In essence, the Town of Purcellville was obligated to acquire downstream riparian rights if it was to continue to impound water and divert it from its basin of origin. With regard to the ACT controversy, this raises an interesting question: Does the Atlanta metropolitan area's eminent domain authority extend to land located in Alabama? In light of the Purcellville decision, this is a question that may require resolution as it is quite likely that the adverse impacts of the Atlanta metropolitan area's transbasin diversions will occur in Alabama.

IV.

PROCEDURAL ISSUES

A.

The states bear the burden of proving that the draft allocation agreements are
consistent with the requirements of applicable federal laws and regulations.

Concurrence/nonconcurrence

Article VII(a) of the ACT Compact establishes the concurrence/nonconcurrence procedure applicable to federal review of the draft ACT Allocation Agreement:"

89

It is the intent of the parties to this Compact to develop an allocation formula for equitably apportioning the surface waters of the ACT Basin among the states while protecting the water quality, ecology and biodiversity of the ACT, as provided in the Clean Water Act, 33 U.S.C. Sections 1251 et seq., the Endangered Species Act, 16 U.S.C. Sections 1532 et seq., the National Environmental Policy Act, 42 U.S.C. Sections 4321 et seq., the Rivers and Harbors Act of 1899, 33 U.S.C. Sections 401 et seq., and other applicable federal laws. For this purpose, all members of the ACT Basin Commission, including the Federal Commissioner, shall have full rights to notice of and participation in all meetings of the ACT Basin Commission and technical committees in which the basis and terms and conditions of the allocation formula are to be discussed or negotiated. When an allocation formula is unanimously approved by the State Commissioners, there shall be an agreement among the states regarding an allocation formula. The allocation formula thus agreed upon shall become effective and binding upon the parties to this Compact upon receipt by the Commission of a letter of concurrence with said formula from the Federal Commissioner. If, however, the Federal Commissioner fails to submit a letter of concurrence to the Commission within two hundred ten (210) days after the allocation formula is agreed upon by the State Commissioners, the Federal Commissioner shall within forty-five (45) days thereafter subinit to the ACT Basin Commission a letter of nonconcurrence with the allocation formula setting forth therein specifically and in detail the reasons for nonconcurrence; provided, however, the reasons for nonconcurrence as contained in the letter of nonconcurrence shall be based solely upon federal law. The allocation formula shall also become effective and binding upon the parties to this Compact if the Federal Commissioner fails to submit to the ACT Basin Commission a letter of nonconcurrence in accordance with this Article. Once adopted pursuant to this Article, the allocation formula may only be modified by unanimous decision of the State Commissioners and the concurrence by the Federal Commissioner in accordance with the procedures set forth in this Article.

Burden of proof

The critical question that was not addressed when the ACF and ACT Compacts were enacted is whether the burden of proof rest with the states (to prove consistency with federal laws and regulations) or with the Federal Commissioner (to prove inconsistency). The chief negotiator for the state of Georgia has taken the position that the Federal Commissioner must concur unless he can point to a specific statutory or regulatory violation."

90

It is a well-established provision of American jurisprudence that a party seeking governmental approval (in whatever form that approval might take) has the burden of demonstrating why approval should be forthcoming." This is particularly true when the issue is use of public resources such as water."

92

$9 Identical language is contained in Article VII(a) of the ACF Compact.

90 Accord Moore, supra note 5 at 7-8.

91 See, for example, Shokal v. Dunn, 707 P.2d 441, 450 (Idaho, 1985) (burden of proof rests with the party seeking to use a public resource, not on the party objecting to the proposed use, to show that use is in the public interest).

92

See, for example, Marcon, Inc. v. Commonwealth. Department of Environmental Resources, 462 A.2d 969, 971-972 (Commonwealth C1. Pa., 1983) (burden of proof rests with the party seeking to use public waters to show that the resources will not be impaired).

With regard to the use of water resources, requiring the applicant to bear the burden of proof is statutory in Georgia. O.C.G.A. §12-5-31(c) provides that, "[t]o obtain a permit pursuant to this Code section, the applicant must establish that the proposed withdrawal, diversion, or impoundment of surface waters is consistent with this article." The applicant, therefore, bears the burden of proof.

