[Federal Register Volume 80, Number 250 (Wednesday, December 30, 2015)]
[Notices]
[Pages 81508-81527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32846]


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DEPARTMENT OF AGRICULTURE

Forest Service

RIN 0596-AD14


Ski Area Water Clause

AGENCY: Forest Service, USDA.

ACTION: Notice of final directive.

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SUMMARY: The U.S. Forest Service (Forest Service or Agency) is amending 
its internal directives for ski area concessions by adding two clauses 
to the Special Uses Handbook, Forest Service Handbook (FSH) 2709.11, 
Chapter 50, addressing the sufficiency of water for operation of ski 
areas on National Forest System (NFS) lands. The Forest Service 
recognizes the importance of winter sports opportunities on NFS lands 
and the need to address the sufficiency of water for ski areas 
operating on NFS lands. By addressing this need, this final directive 
will promote the long-term sustainability of ski areas on NFS lands and 
the economies of the communities that depend on revenue from those ski 
areas.

DATES: This directive is effective January 29, 2016.

ADDRESSES: The final directive will be available for inspection at the 
office of the Director, Recreation and Heritage Resources Staff, Forest 
Service, USDA, 4th Floor Central, Sidney R. Yates Federal Building, 
1400 Independence Avenue SW., Washington, DC, during regular business 
hours (8:30 a.m. to 4:00 p.m.), Monday through Friday, except holidays. 
Those wishing to inspect these documents are encouraged to call ahead 
to facilitate access to the building. Copies of documents in the record 
may be requested under the Freedom of Information Act. The final 
directive will be posted on the Forest Service's Web site at http://www.fs.fed.us/specialuses on the effective date. Only the sections of 
the FSH that are the subject of this notice have been posted, i.e., FSH 
2709.11, Special Uses Handbook, Chapter 50, Standard Forms and 
Supplemental Clauses, Section 52.4.

FOR FURTHER INFORMATION CONTACT: Sean Wetterberg, National Winter 
Sports Program Manager, Recreation, Heritage, and Volunteer Resources 
staff, 801-975-3793, or Jean Thomas, National Water Rights Program 
Manager, Watershed, Fish, Wildlife, Air, and Rare Plants staff, 202-
205-1172. Individuals who use telecommunication devices for the deaf 
may call the Federal Information Relay Service at 800-877-8339 between 
8:00 a.m. and 8:00 p.m., eastern daylight time, Monday through Friday.

SUPPLEMENTARY INFORMATION:

1. Background and Need for the Final Directive

Constitutional and Statutory Authority

    The Forest Service's authority to manage lands under its 
jurisdiction derives from the Property Clause of the United States 
Constitution, which empowers Congress to ``make all needful Rules and 
Regulations respecting the . . . Property belonging to the United 
States.'' U.S. Const. art. IV, sec. 3, cl. 2. The Supreme Court has 
emphasized that Congressional authority over Federal lands is ``without 
limitations.'' Kleppe v. New Mexico, 426 U.S. 529, 539 (1976). In turn, 
Congress entrusted the Forest Service with authority to ``make such 
rules and regulations and establish such service as will insure the 
objects of the [national forests], namely to regulate their occupancy 
and use and to preserve the forests thereon from destruction.'' Organic 
Administration Act of 1897 (16 U.S.C. 551). The Organic Administration 
Act constitutes an ``extraordinarily broad'' delegation to the Forest 
Service to regulate use of NFS lands and ``will support Forest Service 
regulations and management . . . unless some specific statute limits 
Forest Service powers.'' Charles F. Wilkinson & H. Michael Anderson, 
Land and Resource Planning in the National Forests 59 (1987). See also 
Wyoming Timber Indus. Ass'n v. United States Forest Serv., 80 F. Supp. 
2d 1245, 1258-59 (D. Wyo. 2000). In the Organic Administration Act, 
Congress explicitly recognized that Forest Service regulations may 
affect the use of water on NFS lands (16 U.S.C. 481) (water on NFS 
lands may be used ``under the laws of the United States and the rules 
and regulations established thereunder'').
    The Forest Service has broad authority to regulate and condition 
the use and occupancy of NFS lands under the Term Permit Act of 1915 
(16 U.S.C. 497) (authorizing the Secretary of Agriculture to permit use 
and occupancy of National Forest land ``upon such terms and conditions 
as he may deem proper''); Multiple Use--Sustained Yield Act (MUSYA) (16 
U.S.C. 529) (authorizing the Secretary of Agriculture to develop and 
administer the surface resources of the National

[[Page 81509]]

Forests); and Federal Land Policy and Management Act (FLPMA) (43 U.S.C. 
1765) (authorizing the Secretary of Agriculture to impose terms and 
conditions of rights-of-way on Federal land). In 1986, Congress 
directly addressed the Forest Service's authority to regulate 
development of ski areas on NFS lands. In the National Forest Ski Area 
Permit Act of 1986 (16 U.S.C. 497b), Congress explicitly provided that 
permits are to be issued ``subject to such reasonable terms and 
conditions as the Secretary deems appropriate'' (16 U.S.C. 497b(b)(7)).

Regulatory Authority

    Consistent with its constitutional and statutory authority, the 
Forest Service regulates the occupancy and use of NFS lands, including 
ski area operations, through issuance of special use authorizations (36 
CFR part 251, subpart B). The Forest Service must include in special 
use authorizations terms and conditions that the Forest Service deems 
necessary to protect Federal property and economic interests (36 CFR 
251.56(a)(ii)(A)); efficiently manage the lands subject to and adjacent 
to the use (36 CFR 251.56(a)(ii)(B)); protect the interests of 
individuals living in the general area of the use who rely on resources 
of the area (36 CFR 251.56(a)(ii)(E)); and otherwise protect the public 
interest (36 CFR 251.56(a)(ii)(G)).

Purpose of the Final Directive

    One of the Forest Service's statutory duties is to provide the 
American public with outdoor recreation opportunities on NFS lands on a 
sustainable basis. One of these recreation opportunities is skiing, as 
many ski areas are operated on NFS lands under a permit issued by the 
Forest Service. Because water for snowmaking and other uses is critical 
to the continuation of ski areas on NFS lands, the Forest Service has a 
strong interest in addressing the long-term availability of water to 
operate permitted ski areas. This final directive will promote the 
long-term sustainability of ski areas on NFS lands by addressing the 
long-term availability of water to operate ski areas before permit 
issuance, during the permit term, and upon permit termination or 
revocation. Providing for the sustainability of ski areas on NFS lands 
will support jobs and the local economies that depend on revenue from 
ski areas on Federal lands. There are 122 ski areas that encompass 
about 180,000 acres of lands managed by the Forest Service. Ski areas 
receive roughly 23 million visitors annually, who contribute $3 billion 
yearly to local economies and support approximately 64,000 full- and 
part-time jobs in rural communities.
    Additionally, the final directive will reduce administrative costs 
to the United States by providing for more effective administration of 
ski area permits. The final directive will provide Agency employees and 
ski area permit holders with a consistent and comprehensive 
understanding of how water rights and water facilities should be 
managed under a ski area permit. Specifically, the final directive will 
provide direction related to the treatment of ski area water rights and 
authorization of water facilities under ski area permits, including at 
permit issuance, during the permit term, and upon permit termination or 
revocation.

Approach of the Final Directive

    The final directive contains two clauses for ski area water rights, 
one for eastern States that follow the riparian doctrine for water 
rights and one for western States that follow the prior appropriation 
doctrine for water rights. Under a riparian doctrine system, water 
rights are appurtenant to the land, whereas under a prior appropriation 
doctrine system, water rights may be severed from the land. Most ski 
areas on NFS lands are in western states that adhere to the prior 
appropriation doctrine.
    For the last 30 years, the Forest Service has required ownership by 
the United States, either solely or in narrow circumstances jointly 
with the permit holder, of water rights developed on NFS lands to 
support operation of ski areas in prior appropriation doctrine states. 
This policy was motivated by the concern that if water rights used to 
support ski area operations are severed from a ski area--for example, 
are sold for other purposes--the Forest Service would lose the ability 
to offer the area to the public for skiing.
    The final directive does not provide for ski area water rights to 
be acquired in the name of the United States; instead, the final 
directive focuses on sufficiency of water to operate ski areas on NFS 
lands. This modified approach for ski areas is appropriate given the 
characteristics of ski area water rights and ski areas. Unlike water 
rights diverted from and used on NFS lands by holders of other types of 
special use permits, ski area water rights may involve long-term 
capital expenditures. In western States like Colorado and New Mexico, 
holders of ski area permits may have to purchase senior water rights at 
considerable expense to meet current requirements for snowmaking to 
maintain viability. Holders of ski area permits need to show the value 
of these water rights as business assets, particularly during 
refinancing or sale of a ski area. The value of these water rights is 
commensurate with the significant investment in privately owned 
improvements at ski areas. These investments were recognized by 
Congress in enactment of the National Forest Ski Area Permit Act, which 
authorizes permit terms of up to 40 years. 16 U.S.C. 497b(b)(1).
    In addition to these financial issues, the land ownership patterns 
at ski areas--particularly the larger ones--often involve a mix of NFS 
and private lands inside and outside the ski area permit boundary, 
which makes it difficult to implement a policy of sole Federal 
ownership for ski area water rights. Much of the development at ski 
areas is on private land at the base of the mountains. As a result, 
water diverted and used on NFS lands in the ski area permit boundary is 
sometimes used on private land, either inside or outside the permit 
boundary.
    With respect to sufficiency of water for ski area operations, the 
final directive includes a definition for the phrase, ``sufficient 
quantity of water to operate the ski area,'' and clarifies when and how 
the holder must demonstrate sufficiency of water to operate the 
permitted ski area and new ski area water facilities; addresses 
availability of Federally owned ski area water rights during the permit 
term; and addresses availability of holder-owned ski area water rights 
during the permit term and upon permit revocation or termination. In 
particular, the final directive:
     Requires applicants for a ski area permit to submit 
documentation prepared by a qualified hydrologist, i.e., an individual 
with the requisite education (e.g., in geology, forestry, soils, or 
engineering), training, and experience in hydrology to address 
sufficiency of water, or licensed engineer demonstrating sufficiency of 
water to operate the permitted ski area before permit issuance;
     Requires the permit holder to submit documentation 
prepared by a qualified hydrologist or licensed engineer demonstrating 
a sufficient quantity of water to operate a ski area water facility, as 
defined by paragraph F.1.a and b of the final directive, before it is 
installed;
     Requires the permit holder to demonstrate a sufficient 
quantity of water to operate the ski area before transferring or 
repurposing original water rights (water rights with a point of 
diversion and use inside the ski area permit boundary that were 
originally

[[Page 81510]]

established by a permit holder) during the permit term;
     Addresses the availability of Federally owned ski area 
water rights during the permit term;
     Provides that Federally owned original water rights remain 
in Federal ownership;
     Requires the holder to maintain all ski area water rights, 
and reserves the right of the United States to maintain Federally owned 
original water rights;
     Requires the holder to offer to sell the holder's interest 
in original water rights to the succeeding permit holder upon permit 
termination or revocation; and
     If the succeeding permit holder declines to purchase the 
holder's interest in original water rights jointly owned by the United 
States, requires the holder to offer to sell that interest at market 
value to the United States.
    Water clauses for special uses other than ski areas are not 
affected by this final directive.

2. Response to General Comments on the Proposed Directive

Public Input

    Prior to publishing the proposed directive for public comment, the 
Forest Service conducted four listening sessions and three open houses 
in April 2013 to identify interests and views from a diverse group of 
stakeholders regarding a revised water clause for ski areas (78 FR 
21343, Apr. 10, 2013). Two listening sessions were held in Washington, 
DC; one was held in Denver, Colorado; and one was held in the Lake 
Tahoe area in California. Additionally, open houses were held in 
Denver, Colorado; Salt Lake City, Utah; and the Lake Tahoe area in 
California. The Agency used input from these listening sessions and 
open houses in developing the proposed directive.
    On June 23, 2014, the Forest Service published the proposed 
directive in the Federal Register (79 FR 35513). The proposed directive 
was posted online at http://www.gpo.gov/fdsys/pkg/FR-2014-06-23/pdf/2014-14548.pdf. The Forest Service received 12,721 letters in response 
to the proposed directive, of which 35 were unique. Additionally, the 
Agency provided a 120-day government-to-government Tribal consultation 
period beginning on July 28, 2014. The Agency received written 
responses from 5 Tribes.

Comments Generally in Favor of the Proposed Directive

    Comment: More than 12,000 commenters were generally in favor of the 
proposed directive and offered various reasons as to why they supported 
the proposed directive. It was characterized as a carefully crafted 
directive that balanced protecting rivers and streams with commercial 
interests. One commenter praised the Agency for balancing the 
fundamental principles of Agency land management with ski industry 
expectations. These principles include being able to carry out the 
Forest Service's statutory responsibilities to manage NFS lands on 
behalf of the American people, to assert control over water that 
originates and is used on NFS lands for multiple-use purposes, and to 
apply conditions of use to special use authorizations. Several county 
or regional commenters believed the proposed directive protected the 
long-term viability of skiing and winter sports in mountain communities 
that have tourism-based economies while preserving the economic 
viability of ski areas operating on Federal lands.
    Response: The Forest Service agrees with these comments.

