3, at 378, NEB. REV. STAT. 46-206 (1960).
20 Neb. Laws 1895, ch. 69, 59, NEB. REV. STAT. 46-265 (1960).
TRANSBASIN DIVERSION OF WATER
tremely doubtful that such broader scope was within the purpose of the
statute. Similar statutes in some states make it clear that transbasin diversions
are not to be barred by their operation by limiting the duty to return water
to the stream to instances where it is "reasonably practicable" to do so by
In 1936, in Osterman v. Central Neb. Public Power & Irr. Dist.,22 the
Supreme Court of Nebraska, relying upon the above statutes, ruled that the
Department of Roads and Irrigation had no authority to grant applications
for transbasin diversions. In the case there before the court, there may have
been reasonable grounds for doubting that the benefits to the receiving region
from the proposed diversion would outweigh the harm to the originating
basin, which evidently would have been deprived of subterranean flow benefit-
ing agricultural lands by natural irrigation. Yet, the court's opinion seemed
to establish an unyielding rule barring transbasin diversions in all cases,
even when the benefits to the receiving region would clearly outweigh the
detriment suffered by the originating basin. It has been reported that, as a
consequence of this decision, other plans for transbasin diversions in Nebraska
were abandoned.23 However, in 1960, in Ainsworth Irr. Dist. v. Bejot,24 the
Supreme Court of Nebraska essentially nullified the holding of the Osternan
case. In this case the court said that the proposed diversion from the Snake
River to the Niobrara River was not a transbasin diversion prohibited by
the statutes since the former river was a tributary of the latter. It has been
pointed out that this same reasoning could have been applied in the Osterman
case, which involved a proposed diversion from the Platte River to the basins
of the Blue and the Republican Rivers, all three of which are within the
watershed of the Missouri River.25
The Nebraska experience demonstrates, if demonstration be needed,
the lack of wisdom, and indeed the futility, of attempting to deal with the
problem of transbasin diversions by a blanket statutory prohibition. As
pointed out, the Nebraska statute flatly prohibiting transbasin diversions
was soon amended to allow diversion of seventy-five percent of the flow of
streams exceeding one hundred feet in width. This was an improvement, but
even the amended version suffers from inflexibility. It would be interesting to
know how the figures "one hundred feet" and "seventy-five percent" were
chosen. Conceivably some future water development project of great impor-
21E.g., TEX. REV. Civ. STAT. ANN. art. 7579 (1954).
22131 Neb. 356, 268 N.W. 334 (1936).
23 Hutchins & Steele. Basic Water Rights Doctrines and Their Implications for River
Basin Development, 22 LAW & CONTEMP. PROB. 276, 296 (1957).
24170 Neb. 257, 102 N.W.2d 416 (1960).
25Yeutter, A Legal-Economic Critique of Nebraska Watercourse Law, 44 NEB. L.
REv. 11, 57 (1965). Yeutter bluntly refers to the court's opinion in the Osterman case as
"perhaps one of the most poorly reasoned opinions handed down by the court." Id. at 54.
TEXAS LAW REVIEW
tance to the economy of Nebraska may be snagged on one of these rigid
.criteria. It is manifestly impossible to establish a general rule, without reference
to a particular situation, that the interests of Nebraska require that no more
than seventy-five percent of the flow of any stream should ever be diverted
outside its watershed.
Perhaps similar to the Nebraska statutes are those laws which restrict
riparian rights to a defined share of the flow, thereby in effect reserving
such water from transbasin diversion. Reference has been made previously
to the distinction in Texas between "normal flow" and "flood and storm
waters."26 Somewhat similar is a Florida statute which authorizes the taking
of water above the "average minimum flow" of a stream beyond riparian
land on the condition that such diversion will not interfere with the "reason-
able uses existing at the time of the beginning of the capture, storage, use or
diversion."27 Also germane are the Indiana statutes which permit those inter-
watershed diversions of "flood" water that do not impair existing rights.2
Plans to transfer water from the western to the eastern side of the
continental divide resulted in the enactment in 1943 of a statute limiting the
powers of water-conservancy districts as follows:
However, any works or facilities planned and designed for the
exportation of water from the natural basin of the Colorado river
r, and its tributaries in Colorado, by any district created under this
article, shall be... designed, constructed and operated in such manner
Co" that the present appropriations of water, and in addition thereto
,c prospective uses of water for irrigation and other beneficial con-
sumptive use purposes ... within the natural basin of the Colorado
river in the state of Colorado, from which water is exported, will not
be impaired nor increased in cost at the expense of the water users
within the natural basin. The facilities and other means for the ac-
complishment of said purpose shall be incorporated in, and made a
part of any project plans for the exportation of water from said
natural basin in Colorado.29
This appears to be a legislative declaration of policy that transbasin
diversion of water shall be allowed only as to the excess above the present
and future needs of the originating basins for consumptive uses. No tin:'
limit is specified in determining "prospective uses." The practical effect oi
26 Note 10 supra and accompanying text.
27 FLA. STAT. 373.141 (1963).
28 IND. ANN. STAT. 27-1406 (Supp. 1964). Wis. STAT. 30.18 (1961), authlorizc
temporary diversions of water not in present use to drought-stricken watersheds as .
emergency measure. See Nekoosa-Edwards Paper Co. v. Public Serv. Comm'n, 8 \W'
2d 582, 99 N.W.2d 821 (1959).
29 CoLo. REV. STAT. ANN. 150-5-13(2) (d) (1963).
1965] TRANSBASIN DIVERSION O1 4TER 1041
the statute is said to be that "a project proposing to divert water from the
Colorado River Basin must construct a compensating reservoir that will
leave the West Slope in as good condition for present and future development
purposes as if the transporting project had not been constructed and the river
involved had remained unregulated."30 Thus the decision as to the needs
of the originating basin is to be made at the time when the transbasin project
is effectuated. If the future needs of the originating basin are underestimated,
there is no indication that such basin would have a right to recapture waters
being diverted outside the basin. On the other hand, if the future intrabasin
needs are overestimated, the effect of the statute seems to be that facilities may
be constructed which are not now needed, and may never be needed, and
that water may be reserved from present beneficial use to satisfy speculative
There are limitations upon and doubts about the policy announced in
the above statute. Applicable by its terms only to water-conservancy districts,
the statute would not affect transbasin diversions accomplished without reli-
ance upon such districts. The constitutionality of the statute has been ques-
tioned,31 evidently on the ground that the right to appropriate water for benefi-
cial uses is embedded in the constitution of Colorado in terms which make no
reference to any watershed limitation.32 The Supreme Court of Colorado
has not yet passed upon the statute, but in a case decided since its enactment
the court, in sweeping language, rejected the contention that Denver (which
was not subject to the statute) should not be allowed to divert water needed
for the future development of the originating basin across the continental
We find nothing in the Constitution which even intimates that
waters should be retained for use in the watershed where originating.
The waters here involved are the property of the public, not any
segment thereof, nor are they dedicated to any geographical portion
of the state.
The right to appropriate water and put the same to beneficial
use at any place in the state is no longer open to question.33
This strong language may foredoom the statute.
8OBiese, Compensatory Storage, 22 RocKY MfT. L. REV. 453 (1950). In the Frying-
pan-Arkansas transbasin diversion in Colorado the mechanics of compliance with the
watershed-of-origin statute included the maintenance of certain minimum stream flows in
the basin and amounts of storage water in the reservoirs plus consideration of construc-
tion of an additional reservoir for inbasin use. H.R. Doc. No. 130, 87th Cong., 1st Sess.