Assuming arguendo that the initial burden of proof fell on the federal agencies to demonstrate inconsistency with the requirements of federal laws and regulations, the burden would shift to the states once the federal agencies have made such a showing. In essence, once the federal agencies have demonstrated inconsistency, the burden shifts to the states to demonstrate consistency with federal statutory and regulatory requirements. With regard to the draft ACT Allocation Agreement, the federal agencies have made such a showing." As a result, the burden of proving consistency has shifted to the states.

Consequently with regard to the 6 July 2001 draft ACT Allocation Agreement, the burden is on the states to demonstrate to the Federal Commissioner that the provisions of the Agreement are consistent with the requirements of both federal and state law. In terms of applicable federal law, for example, the states have the burden of demonstrating compliance with the requirements of the Federal Power Act, the Fish and Wildlife Coordination Act, the Clean Water Act, the Safe Drinking Water Act, various Rivers & Harbors Acts, various species protection statutes (including the Endangered Species Act) and the Coastal Zone Management Act. To the extent that these federal programs are implemented through programs established pursuant to state law, compliance with the requirements of applicable state laws would also have to be demonstrated.

Compliance with procedural statutes, such as the National Environmental Policy Act (NEPA) and the Administrative Procedure Act, would also have to be demonstrated. It has been argued, for example, that the Federal Commissioner is precluded from concurring if the requirements of NEPA have not been fulfilled.

In order to fulfill their burden of proof requirements, the states may be forced to rely on numeric simulations and other forms types of models. The federal agencies have noted that the models that have been offered to demonstrate the impacts of the draft ACT Allocation Agreement have not, in fact, been models of the provisions of the draft ACT Allocation Agreement." In essence, in order to meet burden of proof requirements, the models offered by the states must be models of the actual Allocation Agreement."

96

93 See the letter of 16 July 2001 from Jim B. Lloyd, P.E., Assistant Administrator for Power Resources, Southeastern Power Administration to Linsday Thomas, Federal Commissioner, supra note 42; letter of 16 July 2001 from Larry E. Goldman, Field Supervisor, Fish & Wildlife Service to Lindsay Thomas, Federal Commissioner, supra note 43; letter of 24 July 2001 from Col. J. David Norwood, District Engincer, U.S. Army Corps of Engineers to Lindsay Thomas, Federal Commissioner, supra note 41; letter of 31 July 2001 from Thomas C. Welborn, Branch Chief, U.S. Environmental Protection Agency to Lindsay Thomas, Federal Commissioner, supra note 43. See also letter of 18 July 2001 from George B. Taylor, President, Southeastern Federal Power Customers Inc. to Lindsay Thomas, Federal Commissioner, supra note 9.

'See letter of 18 July 2001 from George B. Taylor, President, Southeastern Federal Power Customers Inc. to Lindsay Thomas, Federal Commissioner, supra note 9.

95

The Fish & Wildlife Service, for example, noted a "disconnect" between the draft ACT Allocation Agreement and the model that was intended to demonstrate the implications of the Agreement. See letter of 16 July 2001 from Larry E. Goldman, Field Supervisor, Fish & Wildlife Service to Lindsay Thomas, Federal Commissioner, supra note 43.

96 Any judicial review of the Federal Commissioner's concurrence/nonconcurrence decision will be based on the administrative record developed during the Commissioner's review process. At a minimum this record will include all of the comments of the federal agencies, all public comments and any models or other materials submitted by the states in support of the draft ACT Allocation Agreement.

Not all interstate agreements are subject to congressional ratification. The Supreme Court has ruled that only those interstate agreements "tending to the increase of political power in the states, which may encroach upon or interfere with the just supremacy of the United States" are subject to approval by the Congress. Virginia v. Tennessee, 148 U.S. 503, 519 (1893). This conclusion was reaffirmed in U.S. Steel Corporation v. Multistate Tax Commission, 434 U.S. 452 (1978)" and New Hampshire v. Maine, 426 U.S. 363 (1976)." Irrespective, virtually all interstate agreements involving the management and allocation of water resources, because of their impacts on such federal issues as navigation and commerce, require congressional approval."