Comments Generally Opposed to the Proposed Directive

    Comment: Several commenters representing the ski industry, other 
business interests, or water districts and municipalities were 
generally opposed to the proposed directive. The ski industry asserted 
that the proposed directive was a heavy-handed approach that would be 
counterproductive to the desire to maintain ski area uses over the long 
term. Additionally, some commenters stated that the proposed directive 
was overbroad and exceeded federal authority, particularly in regards 
to proposed Clause D-30. Some water districts or municipalities simply 
objected to the proposed directive as drafted and requested that it not 
be adopted or revised.
    Response: Several important substantive modifications have been 
made in the final directive in response to comments the Agency received 
on the proposed directive. The final directive does not insert the 
Forest Service into day-to-day management of ski areas water rights. 
Rather, the final directive takes the Forest Service out of day-to-day 
management of ski area water rights by providing for the holder to 
establish, acquire, maintain, and perfect original water rights. 
Specific comments and responses related to proposed Clause D-30 are 
contained herein.

General Comments

    Comment: One commenter suggested that the Federal Register notice 
for the final directive clarify that the Forest Service has not 
consistently required ski areas to acquire water rights in the name of 
the United States. This commenter believed that the Federal Register 
notice for the proposed directive was misleading in indicating that the 
proposed directive was a substantial change from prior policy.
    Response: While there may be examples of inconsistent application 
of prior policy, the Federal Register notice for the proposed directive 
correctly characterizes that policy.
    Comment: One commenter believed that the issues raised by the 
Agency could be addressed with existing mechanisms. This commenter 
requested that the Forest Service withdraw the proposed directive and 
consult with the States to address Forest Service participation in 
water allocation and management processes.
    Response: The Agency believes that the final directive is needed to 
address management of water resources on NFS lands and in particular to 
ensure that ski areas providing public services on NFS lands will have 
a sufficient quantity of water to operate. The Agency has made several 
significant changes to the proposed directive in response to comments 
received. The primary change with respect to ski area water rights is a 
shift in emphasis from non-severability to ensuring a sufficient 
quantity of water to operate the ski area. The Agency believes that the 
public comment period provided reasonable opportunity for States and 
others to provide input on the proposed directive. The proposed and 
final directives do not affect the States' role in allocating water 
rights in States that follow the prior appropriation doctrine.
    Comment: One commenter stated that the Federal Register notice for 
the proposed directive suggests that the Forest Service has had a 
uniform practice of administering special use permit clauses requiring 
the permit holder to acquire water rights in the name of the United 
States, but in many cases these clauses were not enforced. This 
commenter recommended clarifying in the final directive that the 
clauses in the final directive will displace all prior ski area water 
clauses, assuming that the Forest Service modifies the proposed 
directive to be acceptable as identified in the comments. Further, one 
commenter urged the Forest Service not to enforce prior ski area water 
clauses in prior or existing ski area permits.
    Another commenter submitted that there are probably many ski area 
permits that have no provision for United States ownership or control 
of water rights. This commenter believed that holders of those permits 
have little incentive to request inclusion of the

[[Page 81511]]

proposed clause in their permits. The commenter also noted that often 
when ski area permits are modified, the amendment addresses only the 
proposed change that triggered the amendment (e.g., expansion of the 
permit area). This commenter suggested that the Forest Service make a 
concerted effort to add the new clause to ski area permits when other 
modifications are made to the permits.
    Response: Per the instructions in the final directive, once the 
final directive goes into effect, clauses D-30 and D-31 supersede all 
previous ski area water rights clauses in the Directive System. When 
ski area permits are issued, reissued, or modified under 36 CFR 251.61 
to reflect new, changed, or additional uses or area, the appropriate 
new clause (D-30 or D-31) will be included in ski area permits, and any 
other water clauses in the permits will be removed.
    Holders of existing ski area permits that are not being reissued or 
modified under 36 CFR 251.61 may opt to amend their permit to include 
the appropriate new clause within one year of the effective date of the 
final directive, provided they:
    (1) Agree to have all water facilities on NFS lands that are used 
primarily for operation of the ski area and that are not authorized 
under a separate permit:
    (a) Authorized by their ski area permit;
    (b) designated on a map attached to the permit; and
    (c) included in an inventory in an appendix to the permit; and
    (2) submit documentation prepared by their qualified hydrologist or 
licensed engineer:
    (a) Demonstrating that they hold or can obtain a sufficient 
quantity of water to operate the permitted portion of the ski area; and
    (b) identifying all water sources, water rights, and water 
facilities necessary to demonstrate a sufficient quantity of water to 
operate the ski area, including all original water rights; all water 
facilities authorized by the ski area permit; and any existing 
restrictions on withdrawal or diversion of water that are required to 
comply with a statute or an involuntary court order that is binding on 
the Forest Service.
    These requirements, which are enumerated in paragraphs 1 and 2 of 
the instructions for clauses D-30 and D-31, must be met to implement 
the new clauses.
    Per National Ski Areas Association, Inc. v. United States Forest 
Service, 910 F. Supp. 2d 1269 (D. Colo. 2012), the 2011 and 2012 ski 
area water clauses in existing permits are not enforceable. However, 
previous water clauses in ski area permits are valid and enforceable as 
long as they remain in the permit.
    Comment: One commenter suggested that the Forest Service needs an 
effective tool to ensure ski area compliance with this directive. In 
this commenter's experience, ski area permit holders fight enforcement 
of even minor requirements that get in the way of the industry's 
development plans. This commenter noted that when a ski area signs a 
permit with the new water clause, the ski area must abide by that 
clause, as was the case with prior water clauses in ski area permits. 
The commenter further stated that the American public cannot afford 
future litigation on legal requirements that a ski area agrees to one 
day and disavows later.
    Response: The Agency agrees that the terms of a ski area permit 
executed by the holder are binding on the holder. When the appropriate 
water clause in the final directive is included in a ski area permit 
executed by the holder and the Forest Service, it will be binding on 
and enforceable against the holder.
    Comment: One commenter noted that the proposed directive would not 
change the Forest Service's policy on water rights for special uses 
other than ski areas. This commenter believed that the Forest Service 
would continue to take a possessory interest in water rights for other 
special uses, which would continue to affect municipal water providers, 
the agricultural and energy industries, and all other water users.
    Response: The proposed and final directives affect only ski area 
permits. Changes to water clauses for other special uses are outside 
the scope of the proposed and final directives. The possessory interest 
provision in Forest Service directives applies only to water rights for 
Forest Service programs administered on NFS lands, i.e., to permits 
where both the water facility and the water use are on NFS lands. 
Forest Service Manual (FSM) 2541.32, para. 2. The possessory interest 
provision does not apply to water rights held by municipal water 
providers and the agricultural and energy industries, since these water 
rights are not associated with both a water facility and water use on 
NFS lands. Likewise, the possessory interest provision does not apply 
to water rights held by other water users that are not associated with 
a point of diversion and water use on NFS lands.
    Comment: Commenters questioned the Agency's legal authority to 
manage water rights on NFS lands and included citations in support of 
this position. One commenter requested that the Forest Service 
specifically identify the statutory provisions granting the Agency 
authority to control water rights. Another commenter noted that 
Congress granted the Forest Service authority to permit the use of 
water rights on NFS lands, but not otherwise regulate them.
    Response: Prior appropriation doctrine States adjudicate and 
allocate water rights for all water users, including the Federal 
government. The Forest Service has the authority to manage use and 
occupancy of NFS lands, including use of NFS lands for ski areas. The 
Forest Service has broad authority to condition special use 
authorizations that allow use and occupancy of NFS lands, including the 
authority to put water clauses in permits to ensure sufficiency of 
water for authorized uses and to protect public property, public 
safety, and natural resources on NFS lands. The Agency cited numerous 
authorities in the Federal Register notice for the proposed directive 
and this Federal Register notice supporting this position. 79 FR 35516 
(June 23, 2014); 16 U.S.C. 481, 497, 497b, 529, 551; 43 U.S.C. 1765; 36 
CFR 251,56(a)(ii)(A), (a)(ii)(B), (a)(ii)(E), (a)(ii)(G).
    Comment: One commenter cited United States v. New Mexico for the 
proposition that there is no implied Forest Service reservation of 
water for secondary purposes and that the United States must acquire 
water rights in the same manner as any other public or private 
appropriator. Citing the Federal Task Force Report issued pursuant to 
section 389(d)(3) of Public Law 104-127, this commenter asserted that 
the Forest Service must attain the secondary purposes of the National 
Forests without interfering with the diversion, storage, and use of 
water for non-Federal purposes.
    Response: Ski area water rights do not qualify as reserved water 
rights. The Forest Service, like any other public or private party, 
must acquire water rights from prior appropriation doctrine States. 
These States adjudicate and allocate water rights, including water 
rights for the Federal government.

3. Response to Comments Relating to Specific Clauses

a. PRIOR APPROPRIATION DOCTRINE STATES--CLAUSE D-30

Proposed Instructions

    Only the first, second, fourth, and sixth paragraphs in the 
proposed instructions for clause D-30 received comment.

[[Page 81512]]

Proposed Paragraph 1

    Paragraph 1 of the proposed instructions provided that clause D-30 
supersedes all previous ski area water rights clauses in the Directive 
System. Paragraph 1 also provided that clause D-30 be included in ski 
area permits in prior appropriation doctrine States when these permits 
are issued, reissued, or modified under 36 CFR 251.61 and that clause 
D-30 not be included in Michigan, Vermont, and New Hampshire, which are 
riparian doctrine States.
    Comment: A concern was raised that because the instructions cited a 
specific version of the ski area permit and two specific interim 
directives, the new clause would be used only in permits with these 
versions of the water rights clause, rather than in all new or modified 
ski area permits.
    Response: It was not the Agency's intent to limit the new clauses 
to permits containing these versions of prior clauses. To clarify this 
intent, the Agency has removed these references from paragraph 1 of the 
instructions in the final directive.

Proposed Paragraph 2

    The second paragraph of the proposed instructions for clause D-30 
provided that before issuing a new or modified ski area permit in a 
prior appropriation doctrine State, the authorized officer would have 
to (1) ensure that the holder is in compliance with all water facility 
and water use requirements in clause D-30; (2) inventory ski area water 
rights; (3) classify the ski area's water rights consistent with the 
tables in clause D-30; and (4) ensure that the water rights inventory 
in paragraph 8 of clause D-30 is approved in writing by the Regional 
Forester.
    Comment: There was a general concern regarding the increased 
magnitude of work involved in implementing these instructions. One 
commenter suggested that it is unnecessary for Regional Foresters to 
approve water rights inventories in writing.
    Response: The Agency agrees with the concern regarding the 
potential magnitude of work involved in implementing these 
instructions. Therefore, the Agency has revised paragraph 2 of the 
instructions for clause D-30 in the final directive to address 
authorization of water facilities that are used primarily for operation 
of the ski area under the ski area permit and designation of those 
water facilities on a map. Additionally, the inventory in this 
paragraph is limited to water facilities on NFS lands that are used 
primarily for operation of the ski area and that are authorized by this 
permit. The final directive recognizes that there may be existing water 
facilities used primarily for operation of the ski area that are 
authorized by a separate, valid special use permit and that those water 
facilities may remain under that separate authorization, including upon 
reissuance, if eligible. The Forest Service will determine eligibility 
based on the primary use of that water facility and applicable 
statutory authority at the time of reissuance.
    The Agency has added a provision to the instructions requiring the 
applicant for a new or modified ski area permit to submit documentation 
prepared by the applicant's qualified hydrologist or licensed engineer 
demonstrating that the applicant holds or can obtain a sufficient 
quantity of water to operate the permitted portion of the ski area. The 
documentation submitted must identify all water sources, water rights, 
and water facilities necessary to demonstrate a sufficient quantity of 
water to operate the ski area, including all original water rights; all 
water facilities to be authorized by the ski area permit; and any 
existing restrictions on withdrawal or diversion of water that are 
required to comply with a statute or an involuntary court order that is 
binding on the Forest Service. This provision is consistent with the 
conceptual shift in the final directive from non-severability of ski 
area water rights to sufficiency of water to operate the ski area.
    The Agency agrees that it is unnecessary for Regional Foresters to 
approve inventories in writing and therefore has removed that 
requirement from the instructions in the final directive.

Proposed Paragraph 4

    Paragraph 4 of the proposed instructions for clause D-30 provided 
that only water facilities and water rights that are necessary for and 
that primarily support operation of the ski area being authorized may 
be included in the ski area permit. Comments received on the terms 
``necessary'' and ``primarily support'' are addressed in the response 
to comments on proposed paragraph F. The standard for determining which 
water facilities should be included under a ski area permit is 
addressed in the response to comments on proposed paragraph F.1.d.

Proposed Paragraph 6

    Paragraph 6 of the proposed instructions for clause D-30 provided 
that, prior to authorizing a permit amendment for a new water facility 
at a ski area, the authorized officer would have to ensure that 
sufficient water is available to operate the water facility. The 
comments received on the standard for determining sufficiency of water 
in this context are addressed in the response to comments on proposed 
paragraph F.
    The remaining paragraphs in the proposed instructions for clause D-
30 (paragraphs 3, 5, and 7) did not receive specific comment.