31 Biese, supra note 30, at 461. A Texas act which forbade any diversion from the
Guadalupe watershed was declared unconstitutional, but the case was decided on grounds
other than interbasin transfer. Board of Water Eng'rs v. City of San Antonio, 155 Tex.
111, 283 S.W.2d 722 (1955).
32 See COLO. CONST. art. XVI, 5-6.
33 Metropolitan Suburban Water Users Ass'n v. Colorado River Water Conservation
Dist., 148 Colo. 173, 202, 365 P.2d 273, 288-89 (1961).
TEXAS LAW REVIEW
A judgment as to the vitality of the Colorado watershed-protection policy
should also take into account the political power of United States Congress-
men representing districts on the western slope of the continental divide.
The very existence of Colorado's watershed statute has been attributed to
the unwillingness of these Congressmen to support federal projects in Colorado
until assurances of adequate future water supply for their districts were
written into the laws of Colorado.34 This same power bloc has had a marked
impact upon the shaping of policy for federal projects in Colorado. A note-
worthy example is the enabling statute of the Fryingpan-Arkansas diversion,
which provides that the construction and operation of this federal project
must conform to the Colorado watershed-of-origin statute.35 Further, the
Secretary of the Interior is precluded from using the power of eminent domain
to acquire Fryingpan basin water rights for use outside the basin.36
In California, as in Texas, the basic water problem is maldistribution.
This is not a new problem for California, but the dimensions of the problem
have grown alarmingly during the past two decades.37 Awareness of the need
for long-distance transportation of water and of the consequent threat to the
future development of the originating basins was manifested as early as 1931,
when the so-called "county-of-origin" statute was enacted. This statute
qualified the power of a designated state agency to make applications to
appropriate water and assign such rights in furtherance of a state plan: "No
priority under this part shall be released nor assignment made of any applica-
tion that will, in the judgment of the commission, deprive the county in which
the water covered by the application originates of any water necessary for
the development of the county."38
Two years later this same general policy was reinforced by enactment
of the "watershed-protection" statute, which forbade the state agency respon-
sible for construction and operation of the Central Valley Project to deprive
a watershed or area wherein water originates, or an area immediately
adjacent thereto which can conveniently be supplied with water there-
from,. directly or indirectly of the prior right to all the water rea-
sonably required to adequately supply the beneficial needs of the
84 Biese, supra note 30, at 455. This has relevance to the potential hostility of Texas
Congressmen from the humid, water-surplus regions of Texas toward any federal project
moving water to the arid areas of Texas without express conditions in the enabling
statutes for the protection of the basins of origin.
35 76 Stat. 391 (1962), 43 U.S.C. 616b(a) (1964) (incorporating H.R. Doc. No.
130, 87th Cong., 1st Sess. (1961)).
6 76 Stat. 391 (1962), 43 U.S.C. 616b(d) (1964).
37 Warne, supra note 1, at 249.
88 CAL. WATER CODE 10505.
TRANSBASIN DIVERSION OF WATER
watershed, area, or any of the inhabitants or property owners there-
More recently, in 1959, the California legislature declared that it is
the "established policy of this State" that state plans for water projects give
"consideration" to the "needs of the area in which the water originates"
and that the legislature, when authorizing a transbasin project, "consider"
the construction of other works to satisfy the "reasonable ultimate require-
ments" of the originating watershed.40
Of these three enactments, the most stringent appears to be the "water-
shed-protection" statute, which has been construed by the attorney general
of California as entitling inhabitants of protected areas to future appropria-
tions of water even if it is necessary to recapture water already appropriated
for use outside the watershed.41 This would seem to pose such a threat to the
firmness of water supplies for receiving regions as to deter the substan-
tial investments required for major transbasin diversions. Indeed, this statute
and the whole problem of reconciling the interests of originating and receiving
regions became the subject of intense controversy when the Feather River
Project, involving the movement of vast quantities of water from the north-
ern part of California to the southern part, was proposed.42 Not only were
southern interests concerned about the availability of a firm water supply,
but northern interests feared that the existing statutory protections of
originating areas would be inadequate.
Both the "county-of-origin" and the "watershed-protection" statutes have
been attacked as contravening the California constitutional command that
the waters of the state be put "to beneficial use to the fullest extent of which
they are capable."43 Also, should inhabitants of originating areas ever exer-
cise their right to appropriate water by recapturing water from out-of-basin
users, this right could be nullified by assertion of the state's power of eminent
domain.44 For a time it was generally thought that these fears could best be
calmed by adoption of a constitutional amendment which would "guarantee
that the areas of surplus will have reserved to them the water necessary for
their development, while guaranteeing firm supplies for export to the water-
deficient areas."45 Attempts to accomplish this seemingly impossible task were
39 CAL. WATER CODE 11460.
40 CAL. WATER CODE 108.
41 Note, 12 STAN. L. REV. 439, 453 (1960).
42 Enersen, Surplus Water for Areas of Need, PROCEEDINGS OF THE CALIFORNIA
WATER CONFERENCE 7 (1956); Towner, The Role of the State, 45 CALIF. L. REV. 725
(1957) ; Warne, supra note 1.
43 Towner, supra note 42, at 734.
44 Note, 12 STAN. L. REV. 439, 454 (1960).
45 Towner, supra note 42, at 734.
TEXAS LAW REVIEW
Despite the persistence of doubts in both the north and the south, in
1960 the voters of the state approved the Water Resources Development
Bond Act,46 the major objective of which is the financing of the Feather River
Project. It appears that Californians were generally convinced that the future
needs of the northern half of the state would be satisfied from alternate
sources and that it would never be necessary to attempt recapture of water
from southern California. The inclusion in the bond act of a provision stating
that some of the funds produced by the act would be allocated to construction
of local projects in originating areas may have encouraged such a belief.
The validity of the Feather River Project was recently subjected to
a shotgun assault on six state constitutional grounds and sixteen other grounds,
but no issue relating to watershed preference was raised.47 The California
Supreme Court upheld the validity of the project in a point-by-point re-
sponse to the attack. Evidently the watershed issue is to be deferred until
there is an actual attempt to recapture.
III. THE TEXAS SITUATION
A. The "Watershed-Prejudice" Statute
Included within the lengthy and comprehensive irrigation act of 1913
were three sections purporting to limit transbasin diversions.48 This legislation,
which remains on the books as articles 7589-9149 and will be referred to herein
as the "watershed-prejudice" act, is uncertain of meaning, has gone almost
unnoticed by the appellate courts of Texas, and has had no substantial impact
upon the shaping of Texas water-development projects, many of which have
moved water across watershed divides. There are indications of growing
interest in this act, however, and the determination of its meaning may soon
become a matter of great importance.
The text of articles 7589 and 7590 of the "watershed-prejudice" act is
It shall be unlawful for any person, association of persons,
corporation, water improvement or irrigation district to take or divert
any of the water of the ordinary flow, underflow, or storm flow of any
stream, water course, or watershed, in this State into any other
natural stream, water course or watershed, to the prejudice of any
person or property situated within the watershed from which such
water is proposed to be taken or diverted.
