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Show from the Columbia River Basin to the southwest region of the United States. Professors Charles Meyers and Richard Posner have made the following suggestions: Because unappropriated waters are technically not owned, there is a conceptual difficulty in suggesting that the state may sell them. However, since the state has the power to create property rights in the waters by establishing procedures for their appropriation and since the state could itself appropriate the waters, we conclude that the state can establish a procedure by which it sells unappropriated water to a purchaser in another state. Another serious problem with any major interregional transfer arises from the fact that the waters to be exported may be shared among several states. The Columbia River Basin, for example, includes portions of Washington, Oregon, Idaho, Montana and Wyoming, as well as Canada. In such cases of multistate basins, the states cannot know in advance of an apportionment how much water they have power to create appropriation rights in- that is, how much they can sell. To resolve this problem, there must be an apportionment- by congressional action, Supreme Court decree, or interstate compact- or a regional entity must be created that would hold title to the waters, effect the sale, and divide the proceeds among the states represented in the entity. The second alternative is probably no simpler than the first because the entity must still conduct an apportionment of sorts when it comes to divide the proceeds of the sale among the participating states. ( C. J. Myers and R. A. Posner, Market Transfers of Water Rights, pp. 44- 46 ( National Water Commission Publication, NTIS ACC. NO. PB- 202- 620, 1971)). Interregional transfers and sales of water are not within the scope of this paper, but the fact that proposals have been made for such sales by States within the area of origin are of present interest because of the conceptual similarity to the imposition of water- use fees by a State. In other words, if a State is legally empowered to sell its unappropriated water to another State, then, a fortiori, it would be empowered to impose water- use fees on users within the State. B. Sales Within the State: Public Auction Legal writers have also suggested that it would be legal for an appropriation State to " auction" unappropriated water to the highest bidder. This proposal would be compared to the procedures used by most States for leasing state lands for oil and gas, oil shale, and other minerals. When the lands are known to contain valuable minerals, then leasing procedures require that public notice be given by publication of the details of the lands to be offered for lease, including the time within which sealed offers will be accepted. At the appointed time and place for opening the competitive bids, the bids are opened and evaluated, and the lease is awarded to the highest qualified bidder. By analogy, since the State knows that its unappropriated water is a valuable resource, it would be sold to the highest bidder pursuant to competitive bidding procedures similar to those employed for mineral leasing. When the State determined that there was an active interest or market demand for water in a particular river basin, it would determine how much of its unappropriated water should be offered for sale, and proceed to hold the sale. ( See e. g., Meyers and Posner, op. cit., supra 39- 43.) C. Sales Within the State: Some Illustrations 1. The Orange County Experience The water- use fees imposed on groundwater use in Orange County, California, are often cited as an illustration of the economic and practical efficiency with which such a system can work. In barest form, the essence of the system is that any potential water user is entitled to pump water from the underground basin in accordance with the schedule of fees established by the management district for water use; and the district imports water to recharge the basin sufficient to sustain the demands on the basin. The fee schedule for the various users is rather complicated, and to some extent is intended to allow credit to the earlier water users for the seniority of their rights. From a legal standpoint, the interesting features relate to the manner in which such a system came into being. California originally adopted the absolute ownership doctrine of groundwater, which allowed overlying landowners to make full use of percolating groundwater without regard to other landowners. Then, in Katz v. Walkinshaw, 141 Cal. 116, 74 Pac. 766 ( 1903), the court adopted the rule of correlative use, which gives all overlying owners common rights to percolating waters beneath their lands. When the supply is sufficient, each owner withdraws water to meet his needs, but in time of shortage each owner is limited to the reasonable quantity of water needed to meet his beneficial needs, subject to similar and equal rights of all other overlying owners. In water- short Southern California, many underground basins provided a relatively inexpensive supply of water. As the groundwater supply was developed, and more and more uses initiated, the basins were threatened with irreparable damage from salt water intrusion and exhaustion of the basin supply. Underground water basin management programs were initiated, but these were of limited effectiveness until Pasadena v. Alhambra, 33 Cal. 2d 908, 207 P. 2d 17 ( 1949). In that case, the court noted that the landowners overlying the basin originally had various kinds of rights to withdraw water from the basin, and also underscored the fact that " as between appropriators, the one first in time is the first in right, and a prior appropriator is entitled to all the water he needs, up to the amount that he has taken in the past, before a subsequent appropriator may take any." 84 |