Proposed Paragraph F--Water Facilities and Water Rights

    Proposed paragraph F provided that ``necessary,'' in relation to a 
water facility or water right, means that without that water facility 
or water right, the ski area would not be able to operate. Proposed 
paragraph F provided that ``primarily supports'' in relation to a water 
facility or water right means that the water facility or water right 
serves the ski area improvements on NFS lands significantly more than 
any other use.
    Comment: Several commenters believed that the definitions of 
``necessary'' and ``primarily supports'' in the proposed clause were so 
broad that they could include water rights located off NFS lands used 
to support the operation of ski area improvements and could even 
include the water rights of municipal water providers that are used in 
connection with ski areas. These commenters believed such expansive 
coverage overreaches and should be narrowed to apply only to water 
rights that are necessary for operation of a ski area and to exclude 
any other water rights, such as water rights on non-NFS lands or water 
acquired from municipalities. Additionally, some commenters stated 
that, as proposed, the term ``necessary'' implied a determination of 
whether an individual water right or water facility is essential to the 
viability of the entire ski area. There was a concern that if 
considered individually, a water right might not be deemed necessary, 
whereas in total, a ski area's portfolio of water rights would be 
necessary for operation of the ski area. Several commenters recommended 
either redefining ``necessary'' to recognize the cumulative necessity 
of water rights or deleting the term ``necessary'' because the term 
``primarily supports'' is adequate.
    Some commenters stated that to determine whether a water right 
``primarily supports'' a ski area, a comparison would be made between 
water associated with a ski area use and any other use. Since water at 
ski areas is used for a wide assortment of purposes, these commenters 
believed it would be difficult to determine whether

[[Page 81513]]

the water primarily supports a ski area. For example, water may be used 
inside or outside the ski area permit boundary on either NFS or private 
land for condominiums, golf courses, retail shops, and restaurants. 
These commenters also believed it would be difficult to determine 
whether a particular water right ``primarily supports'' ski area use 
because there are seasonal changes in the use of a particular water 
right. For example, snowmaking in the winter may change to golf course 
irrigation in the summer.
    Commenters noted that the amount of necessary water for a ski area 
is dynamic and that permit holders need flexibility to manage their 
water rights in the best interest of ski areas. Another commenter noted 
that there is variability from year to year as well as over the 40-year 
term of a ski area permit in the amount of water that is necessary to 
operate a ski area. These variations may be due to the amount of 
natural snowfall, levels of visitation, increases in snowmaking 
efficiency or other operational and technical advances in the use of 
water, availability of water based on seniority in appropriation, and 
changes in climate. This commenter stated that all these variables can 
result in decreases or increases in the amount of water necessary to 
support ski area operations.
    One commenter stated that the proposed definition of ``necessary'' 
in paragraph F is too narrow because many water rights are important to 
the planned and approved operation of the ski area. According to this 
commenter, the ski area could still operate with a reduced level of 
service or quality of skiing experience in their absence. For example, 
the partial loss of snowmaking water supply during one year might not 
result in closing the ski area, but those snowmaking water rights 
should nonetheless be protected under the new clause. This commenter 
believed that, under the proposed directive, a ``necessary'' water 
facility or water right would be subject to the new clause only if it 
also ``primarily supports'' the ski area operation.
    Another commenter believed that the combination of ``necessary'' 
and ``primarily supports'' was problematic and that a particular water 
right serving multiple purposes, such as domestic uses for condominiums 
and commercial operations at the base of a ski area and snowmaking 
inside the permit boundary, should not result in the exclusion of the 
entire water right from the protections of the new clause.
    One commenter expressed concern that the term ``sufficient water'' 
was not defined, which would create ambiguity for States and permit 
holders. This commenter sought clarity as to whether water associated 
with water rights and water facilities that are ``necessary for'' and 
that ``primarily support'' a ski area would be deemed sufficient. 
Commenters requested that the Forest Service provide reasonable 
criteria and guidance for determining sufficiency of water for ski area 
operations because the concept is complex and could involve detailed 
hydrological analysis and projections of future climatic conditions. 
Commenters believed that establishing criteria would avoid disputes, 
unreasonable expense, and delay.
    One commenter asserted that with respect to existing water rights, 
a water court has already determined sufficiency of water for ski area 
operations and approved water use for ski area purposes. This commenter 
encouraged Forest Service recognition of the water court's or State 
engineer's determinations of sufficiency of water and appropriateness 
of water use and acceptance of these findings. This commenter noted 
that the permit holder's water rights may be used at a ski area or they 
may be used at the holder's discretion to supply water for other 
purposes, provided that sufficient water remains to operate the ski 
area.
    One commenter observed that the requirement for sufficient water to 
be available is an important tool for the Forest Service to determine 
whether new water facilities, such as snowmaking systems, will be able 
to operate in dry years. However, this requirement may not ensure that 
sufficient water is available to operate in dry years in every case, 
for example, where the facility is served by water diverted from a 
location off NFS lands. This commenter also stated that, as proposed, 
this requirement did not explicitly apply to the issuance of a permit, 
which would present an important opportunity to conduct a sufficiency 
analysis.
    Another commenter was concerned that ensuring sufficient water to 
operate the ski area could conceivably dry up a stream and negatively 
affect flow-dependent resources and aquatic organisms, especially when 
water is withdrawn during low-flow periods in winter. This commenter 
recommended amending the second-to-last paragraph of the instructions 
to address the requirements of streamflow-dependent resources.
    Response: The Agency agrees that the amount of water necessary to 
operate a ski area may fluctuate from year to year and that the 
proposed definition of the term ``necessary'' is problematic. The 
Agency has removed the term ``necessary'' from the final directive. The 
Agency has changed the phrase ``primarily supports'' to the phrase 
``used primarily for operation of the ski area.'' In relation to a 
water facility or water right, ``used primarily for operation of the 
ski area'' means that the water facility or water right provides 
significantly more water for operation of the permitted portion of the 
ski area than for any other use. Water facilities and water rights that 
are used primarily for operation of a ski area are relevant to the 
provisions of the new clauses, including those that address sufficiency 
of water for ski area operations.
    In addition, the Agency has added a definition for the term 
``sufficient quantity of water to operate the ski area.'' This term 
means that under typical conditions, taking into account fluctuations 
in utilization of the authorized improvements, fluctuations in weather 
and climate, changes in technology, and other factors deemed 
appropriate by the applicant's qualified hydrologist or licensed 
engineer, the applicant has sufficient water rights or access to a 
sufficient quantity of water to operate the permitted facilities, and 
to provide for the associated activities authorized under the ski area 
permit in accordance with the approved operating plan. This new term 
and definition are consistent with the shift from non-severability of 
water rights to sufficiency of water to operate the ski area. The 
definition recognizes that the quanity of water is not static and 
allows for appropriate factors to be considered in the sufficiency 
determination. Before issuance of a new or modified ski area permit, 
applicants will be required to submit documentation demonstrating that 
they hold or can obtain a sufficient quantity of water to operate the 
permitted portion of the ski area. The submitted documentation will 
identify any existing restrictions on withdrawal or diversion of water 
that are required to comply with a statute or an involuntary court 
order that is binding on the Forest Service. Addressing streamflow-
dependent resources generally is beyond the scope of this directive.

Proposed Paragraph F.1--Water Facilities

Proposed Paragraph F.1.a

    This provision defined the term ``water facility'' to mean a ditch, 
pipeline, reservoir, well, tank, spring, seepage, or any other facility 
or feature that withdraws, stores, or distributes water.

[[Page 81514]]

    Comment: Several commenters opined that the definition of ``water 
facility'' in the proposed directive was not limited to facilities 
located on NFS lands and should be narrowed to apply only to those 
facilities.
    Response: The Agency has revised the definition of ``water 
facility'' in the final directive to clarify its scope. The definition 
in the final directive references only human-made features and removes 
references to natural features such as springs and seeps. In addition, 
the Agency has added the following definition for ``ski area water 
facility'' in the final directive: ``Any water facility on NFS lands 
that is authorized by this permit and used primarily for operation of 
the ski area authorized by this permit.'' This definition clarifies 
that only water facilities that are used primarily for operation of a 
ski area may be authorized by the ski area permit. The Forest Service 
does not authorize water facilities located on non-NFS lands.

Proposed Paragraph F.1.b

    This proposed provision stated that no water facility for which the 
point of withdrawal, storage, or distribution is on NFS lands may be 
initiated, developed, certified, permitted, or adjudicated by the 
holder unless expressly authorized by a special use authorization.
    Comment: One commenter believed that proposed paragraph F.1.b would 
provide for total Forest Service control over the adjudication, 
operation, and transfer of surface water and groundwater rights on NFS 
lands and that the requirement for Forest Service permission for slight 
changes to those water rights would constitute a taking of private 
property in contravention of State water law, direction from Congress, 
and U.S. Supreme Court rulings. Another commenter alleged that a water 
right appropriator does not need a landowner's permission to adjudicate 
water rights on the landowner's lands. Yet another commenter questioned 
the need for and the Agency's authority to require authorization prior 
to initiation or adjudication of water rights associated with a water 
facility on NFS lands. This commenter observed that it is common 
practice for water users to appropriate and adjudicate water rights on 
Federal land prior to obtaining a special use permit. One commenter 
observed that the Forest Service can impose reasonable conditions on 
the development of water rights located on NFS lands through its 
special use permit process when facilities to access those water rights 
are developed, but not when the water rights are acquired.
    Additionally, a commenter was concerned that the proposed 
restrictions on taking action regarding water facilities on NFS lands 
without a special use authorization would apply to water facilities 
that do not primarily support a ski area. One commenter observed that 
the proposed restrictions would affect diversions of water off NFS 
lands and would limit exercise of the associated water rights. A 
commenter also expressed concern that the permitting process can take a 
considerable amount of time, during which the priority date, and 
therefore the value of the water right, would be in jeopardy.
    One commenter recommended limiting paragraph F.1.b to construction 
of water facilities on NFS lands and deleting the reference to 
``initiation, permitting, or adjudication of water rights on NFS 
lands.'' Others suggested that the provision be revised to clarify that 
the appropriation and adjudication of a water right for ski area 
operations on NFS lands are subject to State law and are not pre-
conditioned on the existence of Forest Service permission because the 
Forest Service has agreed to be bound by State water law.
    Response: The Forest Service agrees that proposed paragraph F.1.b 
to a certain degree conflates acquisition of water rights from the 
State with Forest Service authorization of water facilities on NFS 
lands. In addition, paragraph F.1.b is unnecessary to the extent it 
provides that water facilities on NFS lands must be authorized by a 
special use authorization, as this requirement is already stated in 
applicable Forest Service regulations. Therefore, the Agency has 
removed proposed paragraph F.1.b from the final directive.

Proposed Paragraph F.1.c

    Proposed paragraph F.1.c provided that the United States may place 
any conditions on installation, operation, maintenance, and removal of 
any water facility that are deemed necessary by the United States to 
protect public property, public safety, and natural resources on NFS 
lands. Numerous comments were received on this provision.
    Comment: Some commenters interpreted proposed paragraph F.1.c as a 
mechanism for the Forest Service to manage water use and water rights 
on NFS lands. These commenters noted that the Agency's authority to 
condition special use authorizations is not limitless, and that while 
the National Forest Ski Area Permit Act allows the Secretary to make 
permit changes from time to time, those changes must be in accordance 
with applicable law. These commenters recommended that proposed 
paragraph F.1.c be revised to add ``in accordance with applicable 
laws.''
    Another commenter observed that when the Forest Service has raised 
the possibility of imposing a bypass flow on an existing water 
facility, a solution has been negotiated that protects both the water 
user who is seeking approval to use Federal land and the national 
objectives and interests of taxpayers. This commenter observed that the 
proposed directive provides flexibility and represents a rededication 
and commitment to common-sense water policies on Federal lands without 
jeopardizing the legitimate interests of taxpayers, ordinary citizens 
who use and enjoy those lands, or corporate permit applicants like ski 
areas. Additionally, this commenter observed that regardless of 
disagreement over the Forest Service authority to impose bypass flow 
requirements, many water rights holders with water facilities on NFS 
lands have found innovative ways to accommodate their water rights 
while meeting the water needs of other forest resources. The commenter 
credited the Forest Service with showing a growing willingness to 
accept workable alternatives to the imposition of bypass flow 
conditions.
    Several commenters favored the ability granted by proposed 
paragraph F.1.c to condition use of water facilities on NFS lands to 
protect aquatic and other environmental resources (e.g., by imposing 
bypass flow requirements). These commenters believed that the Agency 
has the legal authority and the legal obligation to do so and that 
failure to do so could expose the United States to substantial 
litigation risk. Other commenters noted that in some cases, the 
imposition of certain conditions such as bypass flow requirements may 
be the only practical way to protect environmental resources. 
Commenters cited State and Federal cases and Federal statutes in 
support of their position.
    Some commenters were concerned generally about environmental and 
social impacts associated with ski area water rights. One commenter 
requested that the Forest Service first determine how much water is 
needed to meet public purposes, such as instream flows for aquatic 
life, the movement of wood and sediment through the stream system, and 
seasonal inundation of floodplains, before allowing ski areas to divert 
and appropriate water. Another commenter requested that the Forest 
Service ensure that the proposed directive protect all public rights 
and interests in water on NFS lands, including Federal reserved water 
rights that date back to the establishment of