Before any person, association of persons, corporation, water
improvement or irrigation district shall take any water from any
46 CAL. WATER CODE 12930-44.
47 Metropolitan Water Dist. v. Marquardt, 59 Cal. 2d 159, 379 P.2d 28 (1963).
48 Tex. Laws 1913, ch. 171, 81-83, at 376-77.
49 TEX. REV. Civ. STAT. ANN. arts. 7589-91 (1954).
TRANSBASIN DIVERSION OF WATER
natural stream, water course, or watershed in this State into any
other watershed, such person, association of persons, corporation,
water improvement or irrigation district shall make application to
the Board of Water Engineers for a permit so to take or divert such
waters, and no such permit shall be issued by the Board until after
full hearing before said Board as to the rights to be affected thereby,
and such hearing shall be held and notice thereof given at such time
and such place, in such mode and manner as the Board may pre-
scribe; and from any decision of the Board an appeal may be taken to
the district court of the county in which such diversion is proposed
to be made, in the mode and manner prescribed in this chapter for
other appeals from the decision of the Board.
Article 7591 prescribes penalties for violations of articles 7589 and 7590.
What is the nature of the interests protected by this statute? The key
phrase, "prejudice of any person or property," is sufficiently broad to encom-
pass more than water rights. It may have been the legislative purpose to
protect not only holders of water rights, but also others located within the
originating basin who benefit from the flow of the stream through the basin,
such as businessmen serving farmers engaged in irrigation. Conceivably the
1913 legislature was looking far into the future to the time when a huge project
might shunt the entire flow of a stream from a large valley containing a
developed economy based upon the stream, and the legislature realized that,
while holders of water rights would be compensated by purchase or con-
demnation, the consequential losses of business establishments would go un-
compensated. Moreover, the legislature's concern may not have been limited
to protection of benefits enjoyed from the stream at the time of the proposed
transbasin diversion; the safeguarding of future water requirements of orig-
inating basins may also have been a subject of legislative solicitude. However,
it is not unreasonable to argue that the phrase "prejudice of any person or
property" was merely a vague reference to existing water rights or water
uses. A similar early Colorado statute prohibiting diversion of the water of
any stream "from its original channel to the detriment of any miner, mill-
men or others along the line of said stream" was so construed.50
Assuming that the Texas "watershed-prejudice" statute protects pres-
ent and future benefits of stream flow against transbasin diversion, what
is the measure of protection afforded thereby? Literally, diversion is for-
bidden if it would cause any "prejudice." This, however, could have the absurd
and intolerable consequence that a very slight harm to present or future
interests of the originating basin would block a project promising immense
benefits to the receiving region and to the state as a whole. Considering the
nature of the problem, and also that the issue of "prejudice" was to be resolved,
0o Coffin v. The Left Hand Ditch Co., 6 Colo. 443 (1882).
TEXAS LAW REVIEW
after a hearing, by an administrative agency, the Board of Water Engineers,
it seems more likely that the legislature (if it had any intention to protect
interests other than vested water rights) contemplated that there would be
a balancing of the benefits and detriments expected to result from a proposed
transbasin diversion, and that there would be "prejudice" only if the benefits
from the diversion were outweighed by detriments to the originating basin,
the burden of persuasion perhaps being upon the proponent of interbasin
If that is the meaning of these provisions, they appear to have little or
no effect on the broad power conferred upon the Board of Water Engineers
by section 19 of the 1913 act (now contained in articles 7506-07) to pass
upon applications for permits to appropriate water, including the discretion
to reject any application "detrimental to the public welfare."51 Section 19,
apparently covering the subject completely, specifically restrained the discre-
tion of the Board only in instances in which "there is no unappropriated
water in the proposed source of supply; or if the proposed use conflicts with
existing water rights, or raparian rights." The "watershed-prejudice" pro-
visions, far removed from section 19 (in sections 81-83), contain no specific
reference to the Board's power to create appropriative rights. Couched in
broader terms, section 82 requires a Board permit for transbasin diversion by
"any person" of "any water"; seemingly this provision would embrace
riparians, appropriators, and perhaps others who had acquired water rights
prior to the proposed transbasin diversion. It may be, as contended recently
by the attorney general of Texas,52 that this section was intended to apply
solely to those having vested water rights who desired to move water beyond
the watershed, and was not intended to limit the discretion of the Board
of Water Engineers in creating new appropriative rights. It is true that the
central problem facing the draftsmen of the 1913 irrigation act was the task
of coordinating existing riparian and appropriative rights with a new scheme
of administrative control over allocation of stream water, and that sections
81-83 would bring existing water rights under state control to some extent.
But even if sections 81-83 are to be read as applicable to both old and new
water rights, which is the apparent meaning of these sections, the Board's
discretion in passing upon applications to appropriate stream water would
not be materially impaired, assuming that these sections call for a balancing
of interests rather than an absolute bar to transbasin diversion.
Two recent opinions by the court of civil appeals at Austin cast some
51 TEX. REV. Civ. STAT. ANN. arts. 7506-07 (1954).
52 Brief for the Texas Water Commission in reply to an application for writ of
error, pp. 47-48, Halsell v. Texas Water Comm'n, 380 S.W.2d 1 (Tex. Civ. App.-
Austin 1964, writ ref'd n.r.e.).
TRANSBASIN DIVERSION OF WATER
light upon the nature of the interests protected by the "watershed-prejudice"
act, but do not clear up the significant questions. Halsell v. Texas Water
Comm'n53 was a suit by landowners to invalidate a permit allowing construc-
tion of a reservoir which would inundate their lands. The landowners at-
tempted, without success, to bring themselves under the protective mantle
of the "watershed-prejudice" act. The court had no difficulty in rejecting
the claim that loss of land by condemnation for a reservoir site to impound
water for transbasin diversion constitutes "prejudice" within the meaning
of the act. The effect upon the landowners would have been no different if
the water impounded in the reservoir had been destined for intrabasin use.
In the other case, City of San Antonio v. Texas Water Comm'n,54 the
court held that the Commission's denial of San Antonio's application to
appropriate water impounded by the Canyon Dam on the Guadalupe River
for municipal uses outside the Guadalupe basin was supported by substantial
evidence. The opinion of the court of civil appeals at least implicitly approves
the trial court finding that the diversion sought by San Antonio would have
been "of prejudice to persons and property situated within the Guadalupe
River watershed."55 Among the trial court's findings referred to by the court
was a finding that existing water rights would be impaired if San Antonio's
application were granted. If supported in fact, this alone clearly would have
been a proper ground for denial of San Antonio's application. The court of
civil appeals went on, however, to state that "it is the general policy of the
Texas Water Commission to require reasonable development of local surface
water resources before authorizing the diversion of water from another
stream or watershed" and that the trial court had found that San Antonio
had made no effort to develop a supplemental surface water supply from the
San Antonio River.56 The policy which the court attributed to the Commis-
sion is of doubtful wisdom and is certainly not required by the terms of the
"watershed-prejudice" act. It is too rigid to require a user to reach great
distances upstream or downstream within a basin rather than tap a nearby
source in an adjacent watershed, especially since Texas watersheds extend
hundreds of miles. Of course, whenever the Commission is passing upon
an application for a permit to appropriate water, irrespective of whether it is
for interbasin or intrabasin uses, the availability of alternative sources of
supply is a relevant consideration. An applicant seeking water from a source
likely to be depended upon by others might be able to satisfy his needs at
reasonable cost from an alternative source (located in the same or in another
5s 380 S.W.2d 1 (Tex. Civ. App.-Austin 1964, writ ref'd n.r.e.).