98

99

As noted above, the ACT Compact authorized the states to develop an "allocation formula" to equitably apportion the waters of the ACT Basin. The definition of “allocation formula" included representation of the apportionment via “a table, chart, mathematical calculation or any other expression of the Commission's apportionment of waters."

101

102

100

These tools were to be used to quantify an equitable apportionment of the water resources of the ACT Basin. While the term "equitable apportionment" was left undefined, it would appear that it is a reference to the equitable apportionment decisions of the Supreme Court. In these decisions, the Court usually allocates specific quantities of water to the state parties to the proceeding. This has been referred to as a "mass allocation" of water. It is in this context that the reference to "a table, chart, mathematical calculation or other expression" can be understood. The inescapable conclusion is that the framers of the ACT Compact (as well as Congress when it ratified the Compact) intended the term "allocation agreement” to refer to a quantifiable division or mass allocation of the waters of the ACT Basin.

The draft ACT Allocation Agreement, however, goes far beyond the scope of the "allocation agreement" as defined in the ACT Compact. For all intents and purposes, the 6 July 2001 draft ACT Allocation Agreement is a management plan for the entire ACT Basin. As such, it increases the "political power in the states" and appears to "encroach upon or interfere with the just supremacy of the United States[.]" This conclusion is applicable equally to the draft ACF Allocation Agreement. Consequently, as the Supreme Court has made clear, the allocation agreements are "subject to approval by the Congress."

The draft ACT Allocation Agreement is substantively flawed in that it attempts to make mandatory federal agency duties that are discretionary. Alternatively, it may be an attempt at a de facto reauthorization of Lake Allatoona and Carters Lake. If so, it is equally flawed but for different reasons.

Alabama's acceptance of the concept of reasonable use as constituting any type of limitation on the development of water in Georgia strains credulity. The reasonable use limitation is virtually limitless. Furthermore it introduces an element of uncertainty that may have substantial negative consequences. By reaffirming the applicability of riparian water law and by authorizing the issuance of permits for transbasin diversions, Georgia may have created a situation in which is it required to acquire downstream riparian rights as soon as downstream riparian proprietors can demonstrate that they are being harmed by the transbasin diversions.

97"[N]ot all agreements between States are subject to the strictures of the Compact Clause.... "The Constitution did not purport to exhaust imagination and resourcefulness in devising fruitful interstate relationships. It is not to be construed to limit the variety of arrangements which are possible through the voluntary and cooperative actions of individual States with a view to increasing harmony within the federalism created by the Constitution"." 434 U.S. at 469-470, quoting New York v. O'Neill, 359 U.S. 1, 6 (1959).

98 The application of the Compact Clause is limited to agreements that are 'Directed to the formation of any combination tending to the increase of political power in the states, which may encroach upon or interfere with the just supremacy of the United States.'" 426 U.S. at 369, quoting Virginia v. Tennessee, 148 U.S. at 519.

99

George William Sherk, "Resolving Interstate Water Conflicts in the Easter United States: The Re-Emergence of the Federal-Interstate Compact," 30 Water Resources Bulletin 397, 399 (1994). Congressional consent is required "for all agreements between states apportioning interstate waters." Douglas L. Grant, "Water Apportionment Compacts Between States," 4 Waters and Water Rights 549 (R. Beck, ed., 1991) (footnote omitted).

io Article IV (b), supra note 1.

101

George William Sherk, Dividing the Waters: The Resolution of Interstate Water Conflicts in the United States 3-20 (Kluwer Law International 2000).

102 Vest, supra note 5 at 696, citing Nebraska v. Wyoming, 325 U.S. 589, 627 (1945) and George William Sherk, "Equitable Apportionment after Vermejo: The Demise of a Doctrine," 29 Natural Resources Journal 565, 571 (1989).

The draft ACT Allocation Agreement is procedurally flawed in that the federal and state agencies who are directly affected by the Agreement were not involved in drafting it. As a result, it is quite likely that the draft ACT Allocation Agreement will be opposed by numerous governmental instrumentalities including the U.S. Department of Justice.

In its present form, the draft ACT Allocation Agreement is neither good law nor good policy. Except as a first draft of a subsequent agreement, it does not warrant further consideration. The same concerns and the same conclusion apply to the draft ACF Allocation Agreement.