[[Page 81515]]

the national forest reserves. This commenter wanted the Forest Service 
to compensate for impacts on flows due to climate change, such as 
impacts from rain on snow, by protecting flows during critical periods 
and avoiding activities that would increase peak flows. This commenter 
also recommended evaluating snowmaking practices to ensure that 
hydrology, peak flows, and water quality are not adversely affected.
    Response: The Agency has modified proposed paragraph F.1.c in the 
final directive. The first sentence of paragraph F.1.c in the final 
directive provides that the authorized officer may place conditions, as 
necessary to protect public property, public safety, and natural 
resources on NFS lands, on the installation, operation, maintenance, 
and removal of any water facility, but only in accordance with 
applicable law. The Forest Service recognizes that its actions must be 
in accordance with applicable law and that the Agency has authority 
under applicable law to condition special use authorizations that allow 
use and occupancy of NFS lands to protect public property, public 
safety, and natural resources on NFS lands.
    The second sentence of paragraph F.1.c in the final directive 
states that clause D-30 does not expand or contract the Agency's 
authority to place conditions on the installation, operation, 
maintenance, and removal of water facilities at issuance or reissuance 
of the permit, throughout the permit term, or otherwise. Thus, clause 
D-30 does not affect the Agency's authority to place conditions on 
water facilities under existing legal authority.
    The third sentence of paragraph F.1.c in the final directive states 
that the holder must comply with present and future laws, regulations 
and other legal requirements in accordance with section I of the ski 
area permit. This provision reinforces existing provisions in the ski 
area permit that provide protection for natural resources in connection 
with water facilities.
    In response to concerns regarding environmental impacts associated 
with water facilities, the sufficiency documentation an applicant must 
submit before receiving a new or modified ski area permit must include 
any existing restrictions on withdrawal or diversion of water that are 
required to comply with a statute or an involuntary court order that is 
binding on the Forest Service. The Forest Service conducts 
environmental analysis, as appropriate, on a site-specific basis of the 
effects of water facilities on NFS lands. This type of site-specific 
analysis is beyond the scope of this notice of final directive.

Proposed Paragraph F.1.d

    Proposed paragraph F.1.d provided that only water facilities that 
are necessary for and that primarily support operation of a ski area 
may be authorized by a ski area permit.
    Comment: One commenter recommended that proposed paragraph F.1.d 
provide examples of what is and what is not considered necessary for 
ski area operations. This commenter suggested that snowmaking and on-
mountain restaurant uses may be necessary for ski area operations, but 
that base area water needs for condominiums, golf courses, and other 
uses not authorized by the ski area permit should not be considered 
necessary for ski area operations.
    One commenter believed this provision would impose unreasonable 
limitations on water facilities within the permit boundary. This 
commenter stated that ``necessary'' as proposed in paragraph F.1.d 
would impose an unreasonably high threshold and would include only 
facilities that are ``mission-critical,'' would create confusion at the 
field level, and would invite controversy and possibly third-party 
challenges regarding whether a proposed water facility met the 
applicable standard.
    Response: The Agency agrees that the term ``necessary'' is not 
needed. The Agency has removed the term ``necessary'' from paragraph 
F.1.d in the final directive and has revised this provision to clarify 
that only water facilities which are on NFS lands and are used 
primarily for operation of the ski area may be authorized by the ski 
area permit.

Proposed Paragraph F.1.e

    Proposed paragraph F.1.e provided that any change in the water 
facilities authorized by the permit would result in termination of the 
authorization for those water facilities, unless the change was 
expressly authorized by a permit amendment. Examples of changes to 
water facilities included (1) use of the water in a manner that does 
not primarily support operation of the ski area authorized by this 
permit; (2) a change in the ownership of associated water rights; or 
(3) a change in the beneficial use, location, or season of use of the 
water.
    Comment: One commenter raised a concern that if unauthorized 
changes to water facilities resulted in termination of the 
authorization, it would create an incentive for the holder not to make 
changes to water facilities that should be made. This commenter also 
observed that if the penalty for a violation is merely the loss of the 
right to use the water facility, the holder may abandon a water 
facility even if it is essential to providing the current level of 
public service. Other commenters asserted that restrictions on the 
ability to make changes to water facilities per paragraph F.1.e would 
impede the holder's ability to maximize the value and utility of the 
associated water right and would undercut the Agency's interest in 
sustaining ski area operations.
    One commenter observed that proposed paragraph F.1.e does not 
clearly identify the types of actions that are prohibited without 
authorization and recommended specifically listing all changes to a 
water facility that, if not authorized by a permit amendment, would 
trigger termination of authorization for the water facility. Similarly, 
another commenter observed that it would be difficult to determine 
consistently which modifications require approval because States define 
water rights broadly and do not assign a percentage of the total water 
right dedicated to each use. This commenter noted that the purposes of 
a ski area water right might simply be listed as ``commercial or 
domestic'' or ``irrigation, domestic water for condominiums and homes, 
restaurants, and snowmaking,'' and the amount of water a ski area uses 
for each purpose could change.
    Another commenter raised a concern that this clause would impose an 
undue burden on permit holders by placing restrictions on holders' 
ability to obtain, develop, maintain, or enhance water rights and thus 
would create additional impediments to the development of water 
resources to support permitted ski areas. Additionally, this commenter 
noted that the requirement for Forest Service approval of changes would 
delay compliance with State deadlines and could result in the 
forfeiture of water rights or impairment of their value.
    Response: The Agency agrees that clarification is needed regarding 
the types of changes to water facilities that, if not authorized by a 
permit amendment, will result in termination of authorization of the 
water facilities under the ski area permit. In contrast to proposed 
paragraph F.1.e, which provided that any unauthorized change to water 
facilities would result in termination of their authorization under the 
ski area permit, paragraph F.1.e in the final directive provides that 
if, due to a change, a ski area water facility will primarily be used 
for purposes other than operation of the ski area,

[[Page 81516]]

authorization for that water facility under the ski area permit will 
terminate. Paragraph F.1.e in the final directive gives examples of the 
types of changes to water facilities that would result in their being 
used primarily for purposes other than operation of the ski area. These 
examples include a change in the ownership of the water facility or the 
associated water rights or a change in the beneficial use, location, or 
season of use of the water. Other changes to ski area water facilities 
could also result in their ceasing to be used primarily for operation 
of the ski area.

Proposed Paragraph F.1.f

    Proposed paragraph F.1.f provided that the holder must obtain a 
separate special use authorization to initiate, develop, certify, or 
adjudicate any water facility on NFS lands that does not primarily 
support operation of the ski area authorized by the ski area permit.
    Comment: One commenter observed that water right adjudications do 
not require prior permission from the owner of the land on which the 
point of diversion will be located. This commenter stated that the 
Forest Service has agreed to be bound by State law and has no authority 
to use the requirement for a new special use authorization to 
adjudicate water rights on NFS lands.
    One commenter was concerned that if a separate permit is required 
for water facilities on NFS lands that do not primarily support 
operation of the ski area, that permit would include water clauses for 
other special uses, which the commenter believed require transfer of 
water rights to the United States, or would provide for claiming a 
possessory interest in water rights in the name of the United States, 
consistent with FSM 2541.32. This commenter believed that Agency 
testimony before Congress is inconsistent with claiming a possessory 
interest in ski area water rights as provided in FSM 2541.32 and that 
the Agency should clarify in the final directive that it will not 
require ski areas to transfer ownership of water rights to the United 
States in any separate permit for water facilities on NFS lands that do 
not primarily support operation of a ski area.
    Response: The Agency has revised proposed paragraph F.1.f and 
consolidated it with paragraph F.1.e in the final directive. Paragraph 
F.1.e in the final directive provides that when authorization for a 
water facility under the ski area permit terminates because a change in 
the water facility results in its ceasing to be used primarily for 
operation of the ski area, a separate special use authorization is 
required to operate that water facility or to develop a new water 
facility, unless the holder has a valid existing right for the water 
facility to be situated on NFS lands. A valid existing right in this 
context is a legal right, typically a statutory right, to use and 
occupy NFS lands. In the absence of a valid existing right, a separate 
special use authorization is required under these circumstances because 
it is not appropriate to utilize the National Forest Ski Area Permit 
Act to authorize water facilities that do not primarily support 
operation of a ski area. 16 U.S.C. 497b(a), (b). Paragraph F.1.e in the 
final directive also provides that unless the holder has a valid 
existing right for the water facility to be situated on NFS lands, if 
the holder does not obtain a separate special use authorization for 
these water facilities, the holder must remove them from NFS lands.
    The Forest Service agrees that it is inappropriate to use the words 
``initiate,'' ``develop,'' ``certify,'' or ``adjudicate'' in connection 
with proper authorization of a new water facility and has removed these 
words from paragraph F.1.e in the final directive. However, it would be 
prudent for the permit holder to communicate with the Forest Service 
regarding the likelihood of approval of a proposed water facility, 
regardless of whether it is used primarily for operation of the ski 
area, before incurring expenses in acquiring associated water rights.
    Neither the proposed nor the final directive provides for the 
United States to claim a possessory interest in ski area water rights. 
The instructions for clauses D-30 and D-31 provide that the possessory 
interest policy in FSM 2541.32, paragraph 2, will not apply to ski area 
permits. Moreover, under paragraph F.1.e in the final directive, when 
the water facilities continue to support approved ski area operations 
at any time of year, the separate permit will not contain the 
possessory interest provision, any waiver provision, or any power of 
attorney provision. The Agency will develop new or modified water 
clauses for these permits.

Proposed Paragraph F.1.g

    Proposed paragraph F.1.g provided for documentation of restrictions 
on withdrawal and use of water that are required by regulation or 
policy, an adjudication, or a settlement agreement or that are based on 
a decision document supported by environmental analysis.
    Comment: Commenters opined that proposed paragraph F.1.g is very 
broad and would allow the Forest Service to limit the exercise of 
privately held water rights established under State law by unilaterally 
imposing restrictions without statutory or regulatory authority. 
Specifically, these commenters were concerned that a single ski area 
permit administrator could determine that a regulation or policy 
requires restrictions on withdrawals and impose those limits under the 
permit; that Forest Service staff is not qualified to interpret the 
regulations of other Federal and State agencies; that restrictions 
could be based on any settlement agreement with any party on any 
subject matter, regardless of whether the holder of the water right was 
a party or had notice and regardless of whether the Forest Service was 
a party to that settlement agreement; that restrictions based on a 
decision document supported by environmental analysis would not be 
limited to decision documents prepared by the Forest Service and might 
include past or future critical habitat designations for aquatic 
species made by the U.S. Fish and Wildlife Service; and that allowing 
restriction of water rights ``based on'' environmental documents would 
leave too much discretion to the permit administrator. One commenter 
believed that proposed paragraph F.1.g did not accomplish the stated 
objective in the Federal Register notice for the proposed directive of 
ensuring the availability of water resources for ski areas and 
recommended deleting proposed paragraph F.1.g.
    Response: The Agency believes that it is important to document 
existing restrictions on withdrawal and use of water from the permitted 
NFS lands so that permit administrators can ensure that these legal 
requirements are met during the typically 40-year term of the permit. 
However, the Agency agrees that the scope of the restrictions should be 
limited to those that are legally required and that it would be more 
appropriate to include the requirement in the instructions for the new 
water clauses. Consequently, the instructions for the new water clauses 
in the final directive require the documentation of a sufficient 
quantity of water submitted by an applicant prior to issuance of a new 
or modified ski area permit to identify any existing restrictions on 
withdrawal or diversion of water that are required to comply with a 
statute or an involuntary court order that is binding on the Forest 
Service. Additionally, the Agency has removed the table in the water 
clause appendix on restrictions on withdrawal and use of water, since 
that information will be

[[Page 81517]]

contained in the sufficiency documentation.

Proposed Paragraph F.2--Water Rights

    Proposed paragraph F.2 defined the term ``water right'' to mean a 
right to use water that is recognized under State law under the prior 
appropriation doctrine. Additionally, proposed paragraph F.2 provided 
that the permit does not confer any water rights.
    Comment: One commenter recommended that the term ``water right'' be 
defined in a way that could be consistently applied, regardless of 
State definitions and processes. This commenter noted that in Colorado 
a conditional water decree or right establishes a priority date for the 
possible future grant of an absolute water right. In Colorado, an 
individual or entity can ``use'' a water right only when that 
individual or entity has put the water to beneficial use and has been 
granted an absolute water right. Treating a conditional water right as 
a water right in the proposed directive would in many respects be like 
treating an application as a water right in other prior appropriation 
doctrine States.
    Response: The Forest Service believes that the definition of 
``water right'' in the proposed directive is appropriate. The 
definition should encompass any water right that is recognized under 
State law, including conditional water rights in the State of Colorado. 
The Agency has not changed the proposed definition of ``water right'' 
in the final directive.