54 392 S.W.2d 200 (Tex. Civ. App.-Austin 1965, writ filed).
s5 Id. at 210.
56 Id. at 212.
TEXAS LAW REVIEW
watershed) which for some reason would not be available to others. If so,
the applicant should be required to develop the alternative source. Whether
'the two sources lie within the same watershed would be an irrelevant con-
sideration except as this would bear upon the availability of both sources to
prospective users, and this would vary with different fact situations.
Once the Commission has acted upon an application for a permit to
divert water beyond a watershed, inhabitants of the originating basin will
be barred unless they duly appeal to the district court. Unlike the California
"watershed-protection" statute, the Texas statute does not appear to be sus-
ceptible of the construction that the future needs of an originating basin can
be met by recapturing water diverted elsewhere.57 An appeal from an order
of the Commission is taken under the "substantial evidence" rule of Texas.65
The issue in any such appeal is the reasonableness of the order measured by
the standard of whether there is substantial evidence, rather than whether
there is a preponderance of evidence, to support it. Thus the complainant's
burden is more onerous than it would be under a preponderance-of-evidence
standard. Also, it must realistically be presumed that the courts will respect
the technical competency of the Commission. In Halsell, the court said that
the decision of the Commission on this technical problem should have "extra-
ordinary weight" with the courts.59 It is also relevant in this connection to
observe that one procedural advantage given originating areas by article
7590, namely that appeals "may be taken to the district court of the county
in which such diversion is proposed to be made," was apparently nullified by
the subsequent enactment of article 7477, section 12, which fixes venue "exclu-
sively in the District Court of Travis County" for appeals by any person
affected by "any ruling, decision, or other act" of the Commission.o6
Another unresolved question concerning the "watershed-prejudice" sta-
tute is the meaning of "watershed," which is undefined in the statute. The
dictionary definition of a watershed as the "whole region or area contributing
5TTEx. REV. Civ. STAT. ANN. art. 7589 (1954), is concerned with the time when
"such water is proposed to be taken or diverted." (Emphasis added.) The time for
determination of "prejudice" would be, therefore, prior to the taking. This is consonant
with the companion statute, article 7590, which requires a hearing, prior to the diversion,
on the rights "to be affected thereby." An appeal from the decision of the Commission
may be taken, according to article 7590, "in the mode and manner prescribed in this
chapter for other appeals from the decision of the [Commission]." The applicable appel-
late statute, Tex. Laws 1965, ch. 296, 1(12), at 585, fixes the time for notice
of appeal to within thirty days of an order or action by the Commission. This time limit,
similar to the time limit in an appeal from a trial court, is jurisdictional and failure to
meet the requirements would preclude an appeal. Thus articles 7589-90 and 7477(12)
seemingly harmonize to fix only one opportunity to press the claim of "prejudice."
58 Southern Canal Co. v. State Bd. of Water Eng'rs, 159 Tex. 227, 318 S.W.2d 619
59 380 S.W.2d at 13.
o American Canal Co. v. Dow Chem. Co., 380 S.W.2d 662 (Tex. Civ. App.-
Houston 1964, writ dism'd w.o.j.), held that article 7477, 12, was a mandatory venue
TRANSBASIN DIVERSION OF WATER
to the supply of a river or lake"61 is deceptively simple. A recent report by
the Texas Research League refers to "the State's more than 7,500 named
streams and tributaries."62 A joint report by state and federal water agencies
depicts eleven basins on a chart of "Major Texas River Basins."63 In its
Plan for Meeting the 1980 Water Requirements of Texas, the Board of Water
Engineers lists fifteen Texas river basins.64 Some notion of the difficulties
involved in ascertaining the physical limits of a watershed is indicated by
this report, which explains that some flat areas in the middle and upper
reaches of certain rivers have been included within the basins of such rivers
even though such flat areas are "topographically defined only faintly,"
and that eight large flat areas on the coastal plain lying between streams
cannot properly be placed in the basin of either and accordingly are designated
as "coastal areas."65
Whatever difficulties may be involved in determining the physical extent
of a watershed, there are other factors involved in defining the term for the
purposes of applying a legal doctrine or a statute, or for planning and de-
veloping the water resources of a region. The cases involving the riparian
watershed limitation show that the meaning of the term for that purpose de-
pends upon the nature of the controversy. A transfer of water from one tribu-
tary to another tributary of the same major stream is beyond the watershed
if complained of by a riparian located on the originating tributary; but
such a transfer is deemed to be within the watershed (of the main stream)
and thus lawful if the only complaining riparians are located downstream
from the point of confluence of the two tributaries.6 The same approach was
taken by the Supreme Court of Nebraska in applying its watershed-protec-
tion act, which it held inapplicable to a transfer from a tributary basin having
relatively insignificant interests to protect.67
The chief engineer of the Texas Water Commission testified in the
Halsell case that "our concept of watershed is the entire river basin."68 This
statement was made by way of explanation of the Commission's position
that the proposed transfer in that case from the Little Wichita River into the
61 WEBSTER, NEW INTERNATIONAL DICTIONARY (2d ed. 1960).
62 TEX. RESEARCH LEAGUE, WATER RIGHTS AND WATER RESOURCES ADMINISTRATION
IN TEXAS 27 (1965).
68 S. Doc. No. 111, 85th Cong., 2d Sess. 5 (1958).
64 TEX. BD. OF WATER ENGINEERS, A PLAN FOR MEETING THE 1980 WATER RE-
QUIREMENTS OF TEXAS 29 (1961).
66Rancho Santa Margarita v. Vail, 11 Cal. 2d 501, 81 P.2d 533 (1938); accord,
Saunders v. Robison, 14 Idaho 770, 95 Pac. 1057 (1908). The Saunders case, dealing
with appropriation rights, held that an appropriator below the confluence of two streams
could not complain when the location of a use was changed from one watershed to the
other, since in either case the return flow would be available to him.
67 Ainsworth Irr. Dist. v. Bejot, 170 Neb. 257, 102 N.W.2d 416 (1960).
s8 380 S.W.2d at 6.
1050 TEXAS LAW REVIEW [Vol. 43:1035
watershed of the Wichita River was not a "diversion from one watershed to
another" within the meaning of the Commission's rules and the statute, since
both of those rivers are tributaries of the Red River. Yet, the Commission
and apparently the court of civil appeals deemed the "watershed-prejudice"
statute applicable to San Antonio's attempt to divert water from the Guadalupe
River to the San Antonio River, despite the fact that they join prior to
emptying into the Gulf.69 One might conclude that Texas watersheds are
placed administratively into two classes, major and minor, but that the
criteria for classification have not been announced. The most obvious test is
physical size, but conceivably a small watershed might contain significant
interests which would be impaired by movement of water away from that
watershed. Factors such as the quantity and quality of irrigable land, deposits
of natural resources, industrial development, and projected population growth
have much greater relevance to application of the "watershed-prejudice"
statute than does the physical extent of the drainage area. Any meaningful
designation of watersheds in advance of the emergence of particular trans-
basin proposals will necessarily involve the same types of studies and investiga-
tions called for in comprehensive statewide planning of water resources
development. That such planning and watershed designation should go hand-
in-hand appears to have been recognized in a recent statute set forth below.