To date, the states have spent in excess of $25,000,000 on studies and negotiations as needed to resolve the ACF and ACT conflicts. In doing so, negotiations have been held without public notice, the public has been excluded as have those federal agencies whose expertise is critically needed in any resolution of the conflicts. The result is that the states have created more problems than they have resolved.

Because of such state inability to resolve interstate water conflicts, there have been an increasing number of commentators who have advocated a Congressional solution. Congress clearly has authority under the commerce clause of the Constitution to regulate both navigable waters and any other waters the use of which would affect interstate commerce. Kaiser Aetna v. United States, 444 U.S. 164 (1979). It must be remembered that water is an article of commerce that is subject to regulation by Congress. Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (1982).

It may also be argued that Congress has the authority under the property clause of the Constitution to apportion "interstate non-navigable" waters that are impounded in federal facilities. Trelease, one of the most prominent commentators on issues relating to water law and policy, argued that unappropriated waters stored in such facilities could be viewed as federal property that is subject to Congressional apportionment,' Trelease found additional authority for Congressional apportionment of interstate water resources under the war and treaty powers of the Constitution as well as Congressional authority over navigation and Congressional power to tax and spend to promote the general welfare."

103

104

If the past is actually prologue, then the Congress should give serious consideration to exercising this authority to resolve the ACF and ACT conflicts.

I would like to thank the Subcommittee for the opportunity to express my clients' concerns regarding implementation of the Alabama-Coosa-Tallapoosa River Basin Compact and the Apalachicola-Chattahoochee-Flint River Basin Compact. I look forward to answering any questions you might have.

103 Frank J. Trelease, “Arizona v. California: Allocation of Water Resources to People, States, and Nation," 1964 Supreme Court Review 158, 176-182 (1964).

104 Id. at 180-182.

26

Mr. BARR. I would, again, remind all witnesses that their full statements will be submitted for the record.

I would also at this point like to ask unanimous consent to have the following four documents entered in the record.

One is the remarks in writing by the Federal Commissioner, Mr. Thomas, dated December 13th of 2001.

[The information referred to follows:]

Federal Current Impressions - December 13, 2001

Opening Remarks of the Federal Commissioner, December 13, 2001

As I mentioned on November 13, 2001, the States of Alabama, Georgia, and Florida have - after considerable and earnest effort - come a long way. Although we do not yet have a full understanding of their concepts, it is apparent to us and to the public that movement has occurred. It should occur. The responsibility which we all shoulder is an important one, not just for today but for tomorrow as well. These Compacts are unique and they have created unique challenges for crafting allocation plans for the next three to five decades.

I respect the States and their efforts and I appreciate the role which the Compact sets for the States in formula development. In light of that respect and appreciation, during the initial period of formula development I made it a practice to assure that federal agencies were available to the States for information discussions and technical assistance. And, I will continue to do so. Fortunately, the federal agencies which I represent have been consistently willing to be supportive in such a role. Fortunately, the States have been willing to ask for that assistance.

Still, that approach meant during the first period that the provision of federal expertise was largely reactive to issues and concerns raised by the States and our comments were reactive to proposals which the States tendered. On November 13, I expressed my interest in entering a period where the federal agencies were more "active" - and not just "reactive." I am committed to that more “active” role as we all move ahead. There is a keen need for that dialogue, I appreciate the willingness of the ACT Committee to embrace, immediately, that overture and I appreciate the Committee's willingness to schedule this public session. I think that action is tangible evidence of the commitment of all of us to be as constructive and creative as we can be toward achieving the important goal set by the Compact.

What did I mean by more "active"? The federal perspective on formula development is more than one of technical expertise alone - as important and valuable as that expertise is. The federal agencies which I represent are called upon by federal law to monitor a variety of federal programs. In the course of overseeing those federal programs, these agencies are responsible for a variety of issues key areas of interest. In technical expertise discussions, the States might see the results of these areas of interest but they might not see, or have an opportunity to understand fully, why those areas are significant to the federal agencies.

Although other issues exist, both from the States' perspective as well as ours, our current impressions focus on these key interrelated areas:

a. adaptive management

b. public role during implementation

c. congressional reauthorization of project purposes

d. flow and reservoir levels

e. operational practicability

f. compensation for impacts on hydropower