Proposed Paragraph F.3--Acquisition and Maintenance of Water Rights 
Proposed Paragraph F.3.a

    This proposed paragraph defined ``NFS ski area water right'' to 
mean ``any water right acquired by the holder or a prior holder that is 
for water facilities that would divert or pump water from sources 
located on NFS lands, either inside or outside the permit boundary, for 
use that primarily supports operation of the ski area authorized by 
this permit.''
    Comment: Commenters objected to the term ``NFS ski area water 
right'' on the grounds that it implies that these water rights belong 
to the United States; that the water rights are appurtenant to NFS 
lands; and that the Forest Service, rather than the State, grants the 
water rights. These commenters also objected to the term on the grounds 
that it could include water rights that may be unnecessary for ski area 
operations and recommended that the definition be revised to apply only 
to water rights that are necessary for ski area operations. It was also 
recommended that ``NFS'' be removed from the term.
    Response: The Agency agrees that ``NFS'' is unnecessary in the term 
``ski area water right'' and may lead to confusion. Consequently, the 
Agency has removed ``NFS'' from that term in the final directive and 
has simplified the definition to include any water right for use of 
water from a point of diversion on NFS lands, either inside or outside 
the permit boundary, that is primarily for operation of the ski area.
    In addition, the Agency has added terms and definitions for two 
categories of ski area water rights: ``original'' water rights and 
``acquired'' water rights. Using these terms of art simplifies the 
wording in subsequent clauses that differentiate between these two 
types of ski area water rights. An ``original water right'' is defined 
as ``any existing or new ski area water right with a point of diversion 
that was or is, at all times during its use, located within the permit 
boundary for this ski area and originally established under State law 
through an application for a decree to State water court, permitting, 
beneficial use, or otherwise recognized method of establishing a new 
water right, in each case by the holder or a prior holder of the ski 
area permit.'' The definition further clarifies that an original water 
right cannot become an acquired water right by virtue of sale of the 
water right to a subsequent ski area permit holder.
    An ``acquired water right'' is defined as ``any ski area water 
right that is purchased, bartered, exchanged, leased, or contracted by 
the holder or by any prior holder.'' The distinguishing characteristics 
between these two types of ski area water rights is whether they were 
originally acquired from the State by a ski area permit holder to be 
used primarily for the operation of the ski area within the ski area 
permit boundary.
    Comment: One commenter suggested that the definition for ``NFS ski 
area water right'' be revised to limit its applicability to the 
holder's interest in water facilities and water rights because it may 
be only a partial interest. Another commenter believed that water 
rights that would not constitute NFS ski area water rights, such as 
water rights that are used for ski area purposes but arise from a point 
of diversion on private land, could still be affected by the proposed 
directive. As an example, this commenter cited an unauthorized change 
in ownership of a snowmaking pipeline diverting water from a stream on 
private land to the permitted ski area on NFS lands, which could result 
in termination of authorization for that water facility. Not having 
authorization for use of the water facility would in turn limit 
exercise of the associated water right.
    One commenter wanted to know the reason for treating water rights 
that arise from a point of diversion on NFS lands differently from 
water rights that arise from a point of diversion off NFS lands. This 
commenter also requested consideration of alternatives that would 
provide protection of all ski area water rights, regardless of land 
ownership at the point of diversion. Another commenter requested that 
further consideration be given to the effectiveness of the proposed 
directive in accomplishing its underlying policy objectives with 
respect to water rights for water that is stored, diverted, or pumped 
on non-NFS lands to support authorized ski area facilities within the 
permit area.
    Response: Water rights that are used for ski area purposes but 
arise from a point of diversion located on non-NFS lands are not 
affected by this final directive. Consistent with the definition for 
``ski area water right'' in the final directive, which applies to water 
rights that are used primarily for operation of the ski area and that 
arise from a point of diversion located on NFS lands, only water 
facilities on NFS lands that are used primarily for operation of the 
ski area may be authorized under the ski area permit. The Forest 
Service does not authorize water facilities located on non-NFS lands. 
Therefore, in the example cited by the commenter, there would be no 
Forest Service permit, the water facility would not be subject to 
permit terms addressing change in ownership of the water facility, and 
there would be no effect on exercise of associated water rights.

Proposed Paragraph F.3.b

    Proposed paragraph F.3.b provided that NFS ski area water rights 
must be acquired in accordance with applicable State law; that the 
holder must maintain NFS ski area water rights, including Federally 
owned NFS ski area water rights, for the term of the permit, as well as 
for the term of any subsequent permits that may be issued to the holder 
for the uses authorized by the permit; that the holder is responsible 
for submitting any applications or other filings that are necessary to 
protect those water rights in accordance with State law; and that the 
holder and not the United States must bear the cost of acquiring, 
maintaining, and perfecting NFS ski area water rights, including 
Federally owned NFS ski area water rights.
    Comment: Some commenters sought clarity on what it means to 
``maintain''

[[Page 81518]]

NFS ski area water rights. One commenter suggested that the term 
``maintain'' lends itself to water facilities but is unclear as applied 
to water rights. Some commenters asked whether voluntary or court-
ordered surrender of part of a conditional water right would constitute 
a failure to maintain the water right under proposed paragraph F.3.b. 
Some commenters asked whether loss of a water right due to failure to 
maintain it would trigger termination of the permit per proposed 
paragraph F.1.e.
    Response: Voluntary or court-ordered surrender of part of a 
conditional water right would not constitute a failure to maintain the 
water right. Maintaining a water right means exercising due diligence 
to preserve it in accordance with applicable State law, including 
submitting required filings. The holder, rather than the Forest 
Service, is responsible for submitting applications or other filings 
that are necessary to maintain ski area water rights and for the cost 
of those filings. The Agency has redesignated proposed paragraph F.3.b 
as paragraph F.3.c in the final directive and simplified it to provide 
that the holder shall bear the cost of establishing, acquiring, 
maintaining, and perfecting original water rights, including any 
original water rights owned solely or jointly by the United States. 
Loss of a water right due to failure to maintain it will trigger 
termination of authorization of the associated water facility under the 
ski area permit (not termination of the ski area permit) under 
paragraph F.1.e in the final directive only if the associated water 
facility ceases to be used primarily for operation of the ski area.
    Comment: Several commenters requested clarification that proposed 
paragraph F.3.b would not apply to third-party water rights, such as 
water rights leased from municipalities, that are used in connection 
with a ski area or that are located on NFS lands.
    Response: Paragraph F.3.b in the proposed directive has been moved 
to paragraph F.3.c in the final directive and has been clarified so 
that it will not apply to water rights leased from third parties and 
other acquired water rights as defined in the final directive. 
Paragraph F.3.c in the final directive applies only to original water 
rights as defined in the final directive, including those owned solely 
or jointly by the United States.
    Comment: One respondent believed that the requirement to maintain 
NFS ski area water rights would unlawfully insert the Forest Service 
into the day-to-day management of ski area water rights.
    Response: Paragraph F.3.c in the final directive does not insert 
the Forest Service into day-to-day management of ski areas water 
rights. Rather, this paragraph takes the Forest Service out of day-to-
day management of ski area water rights by providing for the holder to 
establish, acquire, maintain, and perfect original water rights.

New Paragraph F.3.b

    The Agency has added a new paragraph F.3.b in the final directive. 
This new provision requires that an inventory of all ski area water 
facilities and original water rights be included in an appendix to the 
ski area permit and that the inventory be updated by the holder upon 
reissuance of the permit, installation or removal of a ski area water 
facility, when a listed ski area water facility is no longer authorized 
by the ski area permit, or when an original water right is no longer 
used for operation of the ski area. This new paragraph is needed to 
administer the requirements in the new water clauses regarding ski area 
water facilities and original water rights.

Proposed Paragraph F.3.c

    Proposed paragraph F.3.c provided that NFS ski area water rights 
that are jointly or solely owned by the United States must remain in 
Federal ownership; that if the holder's ski area permit utilizes NFS 
ski area water rights acquired in the name of or transferred to the 
United States or held jointly with the United States, the holder must 
submit any applications or other filings that are necessary to protect 
those water rights as the agent of the United States in accordance with 
State law; and that notwithstanding the holder's obligation to maintain 
Federally owned NFS ski area water rights, the United States reserves 
the right to take any action necessary to maintain and protect those 
water rights, including submitting any applications or other filings 
that may be necessary to protect those water rights.
    Comment: Some commenters suggested that the Agency lacked the 
authority to force a permit holder to act as an agent of the United 
States by requiring the holder to maintain and bear the cost of 
acquiring, maintaining, and perfecting Federally owned NFS ski area 
water rights. These commenters also stated that the Forest Service 
cannot delegate its legislated duty to manage NFS lands to non-Federal 
entities.
    Response: The Forest Service has broad authority to condition 
special use authorizations, including the authority to require that the 
holder of a ski area permit establish, acquire, maintain, and perfect 
Federally owned original water rights and bear the cost of those 
actions.
    Comment: One commenter believed that the requirement in proposed 
paragraph F.3.c that any ski area water rights owned by the United 
States remain in Federal ownership was inconsistent with the purpose of 
the proposed directive and was unfair. This commenter asserted that 
permit holders who complied with prior requirements in ski area water 
clauses to transfer ownership to the United States should be able to 
recover those water rights under the final directive.
    Response: The final directive is not retroactive. Any water right 
owned solely or jointly by the United States was acquired in accordance 
with permit terms that were in effect at that time. Additionally, the 
Forest Service lacks authority to forfeit ownership of water rights to 
ski area permit holders. In an investigation of a land exchange in Utah 
conducted by the U.S. Department of Agriculture, Office of Inspector 
General (OIG), OIG stated that if water rights were excess to public 
needs, the water rights could be exchanged for properties or services 
of equal value. Excess water rights may also be disposed of pursuant to 
U.S. General Services Administration real property procedures. The 
Forest Service is not aware of any authority that would allow the 
Agency to relinquish title to water rights other than by exchange or 
disposal as noted above.
    In the final directive, the Agency has moved proposed paragraph 
F.3.c to paragraph F.3.d and revised it to state that original water 
rights owned solely by the United States and the United States' 
interest in jointly owned original water rights shall remain in Federal 
ownership. In addition, paragraph F.3.d in the final directive provides 
that notwithstanding the holder's obligation to maintain original water 
rights owned by the United States, the United States reserves the right 
to take any action necessary to maintain and protect those water 
rights, including submitting any applications or other filings that may 
be necessary to protect the water rights.

Proposed Paragraph F.3.d

    Proposed paragraph F.3.d provided that if a water facility 
corresponding to an NFS ski area water right was or is initiated, 
developed, certified, permitted, or adjudicated by the holder on NFS 
lands without a special use authorization, then the water facility is 
in trespass; that the owner of the NFS ski area water right must apply 
for authorization of the water facility; and that if authorization is 
denied, the owner of the NFS ski area water right

[[Page 81519]]

must promptly remove the point of diversion and water use from NFS 
lands or must abandon the NFS ski area water right.
    Comment: One commenter observed that it may not be possible to 
determine whether existing water facilities are properly authorized or 
in trespass because they may not be listed in the ski area permit or 
identified on a map attached to the permit. This commenter stated that, 
in practice, ski area improvements may have been considered authorized 
if they were located within the permit boundary and approved in a 
decision document pursuant to an environmental analysis. Several 
commenters asserted that the proposed directive would have retroactive 
effect because many water facilities for previously adjudicated ski 
area water rights would be found in trespass. These commenters also 
noted that proposed paragraph F.3.d is contrary to State laws that do 
not require landowner approval before adjudication of a water right. 
These commenters also believed that proposed paragraph F.3.d is 
contrary to numerous authorizations that allow development of privately 
owned water facilities on NFS lands and could jeopardize the 
availability of water for ski area operations. These commenters 
recommended that proposed paragraph F.3.d be revised or deleted. One 
commenter opined that the Agency lacks the legal authority to apply 
rules retroactively and suggested striking the words ``was or'' from 
proposed paragraph F.3.d.
    Response: The Agency is removing proposed paragraph F.3.d from the 
final directive because this provision is unnecessary. Existing 
regulations at 36 CFR 251.50(a) require a special use authorization for 
water facilities on NFS lands. Moreover, per paragraph 1 in the final 
instructions for the new ski area water clauses, all water facilities 
on NFS lands that are used primarily for operation of the ski area will 
be authorized under the ski area permit. Existing water facilities on 
NFS lands which are authorized by a separate, valid special use permit 
may remain under that separate permit, including upon reissuance, if 
eligible. These water facilities will not be eligible for reissuance 
under a separate permit if they are used primarily for operation of the 
ski area and the separate permit is issued under a statute other than 
the National Forest Ski Area Permit Act. This Act provides for ski 
areas and associated facilities on NFS lands to be authorized under its 
provisions. 16 U.S.C. 497b(a), (b). In that case, upon termination of 
the separate permit, the water facilities will be authorized under the 
ski area permit.
    In addition, under paragraph F.1.e in the final directive, when 
authorization for a water facility under the ski area permit terminates 
because a change in the water facility results in its ceasing to be 
used primarily for operation of the ski area, a separate special use 
authorization is required to operate that water facility or to develop 
a new water facility, unless the holder has a valid existing right for 
the water facility to be situated on NFS lands. A valid existing right 
in this context is a legal right, typically a statutory right, to use 
and occupy NFS lands. In the absence of a valid existing right, a 
separate special use authorization is required under these 
circumstances because it is not appropriate to utilize the National 
Forest Ski Area Permit Act to authorize water facilities that do not 
primarily support operation of a ski area. 16 U.S.C. 497b(a), (b). 
Paragraph F.1.e in the final directive also provides that unless the 
holder has a valid existing right for the water facility to be situated 
on NFS lands, if the holder does not obtain a separate special use 
authorization for these water facilities, the holder must remove them 
from NFS lands.