B. The Fifty-Year Limitation on Transbasin Planning and Financing
By legislation effective August 30, 1965, the two major water agencies in
Texas were reorganized so as to place full responsibility for the planning and
financing of water projects in the Texas Water Development Board and to
limit the Texas Water Commission, which was renamed the Texas Water
Rights Commission, to functions pertaining to the creation and supervision of
water rights.70 One provision of this legislation has a significant bearing upon
The Board is specifically charged with the following duty: the
preparation, development, and formulation of a comprehensive State
Water Plan for this state, including a definition and designation of
river basins and watersheds as separate units for purposes of water
development and inter-watershed transfers. However, the Board shall
not prepare or formulate any plan which contemplates or results in
the removal from the basin of origin of any surface water to some
other river basin or area outside of such, basin of origin if the water
supply involved in such plan or project will be required to supply the
reasonably foreseeable future water requirements for the next ensuing
fifty-year period within the river basin of origin, except on a tem-
69 City of San Antonio v. Texas Water Comm'n, 392 S.W.2d 200 (Tex. Civ. App.-
Austin 1965, writ filed).
7o Tex. Laws 1965, ch. 296-97, at 583-604.
TRANSBASIN DIVERSION OF WATER
porary, -interim basis. The Board shall be governed in its preparation
of said plan by a regard for the public interest of the entire state, and
shall direct its efforts to plan for the orderly development and
management of water resources in order that sufficient water will be
available at reasonable cost to further the economic development of
the entire state.71
Also passed at the same legislative session was Senate Joint Resolution 19,
which proposes a constitutional amendment authorizing issuance of additional
bonds by the Texas Water Development Board, and contains a proviso making
the above fifty-year limitation applicable to state financing of projects.72 The
presence of this limitation, in both pieces of legislation, is attributable to the
apprehension of inhabitants of the eastern part of Texas; this apprehension has
been generated by widespread discussion of the Texas Basins Project.73
The probable impact of these provisions upon the course of development
of the water resources of the state is uncertain, but could be severe. Termed
derisively by some as the "fifty-year lockup," these provisions evidently are
intended to assure originating areas sufficient water to meet their anticipated
needs for a period of fifty years following the planning of a transbasin project
by the Water Development Board or following the decision to finance such a
project with state funds. Even without these provisions, good planning would
take into consideration such needs of originating areas. But these provisions
appear to go further and create a preference for intrabasin needs, regardless of
the nature and importance of such needs compared with the needs of other
regions. The preference in Texas law for domestic and municipal uses, and
other priorities and policies as well,74 possibly are now subject to being over-
71 Tex. Laws 1965, ch. 297, 3(b), at 588.
72 The text of the proviso:
[P]rovided, however, the Texas Water Development Fund or any other state
fund provided for water development, transmission, transfer or filtration shall
not be used to finance any project which contemplates or results in the removal
from the basin of origin of any surface water necessary to supply the reasonably
foreseeable future water requirements for the next ensuing fifty-year period
within the river basin of origin, except on a temporary, interim basis.
Note that large urban-industrial areas or aggregates of smaller cities, such as the
eleven city Canadian River Municipal Water District, can avoid this problem by financing
their own projects rather than depending upon state sponsorship.
73 Tex. Water Report, July 23, 1964, p. 1; Dallas Morning News, June 15, 1965,
A, p. 5, col. 5.
74 TEX. REV. CIV. STAT. ANN. art. 7471 (1954), sets out the priority of preferred
uses for appropriation permits:
1. Domestic and Municipal uses, including water for sustaining human
life and the life of domestic animals.
2. Water to be used in processes designed to convert materials of a lower
order of value into forms having greater usability and commercial value, and
to include water necessary for the development of electric power by means other
4. Mining and recovery of minerals.
5. Hydro-electric power.
TEXAS LAW REVIEW
ridden by the policy of preference for the basin of origin. It is even conceivable
that a metropolis desperately needing water and having no feasible alternative
water source might be precluded by these provisions from obtaining water
which it is "reasonably foreseeable" that the originating basin will need during
the ensuing fifty-year period for the purpose of preserving, for the benefit of
sportsmen, marshes inhabited by game birds.75
It may be possible, however, to harmonize the fifty-year limitations with
established policies of Texas water law. Texas courts have often declared that
implied repeals are not favored.76 It would not be unreasonable to construe the
fifty-year provisions as creating a preference for the basin of origin only when
the anticipated intrabasin uses have a priority at least as high as the proposed
out-of-basin uses. By similar reasoning, the policy of preference for basins of
origin might be subordinated to other relevant policies. It seems unlikely that
the legislature intended to make major changes in water law or to balkanize
water development in Texas, especially in view of its insistence that a "com-
prehensive State Water Plan" furthering the "economic development of the
entire state" be prepared by the Board, which shall be "governed" by a regard
for the "public interest of the entire state."
The authority to make the critical decisions called for by the fifty-year
provisions is vested in the Water Development Board. Due to the nature of
these decisions, the Board necessarily has a great amount of discretion.
Judgments might reasonably differ as to the water needs of a region fifty years
from today. It is perhaps just as difficult to predict with confidence how much
water from various sources will be available to the region fifty years later. It
follows that the severity of the impact of the fifty-year limitations will depend
largely upon the manner in which the Water Development Board does its
job. The Board is required to hold a public hearing on plans for transbasin
7. Recreation and pleasure.
No Texas court has construed this statute; however, a federal court held that it was
prospective in application and not intended to upset normal time priority or to disturb
outstanding permits. El Paso County Water Improvement Dist. No. 1 v. City of El Past'.
133 F. Supp. 894, 908 (W.D. Tex. 1955), reformed on other grounds, 243 F.2d 927
(5th Cir. 1957).
76 A less extreme but analogous situation exists today in that East Texans are con-
cerned with the effect of the proposed massive transfers involved in the Texas Basins
Project upon the availability of water for barge canals to Dallas and Longview. Dallas
Morning News, June 15, 1965, A, p. 5, col. 5.
But see TEx. REV. Civ. STAT. ANN. art. 7472 (1954), which apparently allows
municipalities to take post-1931 appropriations of a lesser priority for domestic a;!
municipal uses without compensation. No watershed preference is incorporated, altholi
the statute speaks of "further appropriation," implying that the municipality slou,!
already have a permit from the source. Since the statute was enacted in 1931, a tiile '"
few, if any, transbasin diversions, the legislators might not have given any considcrati':
to watershed policy. However, article 7472 does not favor other high priority needs, a
defined by article 7471, with such a power.
76 See, e.g., Winterman v. McDonald, 129 Tex. 275, 102 S.W.2d 167 (1937).
I_~_ _____Z_ LL_1II.._- .-.-1) _11-_-111
TRANSBASIN DIVERSION OF WATER
diversions "at some location convenient to the areas affected," but the Board's
planning decisions, incorporated into the state water plan, do not appear to
he subject to attack. The statute specifically provides that the state water plan
is to be a "flexible guide" to state policy, and that the Texas Water Rights
Commission shall take the plan into consideration, but "need not be bound
thereby." Also, the fifty-year limitation on transbasin planning is not applicable
to decisions of the Water Rights Commission, which apparently remains
subject to the "watershed-prejudice" statute."
Unlike the limitation on planning, the fifty-year limitation on financing of
transbasin diversions (assuming that the voters incorporate it into the Texas
constitution) will be theoretically enforceable by inhabitants of basins of origin.
