All over the western United States, water rights* are defined with “beneficial use” in mind. Section 2 of Article X (”Water”) of California’s Constitution says:

It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare.

Now, I have always thought that beneficial use was defined to mean “producing positive economic value” BUT that transfers/trades of water were NOT considered beneficial use. Since transfers and trades DO happen, I think that’s wrong.

Since control over transfers rests with the State Water Resources Control Board, I looked up their definitions of beneficial use (for municipal, irrigation, etc.), long-term transfers, and “wasteful use” [under California Code of Regulations, Title 23, Division 2, Chapter 2, Article 2, Subarticle 2 -- turn off pop-up blockers]

My impression is that SWRCB will approve transfers that continue to use water in a beneficial way but that such transfers do not automatically qualify as “beneficial.” Is that true?

Just for reference, note that economists would define any result from a voluntary trade to be “beneficial,” but I guess there are more lawyers than economists at SWRCB. That’s a pity if it means that “legitimate” trades (win-win) are slowed or blocked by the need to prove beneficial use.

Bottom Line: Regulations regarding beneficial use need to be simple (or non-existent) if we are going to maximize the value of water rights.

Riparian rights result from the ownership of land bordering a surface water source (a stream, lake, or pond). As a class, these rights are senior to most appropriative rights, and riparian landowners may use natural flows directly for beneficial purposes on riparian lands without applying for a permit.

Appropriative rights are acquired by putting surface water to beneficial use. Prior to 1914, appropriative rights could be claimed by simply diverting and using the water, posting a notice of appropriation at the point of diversion, and recording a copy of the notice with the County Recorder. Since 1914, the acquisition of appropriative rights has required an application through the State Water Board.

Pueblo rights rights are derived from Spanish law whereby Spanish or Mexican pueblos could claim water rights. As a result, pueblo rights are paramount to the beneficial use of all needed, naturally occurring surface and subsurface water from the entire watershed of the stream flowing through the original pueblo. Water use under a pueblo right must occur within the modern city limits, and excess water may not be sold outside the city. The quantity of water available for use under a pueblo right increases with population and with extensions of city limits. In general pueblo rights are limited to use of water for ordinary municipal purposes.