Proposed Paragraph F.4--Non-Severability of Certain Water Rights

Proposed Paragraph F.4.a

    Proposed paragraph F.4.a provided that when the United States owns 
any NFS ski area water rights, the Forest Service may not take any 
action that would adversely affect availability of those water rights 
to support operation of the ski area during the term of the permit, 
unless deemed necessary by the Forest Service to satisfy legal 
requirements.
    Comment: Several commenters did not believe that proposed paragraph 
F.4.a provided enough assurance that the Forest Service would not take 
any action that would adversely affect the availability of Federally 
owned NFS ski area water rights for ski area operations during the 
permit term. Some commenters asserted that it was unclear what was 
meant by ``legal requirements'' that might release the Agency from this 
commitment and questioned whether land management plan standards and 
guidelines would be deemed legal requirements. Additionally, commenters 
recommended narrowing the term ``legal requirement'' to ``the 
Endangered Species Act'' or striking the words ``unless deemed 
necessary by the Forest Service to satisfy legal requirements'' from 
the final directive. One commenter suggested striking proposed 
paragraph F.4.a entirely and addressing the Forest Service's commitment 
not to take any action adversely affecting the availability of 
Federally owned NFS ski area water rights on a case-by-case basis. One 
commenter suggested that this provision be revised to give ski area 
permit holders the right to approve changes the Forest Service makes to 
Federally owned NFS ski area water rights, so that they are dedicated 
to ski area operations for the benefit of the subsequent holder.
    Response: In the final directive, the Agency has revised paragraph 
F.4.a to state that the Agency shall not divide or transfer ownership 
of or seek any change in Federally owned water rights used by the 
holder that would adversely affect their availability for operation of 
the ski area during the term of this permit, unless required to comply 
with a statute or an involuntary court order that is binding on the 
Forest Service.
    Paragraph F.1.c in the final directive states that clause D-30 does 
not expand or contract the Agency's authority to place conditions on 
the installation, operation, maintenance, and removal of water 
facilities at issuance or reissuance of the permit, throughout the 
permit term, or otherwise. Thus, paragraph F.4.a does not expand or 
contract the Agency's ability to place conditions on water facilities 
under existing legal authority.

Proposed Paragraph F.4.b

    Proposed paragraph F.4.b provided that when the holder has an 
interest in any NFS ski area water rights, or water rights that the 
holder has purchased or leased from a party other than a prior holder 
that are changed or exchanged to provide for diversion from sources on 
NFS lands for use that primarily supports operation of the ski area 
authorized by the permit (``changed or exchanged water rights''), the 
holder may not take any action during the permit term that would 
adversely affect the availability of those water rights to support 
operation of the ski area authorized by the permit, unless approved in 
writing in advance by the authorized officer. Actions that require 
advance written approval by the authorized officer included any 
division or transfer of ownership of the water rights and any 
modification of the type, place, or season of use of the water rights.
    Comment: Some commenters believed that the restriction in proposed 
paragraph F.4.b would inhibit ski area permit holders' ability to 
manage their water rights and would substitute the

[[Page 81520]]

permit holders' discretion with that of the Forest Service in this 
context. Other commenters asserted, for example, that a permit holder 
may desire to sell water rights that once were necessary for ski area 
operations, but which the permit holder has determined are no longer 
necessary because of changed circumstances, such as increased 
efficiency. Alternatively, these commenters suggested that the permit 
holder may determine that it is in the best interests of the ski area 
to replace certain sources of necessary water with other sources, but 
would be unable to do so under proposed paragraph F.4.b. Some 
commenters believed that this provision would undermine the Forest 
Service's stated objective of ensuring sustainability of ski areas by 
impairing the holder's ability to develop and maintain water rights and 
ultimately would make less water available for successive permit 
holders. These commenters noted that ski area permit holders have 
acquired and maintained sufficient water rights at ski areas to provide 
outstanding recreation to the public on NFS lands at no cost to the 
Forest Service without a restriction on severability.
    One commenter noted that the type of actions that would require 
approval by the authorized officer, including ``any modification of the 
type, place, or season of use of the water rights,'' would be difficult 
to determine consistently because frequently in decrees and 
certificates States define water rights very broadly or list every 
conceivable water use. For example, this commenter stated that a decree 
for one ski area might simply list the uses for a ski area water right 
as ``commercial and domestic,'' while another decree for a ski area 
water right might list the uses as ``irrigation and domestic water for 
condominiums and homes, restaurants, and snowmaking.'' This commenter 
further noted that the difficulty would be compounded by the fact that 
States frequently do not assign a percentage of the total water right 
that is dedicated to each use, which would essentially leave it to the 
holder to tell the Agency how much water is typically consumed for each 
use.
    Commenters were concerned that the restriction in proposed 
paragraph F.4.b would apply to water rights that the holder does not 
own, in addition to water rights the holder has purchased or leased 
from a party other than a prior holder, and that the Forest Service 
lacks the authority to impose this restriction. One commenter noted 
that the Forest Service does not have sole discretion to determine 
whether it is legally entitled or required to interfere with a ski area 
water right. These commenters believed that State water administration 
authorities may also play a significant role in determining the 
appropriateness of the Forest Service's actions related to water 
rights. These commenters recommended that the directive recognize the 
need for the Forest Service to comply with State law and coordinate 
with State agencies before making any legal determination regarding ski 
area water rights. These commenters also suggested that the directive 
recognize the permit holder's right to seek judicial review of the 
accuracy of the Agency's determination that interference with a water 
right was required by law. Some commenters were concerned that the 
restriction in proposed paragraph F.4.b would have a retroactive effect 
because it would apply to water rights acquired many years ago.
    One commenter suggested that the proposed definition for ``changed 
or exchanged water rights'' was too narrow, in that it would apply only 
to water rights ``that the holder has purchased or leased from a party 
other than a prior holder.'' This commenter noted that this proposed 
definition would not include water rights that (1) are located off NFS 
lands; (2) are used under a change or exchange decree to allow 
diversion of water on NFS lands; and (3) were originally appropriated 
by the current or prior holder of the ski area permit, rather than 
being ``purchased or leased'' from another party. The commenter 
believed there is no reason to exclude these water rights from the 
scope of clause D-30. Another commenter recommended reinforcing that 
the restriction in proposed paragraph F.4.b would apply not only to 
purchased or leased ski area water rights, but also to ski area water 
rights acquired by the holder or a prior holder through appropriation. 
This commenter also recommended clarifying that the directive would not 
apply to water purchased by a ski area permit holder from a 
municipality or other entity that retains ownership of the associated 
water right.
    Response: A primary objective of the proposed and final directives 
is to address the long-term availability of water for ski areas on NFS 
lands so as to support the public recreation opportunity they provide 
and the economies of the local communities that depend on their 
revenue. The Agency believes that ensuring the long-term availability 
of water to operate ski areas on NFS lands can be accomplished by 
focusing on original water rights, i.e., water rights with a point of 
diversion and use inside the ski area permit boundary that were 
originally established by a permit holder.
    In the final directive paragraph F.4.b applies only to original 
water rights owned solely or jointly by the holder, which are critical 
to addressing sufficiency of water to operate a ski area on NFS lands. 
In addition, in deciding whether to approve division or transfer of or 
a change to an original water right, the authorized officer must 
consider any documentation prepared by the holder's qualified 
hydrologist or licensed engineer demonstrating that the proposed action 
will not result in a lack of a sufficient quantity of water to operate 
the permitted portion of the ski area.
    Moreover, the Agency has added paragraph F.4.c in the final 
directive, which states that the holder may seek to change, abandon, 
lease, divide, or transfer ownership of or take other actions with 
respect to acquired water rights at any time and solely within its 
discretion. Paragraph F.4.c in the final directive also provides that, 
following these actions, paragraph F.1.e will apply to the associated 
ski area water facilities. Paragraph F.1.e in the final directive 
addresses proper authorization, and in certain circumstances removal, 
of water facilities after certain changes have been made in connection 
with those water facilities.
    Paragraph F.4.b in the final directive applies only to original 
water rights that are owned solely or jointly by the holder, not to 
water that is purchased or leased from municipalities or other 
entities. The concerns regarding the definition for ``changed or 
exchanged water rights'' are moot because the Agency has removed that 
definition from the final directive. The Forest Service's authority to 
include a water clause in ski area permits to address availability of 
water for operation of ski areas on NFS lands is separate from prior 
appropriation doctrine States' authority to adjudicate and allocate 
water rights. Paragraph F.4.b in the final directive will not have 
retroactive effect because it will apply to the current holder of the 
ski area permit.

Proposed Paragraph F.5--Transfer of Certain Water Rights

Proposed Paragraph F.5.a

    Proposed paragraph F.5.a provided that upon termination or 
revocation of the permit, the holder must sell the holder's interest in 
any NFS ski area water rights or changed or exchanged water rights to 
the purchaser of the ski area improvements. Proposed paragraph F.5.a 
also provided that the holder will

[[Page 81521]]

retain the full amount of any consideration paid for those water rights 
by the purchaser of the ski area improvements, and that those water 
rights must continue to be used primarily in support of the ski area.
    Comment: Several commenters objected to proposed paragraph F.5.a on 
the grounds that limiting the market for ski area water rights to one 
buyer would undermine that market and devalue the water rights. 
Commenters believed the Forest Service should recognize that the 
existing holder is not the sole source of water rights for a succeeding 
holder. These commenters noted that the succeeding holder may have 
purchased water rights from another source prior to applying for the 
ski area permit or may be able to obtain sufficient water by acquiring 
water rights from the State or by purchasing or leasing water from 
municipalities, water districts, reservoir companies, or other 
entities. These commenters noted that the Forest Service should not 
restrict the succeeding holder to acquiring water rights from the 
current holder.
    Additionally, commenters questioned whether the Agency's concern 
regarding insufficiency of water rights for ski area operations was 
valid. These commenters believed it was unlikely that the holder would 
sell a viable ski area with insufficient water rights to operate 
because it would not be in the best interests of the holder to do so. 
The commenters also asserted that the Forest Service's authority under 
special use permit regulations at 36 CFR 251.54 and 251.59 to require 
that succeeding permit holders have a sufficient quantity of water to 
operate a ski area before issuing a new ski area permit was adequate to 
address the Agency's concern in this context.
    Three commenters believed that the existing permit holder should be 
required only to offer to sell certain types of ski area water rights 
at market value to the succeeding permit holder. These commenters 
believed that requiring the holder to offer to sell, rather than to 
sell, certain types of ski area water rights to the succeeding permit 
holder would maintain the value of the water rights while satisfying 
the Agency's interest in ensuring that sufficient water is available 
for ski area operations. The commenters believed this approach would be 
less likely to result in legal controversy because the approach would 
be more consistent with the ski area's property rights. These 
commenters recommended that the market value of these water rights be 
determined by appraisal and that the cost of the appraisal be split 
between the holder and the succeeding holder. Additionally, the 
commenters recommended that existing holders not be required to sell to 
the succeeding holder any water rights associated with undeveloped 
phases of a ski area's master development plan. Further, these 
commenters recommended that payment of the full price of ski area water 
rights purchased by the succeeding holder be due within 30 days of 
purchase or an otherwise agreed-upon timeframe.
    Conversely, other commenters supported the transfer requirement in 
proposed paragraph F.5.a because the requirement is premised on the 
commercial reality that water rights associated with a ski area permit 
are customarily included in the assets that are transferred to a buyer 
as part of the overall asking price, and because the transfer 
requirement is consistent with the requirement under the special use 
regulations at 36 CFR 251.60(i) to remove privately owned improvements 
from NFS lands when they are no longer authorized. One commenter agreed 
that it is appropriate for the holder to retain the full amount of the 
consideration paid by the succeeding holder for the holder's interest 
in ski area water rights.
    One commenter criticized the transfer requirement in proposed 
paragraph F.5.a as a perpetual allocation by the Federal government of 
Colorado's scarce water supply to an activity that could become 
economically marginal, but would be perpetuated as long as an 
individual or entity is willing to apply for a permit. This commenter 
believed that tying privately held water rights to a particular use in 
this manner could thwart the allocation of senior water rights to new 
and higher-value uses that are important for Colorado's future 
development.
    Response: The Agency believes that its concern regarding 
sufficiency of water for ski area operations can be addressed by 
requiring the holder to offer to sell, rather than to sell, the 
holder's interest in original water rights to the succeeding permit 
holder. This requirement, combined with the new requirement in the 
instructions for the purchaser of a ski area to submit documentation 
demonstrating that the purchaser holds or can obtain a sufficient 
quantity of water to operate the permitted portion of the ski area 
prior to obtaining a permit, will meet the Agency's objective of 
addressing sufficiency of water to operate the ski area while giving 
the succeeding permit holder the option to purchase the holder's 
interest in original water rights or obtain water from other sources. 
Neither the proposed nor the final directive provides for water rights 
to be tied perpetually to a use that may cease to be viable. Like the 
proposed directive, the final directive addresses disposition of ski 
area water rights when the ski area is not reauthorized upon 
termination or revocation of the permit.
    Paragraph F.5.a in the final directive also provides that if the 
succeeding permit holder declines to purchase original water rights 
owned solely by the holder, the holder may transfer them to a third 
party. If the succeeding permit holder declines to purchase the 
holder's interest in original water rights jointly held with the United 
States, the holder must offer to sell that interest at market value to 
the United States. If the United States declines to purchase that 
interest, the holder may abandon, divide, lease, or transfer its 
interest at its sole discretion.
    Paragraph F.5.a in the final directive imposes no restrictions on 
the transfer or abandonment of acquired water rights.
    Paragraph F.5.a in the final directive provides that the holder 
will retain the full amount of any consideration paid for the holder's 
interest in original or acquired water rights. Paragraph F.5.a in the 
final directive does not prescribe a valuation mechanism or payment 
timeframe, as the Agency believes these issues are more appropriately 
addressed by the parties to the sale.
    In addition, paragraph F.5.a in the final directive provides that 
following transfer or abandonment of water rights under that paragraph, 
paragraph F.1.e will apply to the associated ski area water facilities. 
Paragraph F.1.e in the final directive addresses proper authorization, 
and in certain circumstances removal, of water facilities after certain 
changes have been made in connection with those water facilities.