Many cases in Texas have held that a taxpayer has standing to seek an injunc-
tion to prevent illegal expenditure of state funds by a state official.78 But stand-
ing is only the first step in obtaining an injunction, and blocking the path is the
almost insurmountable obstacle of the burden of establishing that the Board
abused its discretion-a discretion which by its nature is necessarily very
Although the wasteful consequences of the fifty-year limitations appear to
be minimized by the exception for "temporary, interim" use, the actual
significance of this exception will depend largely upon the extent to which
water can be diverted for temporary use without construction of costly
facilities. It will also probably be necessary to grant the Water Rights Com-
mission the power to issue permits to appropriate water for terms ranging up
to fifty years. Except for permits issued to lessees of facilities or purchasers
of water from the Water Development Board79 and permits issued for seasonal
uses and extremely short periods not exceeding three months, the Commission
is not expressly authorized to issue permits of limited duration.80
IV. FEDERAL POLICY
In view of the dominant role of federal agencies in large-scale water
development projects, the supremacy of federal law, and the doctrine of
sovereign immunity, the nature of the federal policy on the protection of
watersheds of origin is a matter of paramount importance. It cannot be said,
however, that any general federal policy on this subject has yet emerged.
77 There is at least a toehold, however, for an argument that the "watershed-
prejudice" statute has been impliedly repealed. Earlier legislation on the subject of state
financing of water projects expressly saved the "watershed-prejudice" statute from repeal,
see Tex. Laws 1963, ch. 49, 3, at 79, but the recent enactments containing the fifty-
year limitations are silent on the point.
78 See Osborne v. Keith, 142 Tex. 262, 177 S.W.2d 198 (1944), for an exposition
of this rule and citation of authorities.
79 Tex. Laws 1965, ch. 297, 5, at 591-95.
80 TEX. REv. Civ. STAT. ANN. art. 7467c (1954).
TEXAS LAW REVIEW
Congress appears to have made no general statement of policy concerning
transbasin diversions. This silence might indicate that the will of Congress is
that transbasin diversions be unrestrained. However, in some instances restric-
tive provisions have been incorporated into particular projects, probably
because of the political power of the affected areas. A recent example is the
statute authorizing the Fryingpan-Arkansas Project in Colorado, which com-
mits federal construction and operation of the project to conformity with the
Colorado watershed-of-origin statute, and even takes the extreme step of
precluding the Secretary of the Interior from using the power of eminent
domain to acquire Fryingpan basin water rights for use outside the basin.8'
At the agency level, also, there have been manifestations of deference by federal
agencies to state policy on protecting the water supply of basins of origin. A
joint report in 1958 by the Texas Board of Water Engineers, the Bureau of
Reclamation, the Corps of Engineers, and the Soil Conservation Service
advocated increasing resort to transbasin diversions in Texas, but quoted the
Texas "watershed-prejudice" statute, and declared that "convincing assurance"
should be given water-surplus basins that such transfers will not deprive them
of supplies "needed to satisfy their in-basin water requirements," the measure-
ment of which "can only be accomplished at the State level."82
The closest approach to a national policy on this subject is a provision
attached by a conference committee to the recently enacted Water Resources
Planning Act.83 This act seeks to coordinate water-resources planning by all
governmental and private agencies through establishment of river basin com-
missions,84 which are to report to the Water Resources Council, composed of
the heads of major federal water agencies. The provision of special interest
here is a disclaimer that nothing in the act should be construed as "authorizing
any entity established under the provisions hereof" to "study, plan, or recom-
mend the transfer of waters between areas under the jurisdiction of more than
8176 Stat. 391 (1962), 43 U.S.C. 616b(d) (1964). Thus the statement of the
Supreme Court in City of Fresno v. California, 372 U.S. 627, 629-30 (1963), that what-
ever rights the California watershed and county-of-origin statutes conferred, the United
States was not precluded from taking them through the power of eminent domain, is
not applicable to this project.
82 S. Doc. No. 111, 85th Cong., 2d Sess. 157-58 (1958). The Bureau of Reclamation,
as builder of the Canadian River Project, which was designed to supply water to elcenc
Texas Panhandle cities located in several other basins, refused to commence construction
until the recipients could show valid state water rights. Contract between the United
States and the Canadian River Municipal Authority, Nov. 28, 1960, p. 3. The otler
great federal dam-building entity, the Army Corps of Engineers, builder of the Canyo:'
Dam on the Guadalupe River, has awaited state adjudication of the San Antonio-Gul!ad'-
lupe River Authority controversy over the Canyon Dam water, which is being foui'.l
out on a watershed basis. These are indicative of the practice of nonintervention ly
these federal agencies, whatever power they actually have.
83 PUB. L. No. 80, 89th Cong., 1st Sess. (July 22, 1965).
84 Each commission is to embrace "an area, river basin, or group of related river
basins." PUB L. No. 80, 89th Cong., 1st Sess. 201(a) (July 22, 1965).
TRANSBASIN DIVERSION OF WATER
one river basin commission .... 5." This language is applicable to the Council
as well as to the commissions despite a command elsewhere in the act that the
Council "maintain a continuing study of the relation of regional or river basin
plans and programs to the requirements of larger regions of the Nation ..""
According to the conference report, it was not intended to establish federal
policy on transbasin diversions by this act; the subject is simply "beyond the
scope of this legislation," and other federal agencies are still free to propose
transbasin diversions.87 This is literally true, but the practical impact of this
disclaimer upon planning by other agencies will surely be very great, since it
is contemplated that water plans of other agencies (federal and otherwise) will
be channeled through the commissions and the Council.
It appeared for a time that there might be a clash of federal and state
policy in connection with diversion by the Bureau of Reclamation of the flow
of the San Joaquin River at Friant Dam, a feature of the Central Valley
Project in California. Claimants of water rights below Friant Dam sought to
have the usual flow maintained by filing an injunction suit in 1947 against
Bureau of Reclamation officials, the United States, and certain water districts
receiving diverted water. The city of Fresno intervened as a plaintiff, one of its
claims being that it was entitled to preference by virtue of the California
"county-of-origin" and "watershed-protection" statutes. The state of Cali-
fornia did not intervene in support of Fresno's claim. This protracted litigation,
involving many issues, finally ended, adversely to the plaintiffs, in the United
States Supreme Court in 1963.88 It will be necessary here to refer only to the
watershed-protection aspect of the case.
The district court concluded in 1956 that the California "watershed-
protection" statute by its terms was applicable to projects of agencies of the
United States, and that Congress had subjected Reclamation Act projects to
such state laws.89 The court was referring no doubt to the much-discussed
section 8 of the Reclamation Act of 1902, which contains no specific reference
to protection of watersheds of origin, but declares generally that the act does
not "in any way interfere with the laws of any State or Territory relating to
the control, appropriation, use or distribution of water used in irrigation, or
any vested right acquired thereunder. .9 Thus, as viewed by the court, there
s8 PUB. L. No. 80, 89th Cong., 1st Sess. 3(d) (July 22, 1965).
86 PUB. L. No. 80, 89th Cong., 1st Sess. 102(b) (July 22, 1965).
87 H.R. REP. No. 603, 89th Cong., 1st Sess. 12 (1965).
88 City of Fresno v. California, 372 U.S. 627 (1963). Companion case: Dugan v.
Rank, 372 U.S. 609 (1963).