Proposed Paragraph F.5.b

    Proposed paragraph F.5.b provided that if the Forest Service does 
not reauthorize the ski area, the holder must promptly petition in 
accordance with State law to remove the point of diversion and water 
use from NFS lands for any changed or exchanged water rights and NFS 
ski area water rights owned solely by the holder, or the holder may 
relinquish those water rights. Proposed paragraph F.5.b further 
provided that the holder must relinquish its ownership interest in any 
water rights owned jointly by the holder and the United States.
    Comment: Some commenters objected to the requirement in proposed 
paragraph F.5.b to remove from NFS lands the point of diversion for any 
changed or exchanged water rights or

[[Page 81522]]

NFS ski area water rights owned solely by the holder if the ski area is 
not reauthorized. These commenters believed that the reason for this 
requirement is unclear and that it would be inconsistent with the 
purpose of the Supreme Court finding that the Forest Service's Organic 
Act reserved the National Forests primarily to provide water to western 
settlers. Commenters believed that changing the points of diversion for 
these water rights would require State proceedings, which would be 
administratively onerous and expensive. These commenters suggested that 
the Forest Service authorize those points of diversion under a separate 
permit and thus maintain the value of the water rights. Another 
commenter observed that allowing the holder to transfer water rights to 
different points of diversion and use if the ski area is not 
reauthorized is consistent with Colorado State law and would mitigate 
any potential for forfeiture of the holder's solely owned water rights 
to the United States.
    One commenter was concerned that the requirement to relinquish to 
the United States the holder's interest in jointly owned water rights 
if the ski area is not reauthorized would eliminate any market for 
those water rights. Another commenter noted that water rights 
appropriated under State law in western states are not appurtenant to 
the land, and that the owner of these water rights can sever them from 
the land and transfer them to a different point of diversion and use, 
provided that the transfer does not impair other water rights. One 
commenter stated that there would be no impact on ski area recreation 
opportunities on NFS lands if the holder transferred its interest in 
jointly owned ski area water rights to a different point of diversion 
and use if the ski area is not reauthorized by the Forest Service.
    Response: In the final directive, the Agency has revised paragraph 
F.5.b to allow the holder to submit a proposal to the Forest Service 
for a permit authorizing a different use for the ski area water 
facilities. If a different use is not authorized for those water 
facilities, the holder must remove them from NFS lands. The Agency has 
replaced the requirement to relinquish the holder's interest in jointly 
owned ski area water rights to the United States if the ski area is not 
reauthorized with the requirement to offer to sell that interest to the 
United States at market value. Paragraph F.5.b in the final directive 
provides that if the United States declines to purchase that interest, 
the holder may abandon, divide, lease, or transfer its interest at its 
sole discretion. The Forest Service agrees that when a ski area is not 
reauthorized, there most likely would be no impact on ski area 
recreation opportunities on NFS lands if the holder severed its 
interest in jointly owned ski area water rights from the United States' 
interest in those water rights. Paragraph F.5.b in the final directive 
also clarifies that the holder may, in its sole discretion, abandon, 
divide, lease, or transfer any water rights solely owned by the holder.

Proposed Paragraph F.6--Documentation of Transfer

    Proposed paragraph F.6 provided that when the foregoing provisions 
in proposed clause D-30 require the holder to transfer the holder's 
interest in any NFS ski area water rights or changed or exchanged water 
rights to the holder of a subsequent permit, the holder or the holder's 
heirs and assigns must execute and properly file any documents 
necessary to transfer the holder's interest, including but not limited 
to executing a quit claim deed. Proposed paragraph F.6 also provided 
that by executing the permit, the holder grants a limited power of 
attorney to the authorized officer to execute, on behalf of the holder, 
any documents necessary to transfer ownership under the foregoing 
provisions.
    Comment: Commenters objected to the limited power of attorney in 
proposed paragraph F.6 with regard to execution of documents necessary 
to transfer ownership of water rights on the grounds that it is 
offensive, heavy-handed, adversarial, unnecessary, and unsupported by 
law. Several commenters recommended that the Agency remove the limited 
power of attorney provision from the final directive or provide further 
justification for its need.
    Response: The Agency has removed proposed paragraph F.6 from the 
final directive, as it is not necessary to support the revised concept 
for addressing sufficiency of water for operation of ski areas on NFS 
lands. In particular, since the final directive no longer requires 
transfer of water rights, there is no need for a limited power of 
attorney on behalf of the Forest Service to ensure water rights are 
transferred if the holder declines to do so.

Proposed Paragraph F.7--Waiver

    Proposed paragraph F.7 provided that the holder waives any claims 
against the United States for compensation for any water rights the 
holder transfers, removes, or relinquishes as a result of the foregoing 
provisions in proposed clause D-30; any claims for compensation in 
connection with imposition of restrictions on severing any water 
rights; and any claims for compensation in connection with imposition 
of any conditions on installation, operation, maintenance, and removal 
of water facilities in support of the ski area authorized by the 
permit.
    Comment: Commenters objected to proposed paragraph F.7 on the 
grounds that it would require waiver of their constitutional 
protections and that the Forest Service lacks statutory authority to 
require waiver of those protections. Other commenters believed that the 
waiver requirement was unnecessary. One commenter recommended that the 
Agency rely on the constitutionality of the final directive, rather 
than require permit holders to waive constitutional claims. Several 
commenters requested that proposed paragraph F.7 be removed from the 
final directive.
    Response: The Agency does not believe that a waiver provision is 
necessary, since the Agency does not believe that proposed and final 
clause D-30 effect a taking of private property. Therefore, the Agency 
has removed proposed paragraph F.7 from the final directive.

Proposed Paragraph F.8--Inventory of Necessary Water Rights

    Proposed paragraph F.8 included 5 tables for recording certain 
information about water rights, including the state identification 
number; owner; purpose of use; decree, license, or certificate number; 
point of diversion; and point of use. Each table addressed a different 
category of water rights, including NFS ski area water rights that are 
owned solely by the United States; NFS ski area water rights that are 
owned solely by the holder; NFS ski area water rights that are owned 
jointly by the United States and the holder; changed or exchanged water 
rights; and water rights for points of diversion on non-NFS lands for 
use on NFS lands within the permit boundary.
    Comment: One commenter opposed the requirement to create and 
maintain an inventory of ski area water rights on the grounds that it 
would impose an unnecessary burden on the Forest Service and could 
introduce a conflict between the States' or permit holder's water 
rights records and the Agency's inventory. Additionally, this commenter 
asserted that the inventory was not necessary to ensure that a 
succeeding permit holder had sufficient water for operation of the ski 
area and would impose unnecessary bureaucratic delay on permit holders 
and needless workload on Agency staff. Another commenter noted that the 
inventory was

[[Page 81523]]

unnecessary given the Agency's lack of water rights oversight to date 
and the ski industry's history of using those water rights to provide 
outstanding recreation opportunities at no cost to the Agency.
    Some commenters were concerned that inventorying water rights for 
points of diversion on non-NFS lands for use on NFS lands within the 
permit boundary per proposed paragraph F.8.e could be interpreted as 
imposing limitations on third-party water rights owned by entities that 
have no interest in the permitted ski area and that such restrictions 
would unreasonably interfere with the use of water that is located 
outside the permit area and is unrelated to the ski area. One commenter 
asserted that there is no connection between inventorying water rights 
for points of diversion on non-NFS lands and the Forest Service's 
interest in ensuring continuity of recreation opportunities for skiing 
on NFS lands and protecting water resources within the ski area permit 
boundary.
    Some commenters generally supported inventorying NFS ski area water 
rights because the inventory would disclose water uses by ski areas on 
Federal land. One commenter requested that the final directive be 
revised to specify a procedure for updating the inventory of ski area 
water rights that primarily support operation of the ski area when a 
ski area permit is amended or reissued to a new holder. This commenter 
believed that an updated inventory would reflect any additions or 
deletions from the list of ski area water rights and that these changes 
should be subject to public notice and comment.
    One commenter was concerned that focusing on ski area water rights 
in their entirety, rather than on the specific interest in water rights 
held by the permit holder for ski area purposes, would invite arguments 
about the scope of the inventory; risk excluding water supplies that 
are important to the continued operation of the ski area; and possibly 
create problems for third parties, such as a reservoir company and its 
shareholders, who also have ownership or other interests in the water 
rights. The commenter observed that ski area water rights in Colorado 
may be divided into fractional interests that are separately owned. In 
that case, different uses of the same water right may be subject to 
separate terms and conditions for purposes of administration by the 
State engineer. Alternatively, ski area water rights could be owned by 
nonprofit corporate entities such as ditch and reservoir companies, and 
the interests in those water rights could be represented by shares of 
stock in those companies.
    Response: An inventory of ski area water facilities is necessary to 
implement clauses D-30 and D-31 in the final directive to track water 
facilities that are authorized under the ski area permit, both at 
permit issuance and during the permit term, i.e., after changes are 
made in connection with water facilities that affect whether they are 
being used primarily for operation of the ski area. An inventory of 
original water rights is necessary to implement clause D-30 in the 
final directive to track original water rights for purposes of 
implementing paragraphs in clause D-30 that apply to those water 
rights. Per paragraph F.4.b in the final directive, the inventory will 
be updated by the holder upon reissuance of the ski area permit, 
installation or removal of a ski area water facility, when a listed ski 
area water facility is no longer authorized by the permit, or when an 
original water right is no longer used for operation of the ski area.
    The Agency does not believe that maintaining an inventory of 
original water rights will impose an unnecessary burden on the Forest 
Service or pose the risk of a conflict with the States' or permit 
holder's water rights records. Holders have a record of their ski area 
water rights and can provide the requisite information to the 
authorized officer to ensure that the inventory is accurate and updated 
as needed. Maintaining the inventory in the final directive will be 
simpler than maintaining the inventory in the proposed directive. In 
the final directive, the Agency has moved the inventory tables to an 
appendix and has reduced the 5 tables to 2, to track only original 
water rights and ski area water facilities authorized under the ski 
area permit. Finally, the Agency has removed the requirement for 
Regional Forester approval of the inventory before issuance of a new or 
modified ski area permit.
    The Agency agrees that water rights for points of diversion off NFS 
lands for use on NFS lands inside the ski area permit boundary should 
not be tracked in the inventory. These water rights do not arise from a 
point of diversion on NFS lands and therefore do not meet the 
definition of ``ski area water rights'' in the final directive.
    The Agency does not believe that changes to the inventory should be 
subject to public notice and comment. The inventory is a tracking 
mechanism. Prior appropriation doctrine States, not the Federal 
government, adjudicate and allocate water rights. Forest Service 
decisions regarding installation or removal of ski area water 
facilities will be subject to appropriate environmental analysis, 
including public involvement, as appropriate.

Proposed Paragraph F.9--Performance Bond

    Proposed paragraph F.9 provided that when the holder owns any 
changed or exchanged water rights or solely owns any NFS ski area water 
rights, the holder must maintain a performance bond that fully covers 
the cost of removing all privately owned ski area improvements and 
restoring the site if the use is not reauthorized. Proposed paragraph 
F.9 also provided for the minimum amount of the bond to be specified 
and for the amount of the bond to be determined by the authorized 
officer.
    Comment: One commenter asserted that Forest Service form SF-25 is 
not appropriate for implementing the proposed performance bond 
requirement because of the form's references to ``contracts'' and 
``contractors.'' This commenter recommended that a new form be 
developed that is tailored specifically to the obligations under FSM 
6560.5. Other commenters questioned the need for a new performance bond 
requirement that would cover the cost of removing facilities and site 
restoration if a ski area is not reauthorized. Some commenters sought 
clarification as to how this performance bond compares to the existing 
performance bond requirements in the ski area permit. One commenter 
asserted that this requirement is unnecessary because of the existing 
performance bond clause in the ski area permit, which allows the Forest 
Service to require a performance bond at its discretion. One commenter 
asked for clarification as to whether the performance bond requirement 
would apply only to water facilities or to any ski area facilities. 
Additionally, some commenters objected to the cost of the performance 
bond.
    Some commenters supported the performance bond requirement to 
ensure that the permit holder removes authorized water facilities when 
the permit terminates and suggested that the performance bond 
requirement be extended to all special use permits.
    Response: The shift in focus with respect to ski area water rights 
from non-severability in the proposed directive to ensuring sufficiency 
of water for ski area operations in the final directive makes the 
performance bond requirement unnecessary in the final directive. 
Therefore, the Agency has removed proposed paragraph F.9 from the final 
directive. The objection to the

[[Page 81524]]

use of form SF-25 is moot because the bonding requirement has been 
removed. The recommendation to expand the performance bond requirement 
to other types of special use permits is beyond the scope of this 
directive.