89 Rank v. Krug, 142 F. Supp. 1 (S.D. Cal. 1956).
9032 Stat. 388 (1902), 43 U.S.C. 371 (1964). For expositions of the federal-state
relations in water law west of the ninety-eighth meridian, see Goldberg, Interposition-
Wild West Water Style, 17 STAN. L. REV. 1 (1964) ; Sax, Problems of Federalism in
Reclamation Law, 37 U. COLO. L. REV. 49 (1964).
TEXAS LAW REVIEW
was no conflict between federal and state policy; Bureau of Reclamation
officials were simply not adhering to a policy of both governments.
The Ninth Circuit disposed of Fresno's contention by holding that, assum-
ing that California's "county-of-origin" and "watershed-protection" statutes
conferred rights upon Fresno, the United States was not precluded by section
8 of the Reclamation Act or any other law from acquiring such rights through
eminent domain.91 Thus Fresno was not entitled to a decree requiring Bureau
of Reclamation officials to satisfy Fresno's water needs before diverting San
Joaquin water into other watersheds. One of the cases cited by the court of
appeals was Ivanhoe Irr. Dist. v. McCracken,92 a 1958 case in which the
Supreme Court had made it clear that section 8 of the Reclamation Act does
not elevate all state water laws above federal laws, the specific holding being
that the 160-acre limitation of the Reclamation Act83 prevailed over the policy
of California law that there should be no such limitation.
When the Supreme Court considered Fresno's contention, it agreed with
the position taken by the court of appeals, but went on to make the anticlimactic
observation that the diversions of San Joaquin water by the Bureau of
Reclamation in this case had conformed to the California statutes, since the
region protected by those statutes embraces not only the originating watershed
but also areas adjacent thereto which can conveniently be supplied with water
from the stream, and that the recipient of water in this case was "conveniently
adjacent" to the San Joaquin.94
V. INTERSTATE DIVERSIONS
This article deals primarily with transbasin diversions involving a single
state. Exportation of water across a state line injects another factor into the
problem-the traditional claim of state governments of the right to retain natural
resources within their boundaries. The Supreme Court in 1908 in Hudson
County Water Co. v. McCarter95 upheld a state statute forbidding movement
of the waters of an intrastate stream into any other state.96 Although it is not
easily reconciled with later cases invalidating as unreasonable restraints upon
interstate commerce state efforts to retain natural gas for local needs,97 this
91 California v. Rank, 293 F.2d 340 (9th Cir. 1961).
92 357 U.S. 275 (1958).
93 Section 5 of the Reclamation Act forbids the use of water from reclamation
projects upon a tract of land in excess of 160 acres which is owned by a single person
Reclamation Act of 1902 5, 32 Stat. 389, 43 U.S.C. 431 (1964).
94 City of Fresno v. California, 372 U.S. 627, 630 (1963).
95 209 U.S. 349 (1908).
96 Such a statute, applicable only to ground water, was enacted by the 59th Texa~
legislature. Tex. Laws 1965, ch. 568, at 1245.
97 Pennsylvania v. West Virginia, 262 U.S. 553 (1923); West v. Kansas Natur.l
Gas Co., 221 U.S. 229 (1911); see Hardman, The Right of a State to Restrain th:"
Exportation of Its Natural Resources, 26 W. VA. L.Q. 1 (1919).
1965] TRANSBASIN DIVERSION OF i. .'ER 1057
case has never been repudiated. In addition, reservation by states of water for
future needs by interstate compacts has been sanctioned,98 and, according to
the Supreme Court's recent opinion in Arizona v. California,"9 such a reserva-
tion may be made by act of Congress. The doctrine of equitable apportionment
applied by the Court in suits between states for allocation of the flow of inter-
state streams may theoretically safeguard a state's future needs also, although
as applied so far this doctrine has protected only existing uses.'00 While the
existence of a "staked-out claim to unused water" by the states has been
attacked as "a variation from the ideal of maximum or optimum employment
of natural resources,"'10 perhaps this must be accepted as a price to be paid for
the benefits of federalism. This would not, of course, justify a preference for
a watershed of origin over another region within the same state.
VI. TOWARD A SOUND POLICY
It is now time to ask: what preference, if any, should be accorded origi-
A. Physical Factors
A first step in answering this query is to determine whether the physical
characteristics of a watershed justify, or tend to justify, retention of stream
flow within the watershed. There are rather obvious interrelationships among
water uses within a river basin. When water is diverted from the stream for
use within the basin, gravity tends to return the excess to the stream, where it
can be used again. Most industrial and municipal uses return ninety percent of
water diverted,102 and not even the best irrigation practice can cause retention
of all the water applied to the land.'03 Subirrigation of other lands may occur
as the unretained appropriated water works back through the ground and this
escaping water may seep back into the stream for use by downstream users.104
As the water gathered by a river basin for the trip to the sea passes from user
98 Hinderlider v. La Plata River & Cherry Creek Ditch Co., 304 U.S. 92 (1938).
99 373 U.S. 546 (1963).
100 Trelease, Arizona v. California: Allocation of Water Resources to People, States,
and Nation, in THE SUPREME COURT REVIEW 158, 169-72 (Kurland ed. 1963).
101 Id. at 166-67.
102 Davidson, Demands for and Uses of Water in Industry, in IOWA'S WATER RE-
SOURCES-SOURCES. USES. AND LAWS 71 (1956). Jessen, Industrial Water-Uses and
Needs in Texas, 1952-1954 UNIVERSITY OF TEXAS PROCEEDINGS ON WATER LAW 70, 77,
discusses uses for industrial purposes. Smallhorst, Analysis of VWater Pollution in Texas
-Types, Location, and Extent, 1955 UNIVERSITY OF TEXAS PROCEEDINGS ON WATER LAW
81, 89, points out that because of increased efforts of the health authorities to enforce
proper treatment of sewage, farmers are increasingly using sewage plant discharge for
cattle feed crops, cotton, and grazing land. For an exposition on water reuse in Texas,
see H.R. Doe. No. 494, 87th Cong., 2d Sess., pt. 2, at 233-35 (1962).
103 NATIONAL RESOURCES PLANNING BD., STATE WATER LAW IN THE DEVELOPMENT
OF THE WEST 24 (1943).
104 Id. at 26.
TEXAS LAW REVIEW
to user, the nature of each use may have serious effects upon subsequent uses.
Even the non-consumptive use of electric power production may, by heating
the water, damage swimming resorts downstream and injure fish life and
destroy recreational and scenic values of impounded water upstream by draw-
ing down reservoir levels. Land uses are also related to water uses in a basin;
excessive cutting of forests or poor cultivation methods may cause floods and
droughts, and, in addition, may cause excessive soil runoff which, by silting
out, shortens the life of reservoirs. Such interrelationships have demonstrated
that planning for development of surface water resources should embrace at
least the entire basin, and that any diversion of water from a basin should be
undertaken only with full awareness of the possible ramifications. It does not
follow, however, that planning should be limited to the basin, and many writers
have questioned the appropriateness of the watershed as the proper unit for
It should not be supposed that the watershed is a complete and bounded
hydrological entity. A watershed is not necessarily isolated from the adjacent
watershed. This is a consequence of the natural equilibrium between surface
and ground water caused by the charging of the ground water during times
of surface excess and the discharging from ground water into streams in times
of surface slack.106 A graphic example is the Edwards aquifer, a water-bearing
limestone formation which traverses and is drained by the upper reaches of
the Colorado, Guadalupe, San Antonio, and Nueces basins.107 The principal
recharge occurs in the Nueces basin and the principal natural discharge is in
the Comal and San Marcos Springs in the Guadalupe River basin. With-
drawals from the Edwards aquifer by towns in the San Antonio basin in 1957,
a period of drought, caused the Guadalupe River flow to lessen.108
The notion that there is a physical basis-some sort of "natural law"-
for a policy of preference of originating basins is also dispelled by the difficulty,
discussed earlier, of defining a watershed.109 It is very significant in this con-
nection that the California "county-of-origin" and "watershed-protection"
statutes frankly seek to protect not merely watersheds, but also counties and
105 See, e.g., Bower, Some Physical, Technological, and Economic Characteristics 'of
Water and Water Resources Systems: Implications for Administration, 3 NATURAL IR-
SOURCES J. 215, 220 (1963) ; Fox & Craine, Organizational Arrangements for IVW!'er
Development, 2 NATURAL RESOURCES J. 1, 7 (1962). The mystique of river basin devclo'-
ment is examined in Wengert, The Politics of River Basin Development, 22 LAW &'
CONTEMP. PROB. 258, 264-68 (1957).
106 McGuinness, Water for the United States: An Analysis of the Report of t::,'
Senate Select Committee on National Resources, 2 NATURAL RESOURCES J. 187, 1I'"
107 H.R. Doc. No. 494, 87th Cong., 2d Sess.. pt. 3, at 10 (1962).
10s Ibid. Although not so dramatic, all major river basins in Texas are traversed !'v
ground water aquifers which cause natural interbasin transfer. TEX. BD. OF \X':
ENGINEERS, A PLAN FOR MEETING THE 1980 WATER REQUIREMENTS OF TEXAS 29 (1'i').
o09 See text accompanying notes 61-65 supra.
TRANSBASIN DIVERSION OF P'"VER
areas "adjacent" to watersheds of origin. The object of those statutes is to
extend protection on the basis of proximity to the source of supply, rather than
on the basis of hydrological phenomena.
To say that there are hydrological interrelationships among water uses
within a watershed is not to say that efficiency in water use will be promoted
by retaining stream flow within the basin. Repeated reuse of water will be
possible in the watershed of destination, also, since it is subject to the same
hydrological principles as the basin of origin. Whether transbasin diversion
will put water to better use depends upon other factors.
B. The Nature of the Intrabasin Interests to Be Protected
The entire gamut of the manifold benefits from stream flow may be repre-
sented in a single basin, and a diversion of water from the basin may impair
any or all types of benefits enjoyed by the basin of origin. Some of these
benefits bear the label "water right," and are given special protection. Certain
other benefits not graced by that magic label are, nevertheless, quite significant.
Among these are the enjoyment by the public of recreational and scenic values
in water. On a more practical level, businessmen who serve farmers will surely
suffer if the extent of irrigated acreage of their customers is reduced by
transbasin diversion. A United States Fish and Wildlife Commissioner has
warned that diversions by the Texas Basins Project from areas of "surplus"
during dry years could have a detrimental impact upon the marine life within
the coastal estuaries, since such marine life has a narrow tolerance to changes
in environment;110 perhaps not all the water which runs into the Gulf of
Mexico is "wasted" from the view of oystermen, shrimpers, fishermen, and
conservationists. In addition to benefits being presently enjoyed, there are
future benefits which it is anticipated will be received by the basin and its
inhabitants as the population and economy expand to predicted levels. On the
basis of such anticipations, investments of money are made in land and business
enterprises in the basin.
In the absence of a law protecting basins of origin, only those interests
called "water rights" have legal protection against transbasin diversion, and
even the latter cannot ordinarily resist the power of eminent domain, which is
likely to be available for large water projects. All of these are important
interests, but whether they are important enough to block a proposed trans-
basin diversion depends upon a comparison of those interests with the benefits
to be derived from diversion. It would be folly for a state to jettison a trans-
basin project of vast importance to the economy of the state in order to assure
the continued solvency of a handful of intrabasin businessmen. Such business-
11OTex. Water Report, Jan. 23, 1964, p. 2.
TEXAS LAW REVIEW
men are in much the same position as owners of motels, restaurants, and gaso-
line stations located along a highway whose traffic is one day diverted to an
-expressway at another location. It would be impracticable to attempt to com-
pensate all persons who have been injuriously affected in any way by public
improvements. It would be intolerable to allow such interests to block needed
public improvements. When a water project is involved, there is the added
risk that protection of future needs of the originating basin will cause waste of
water until such time as those needs develop.
C. The Mechanics of Protection
As has been indicated, proposed transbasin diversion should be rejected
for the sake of intrabasin interests only if the benefits from protecting such
interests are more important to the state than the benefits to be derived from
the project. This can be determined only on a project-by-project basis. Trans-
basin diversion per se is neither good nor bad. Statutes of general application,
such as those in California, Colorado, and Nebraska, lack the flexibility
demanded by the nature of the task. What is needed is machinery which will
provide for thorough consideration of interests both inside and outside the
basin of origin and set up as a standard for decision the welfare of the entire
state. Future water supplies of basins of origin should be preserved in
preference to proposed transbasin diversion in instances where the anticipated
development of the originating basin, though proceeding slowly, will prob-
ably be of greater benefit to the state than would the proposed trans-
basin diversion. Project proponents, whether the project involves transbasin
use or not, should always be encouraged or required to develop nearby
sources uniquely available to them before tapping sources much in demand by
others, presently or prospectively. Claims of benefits on both sides must be
subjected to searching examination.
In a state having a well-considered, comprehensive state water plan and
a competent water administrative agency with broad discretion to grant or deny
applications for permits to appropriate water and construct water facilities,
there is probably no need for a statute dealing expressly with transbasin
transfers. The problem of transbasin transfer is essentially no different from
other problems confronting such an agency-for example, a conflict between
upstream and downstream proposed projects. Note well, however, that this
conclusion is based upon the stated qualifications that there must be an ade-
quate state water plan and a competent agency with discretionary authority. If
some statute on transbasin diversion is thought necessary, perhaps the best
type would be a statute requiring a permit to divert water outside the water-
1965] TRANSBASIN DIVERSION OF H+ 2R 1061
shed, conferring broad administrative discretion to grant or deny such permits,
and directing the agency's attention to the relevant criteria.111
111 As a model, one might consider the North Carolina statute requiring a certificate
from a state agency before riparian rights can be condemned.
The Board shall issue certificates only to projects which it finds to be
consistent with the maximum beneficial use of the water resources in the State
and shall give paramount consideration to the Statewide effect of the proposed
project rather than its purely local or regional effect. In making this deter-
mination, the Board shall specifically consider:
(1) The necessity of the proposed project;
(2) Whether the proposed project will promote and increase the storage
and conservation of water;
(3) The extent of the probable detriment to be caused by the proposed
project to the present beneficial use of water in the affected watershed
and resulting damages to present beneficial users;
(4) The extent of the probable detriment to be caused by the proposed
project to the potential beneficial use of water on the affected water-
(5) The feasibility of alternative sources of supply to the petitioning
authority and the comparative costs thereof;
(6) The extent of the probable detriment to be caused by the use of
alternative sources of supply to present and potential beneficial use of
water on the watershed or watersheds affected by such alternative
sources of supply.
N.C. GEN. STAT. 162A-7(C) (1964).