Acknowledgment of Terms

    This provision stated that the holder has read and agrees to all 
terms and conditions of the permit, including the authorization 
provided in proposed paragraph F.6 that allows the authorized officer 
to act on the holder's behalf in executing all necessary documents to 
transfer ownership of NFS ski area water rights and changed or 
exchanged water rights as provided in the permit. No comments were 
received on this provision. Since proposed paragraph F.6 has been 
removed from the final directive, the acknowledgment of terms provision 
is moot and has also been removed from the final directive.
b. RIPARIAN DOCTRINE STATES--CLAUSE D-31
    In several respects, the comments and responses on proposed clause 
D-30 apply to proposed clause D-31. Consequently, where applicable, the 
Agency has revised clause D-31 in the final directive, including the 
instructions, to track the changes to clause D-30 in the final 
directive, including the instructions.

Proposed Paragraph F.1--Water Facilities

Proposed Paragraph F.1.d

    Proposed paragraph F.1.d provided that the United States may place 
conditions on installation, operation, maintenance, and removal of any 
water facility that are deemed necessary by the United States to 
protect public property, public safety, and natural resources on NFS 
lands.
    Comment: Commenters asserted that the Forest Service does not have 
unfettered rights to impose any condition it sees fit on ski area water 
facilities as implied by proposed paragraph F.1.d. These commenters 
recommended that proposed paragraph F.1.d be amended in the final 
directive to add ``in accordance with applicable laws'' as required by 
the National Forest Ski Area Permit Act.
    Response: The Forest Service has redesignated proposed paragraph 
F.1.d as F.1.c in the final directive and revised paragraph F.1.c to 
track the revisions to the corresponding paragraph in proposed clause 
D-30. The response to comments on the corresponding proposed paragraph 
in clause D-30 is incorporated here by reference.

Proposed Paragraph F.1.e

    Proposed paragraph F.1.e provided that only water facilities that 
are necessary for and that primarily support operation of the ski area 
authorized by the permit may be included in the permit. No specific 
comments were received on proposed paragraph F.1.e in clause D-31. The 
Forest Service has redesignated proposed paragraph F.1.e as F.1.d and 
revised the paragraph to track the revisions made to the corresponding 
proposed paragraph in clause D-30.

New Paragraph F.1.e

    The Agency has added a new paragraph F.1.e requiring an inventory 
of all ski area water facilities on NFS lands to be included in the 
appendix of the permit. The inventory must be updated by the holder 
upon reissuance of the ski area permit, installation or removal of a 
ski area water facility, or when a listed ski area water facility is no 
longer authorized by the ski area permit. This new paragraph 
corresponds to the new inventory provision in clause D-30 and is needed 
to track water facilities that are authorized under the ski area 
permit, both at permit issuance and during the permit term, i.e., after 
changes are made in connection with water facilities that affect 
whether they are being used primarily for operation of the ski area.

Proposed Paragraph F.1.f

    Proposed paragraph F.1.f provided that any change in water 
facilities authorized by this permit will result in termination of the 
authorization for those water facilities, unless the change is 
expressly authorized by a permit amendment. As examples of this type of 
change, proposed paragraph F.1.f listed use of the water in a manner 
that does not primarily support operation of the ski area authorized by 
the permit and a change in the beneficial use, location, or season of 
use of water.
    Comment: A commenter was concerned that proposed paragraph F.1.f 
would unreasonably restrict the maintenance and management of water 
resources and that greater flexibility was needed by holders in this 
context. For example, this commenter cited the need for flexibility to 
respond to changes in technology, weather conditions, or operational 
priorities and the need to make decisions quickly or in the case of a 
Federal government shutdown.
    Response: In the final directive, the Agency has revised proposed 
paragraph F.1.f to track the revisions made to the corresponding 
paragraph in proposed clause D-30. The response to comments on the 
corresponding proposed paragraph in clause D-30 is incorporated here by 
reference.

Proposed Paragraph F.1.g

    Proposed paragraph F.1.g provided that the holder must obtain a 
separate special use authorization to initiate, develop, certify, or 
permit any water facility on NFS lands that does not primarily support 
operation of the ski area authorized by the permit.
    Comment: Commenters were concerned that separate permits issued 
under proposed paragraph F.1.g would not include the ski area water 
clauses, but rather would include standard water clauses for other 
special uses that require ownership of the water rights to be 
transferred to the United States.
    Response: In the final directive, the Agency has combined proposed 
paragraph F.1.g with paragraph F.1.f. In addition, the Agency has 
revised proposed paragraph F.1.g to track the revisions made to the 
corresponding provision in proposed clause D-30. The response to 
comments on the corresponding proposed paragraph in clause D-30 is 
incorporated here by reference.

Proposed Paragraph F.2--Water Rights

    Comment: Some commenters recommended revising proposed paragraph 
F.2 to dedicate ski area water rights to ski area purposes to the 
extent the United States has any right, title, or interest in them as a 
riparian or littoral landowner.
    Response: In riparian doctrine States, water rights are appurtenant 
to the land and cannot be severed from the land. Therefore, in contrast 
to clause D-30, there is no need for clause D-31 to address 
severability of water rights from the permitted NFS lands.

No Takings Implications

    Comment: Several commenters were concerned that proposed clause D-
30 would effect a taking of private property by the Federal government. 
Commenters asserted several bases for this concern, including the fact 
that the proposed directive would not rescind water clauses for other 
special uses that require transfer of ownership of water rights to the 
United States; would require transfer of NFS ski area water rights to a 
succeeding permit holder; and would require transfer of the holder's 
solely owned NFS ski area water rights to the United States if the 
holder fails to move the point of diversion and use for those water 
rights when a ski area is not reauthorized. In addition, these 
commenters cited their belief that proposed clause D-30 would

[[Page 81525]]

establish absolute control over the adjudication and operation of ski 
area water rights, for example, by requiring Forest Service permission 
for even minor changes; would allow the Forest Service to impose 
unlimited restrictions on water rights; and would not rescind prior ski 
area water rights clauses that required transfer of ownership of water 
rights to the United States. Several commenters asserted that the 
Forest Service lacks the legal authority to require holders to 
relinquish water rights under the ski area permit.
    Response: The Forest Service does not believe the proposed and 
final directives effect a taking of private property. Including 
requirements regarding ski area water rights in ski area permits that 
are issued, reissued, or modified under 36 CFR 251.61, rather than in 
existing ski area permits, does not effect a taking of private 
property. The Forest Service has broad authority to include appropriate 
terms and conditions in special use permits, including ski area 
permits. 79 FR 35516 (June 23, 2014); 16 U.S.C. 481, 497, 497b, 529, 
551; 43 U.S.C. 1765; 36 CFR 251,56(a)(ii)(A), (a)(ii)(B), (a)(ii)(E), 
(a)(ii)(G). A ski area permit is a voluntary transaction, and a holder 
can decline the permit or accept the permit subject to its new 
conditions.
    Neither the proposed nor the final directive provides for Forest 
Service adjudication of water rights. The provisions governing use of 
water facilities have been clarified and narrowed consistent with the 
objectives of the final directive. When it becomes effective, the final 
directive will supersede prior ski area water clauses in the Forest 
Service's Directive System and standard ski area permit form.
    Water clauses in existing ski area permits, other than the 2011 and 
2012 water clauses that were invalidated by the court's order in 
National Ski Areas Association, Inc. v. United States Forest Service, 
remain in effect. Holders of existing permits that are not being 
reissued or modified under 36 CFR 251.61 may elect to have these water 
clauses replaced with the appropriate water clause in the final 
directive within one year of the effective date of the final directive, 
provided they:
    (1) agree to have all water facilities on NFS lands that are used 
primarily for operation of the ski area and that are not authorized 
under a separate permit:
    (a) authorized by their ski area permit;
    (b) designated on a map attached to the permit; and
    (c) included in an inventory in an appendix to the permit; and
    (2) submit documentation prepared by their qualified hydrologist or 
licensed engineer demonstrating that:
    (a) they hold or can obtain a sufficient quantity of water to 
operate the permitted portion of the ski area; and
    (b) identifying all water sources, water rights, and water 
facilities necessary to demonstrate a sufficient quantity of water to 
operate the ski area, including all original water rights; all water 
facilities authorized by the ski area permit; and any existing 
restrictions on withdrawal or diversion of water that are required to 
comply with a statute or an involuntary court order that is binding on 
the Forest Service.
    Per paragraph F.3.d of the final directive, original water rights 
owned solely by the United States and the United States' interest in 
jointly owned original water rights will remain in Federal ownership.
    Water clauses for special uses other than ski areas are beyond the 
scope of this directive.

Controlling Paperwork Burdens on the Public

    Comment: One commenter recommended developing a new standard form 
to document the bonding requirement for removal of ski area 
improvements and site restoration, rather than relying on Forest 
Service form SF-25, which is intended to secure performance under the 
terms of the permit.
    Response: This comment is moot, since the Agency has removed the 
bonding requirement from the final directive.

Federalism and Consultation and Coordination With Indian Tribal 
Governments

    The Agency has considered the final directive under the 
requirements of E.O. 13132 on federalism and has concluded that the 
final directive conforms to the federalism principles in the E.O. The 
final directive will not impose any compliance costs on the States and 
will not have substantial direct effects on the States, the 
relationship between the Federal Government and the States, or the 
distribution of power and responsibilities among the various levels of 
government. Therefore, the Agency has determined that no further 
assessment of federalism implications is necessary at this time.
    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    The Forest Service has assessed the impact of this policy on Indian 
tribes and determined that this directive does not, to our knowledge, 
have tribal implications that require tribal consultation under E.O. 
13175. However, the Forest Service provided a 120-day government-to-
government consultation period for recognized Tribes starting July 28, 
2014. Tribes were provided the Federal Register notice for the proposed 
directive and proposed clauses D-30 and D-31. Tribes were encouraged to 
contact their local Forest Service administrative unit to engage in 
government-to-government consultation. Five Tribes submitted written 
comments in response to the request for consultation. The Hopi and 
Navajo Tribes acknowledged receipt of the comment opportunity, but did 
not provide comments.
    The summaries of those Tribes that did comment and the Agency's 
responses follow.
    Comment: The Tulalip Tribes stated that their water rights pursuant 
to the Treaty of Point Elliot of January 22, 1855 (12 Stat. 927), 
include a water right for instream flows to protect and enhance fish 
species and their habitat and to provide the habitat for flora and 
fauna harvested under the Treaty. The Tulalip Tribes want the Forest 
Service to ensure that water rights for ski areas in the State of 
Washington are held by the Federal government and are specifically 
limited to the term, place, and uses in the ski area permit. The 
Tulalip Tribes believed that this restriction would ensure that waters 
important for preservation of NFS lands and resources could not be 
transferred to other uses. The Tulalip Tribes further noted that the 
proposed directive addresses providing recreation opportunities, 
economic benefit to holders of special use permits, and protecting the 
public interest in water and other resources under the Agency's 
jurisdiction, but fails to acknowledge the Agency's legal duty to 
protect the Tulalip Tribes' water rights, which predate any other water 
rights pursuant to the Treaty of Point Elliot and an E.O. dated 
December 23, 1873.
    Response: For the reasons stated above, the final directive 
modifies the

[[Page 81526]]

Forest Service's approach to accomplishing the objective of long-term 
availability of water to sustain ski area uses. In particular, the 
final directive does not provide for ski area water rights to be 
acquired in the name of the United States. With respect to ski area 
water rights, the final directive emphasizes sufficiency of water for 
ski area operations. In particular, the final directive includes a 
definition for the term, ``sufficient quantity of water to operate the 
ski area,'' and clarifies when and how the holder must demonstrate a 
sufficient quantity of water to operate the ski area; provides that the 
holder may not make changes that would adversely affect the 
availability of the holder's solely or jointly owned original water 
rights for ski area operations during the permit term, unless approved 
in writing in advance by the authorized officer; requires the holder to 
offer to sell the holder's interest in original water rights to the 
succeeding permit holder; and provides that if a purchaser of the ski 
area declines to buy the holder's interest in jointly owned original 
water rights, the holder must offer to sell that interest to the United 
States.
    The Forest Service is committed to honoring Tribal treaty and other 
reserved rights, including Tribal water rights. Nothing in the final 
directive will infringe upon these rights. Water rights acquired under 
State law in connection with ski area permits are subject to the valid 
existing water rights of other water rights holders, including valid 
existing Tribal treaty and other reserved water rights, if any. 
Reference to the water rights of specific Tribes would be outside the 
scope of this directive, which sets forth water clauses for ski area 
permits.
    Comment: The Winnebago Tribe of Nebraska stated that the proposed 
directive may proceed, but asked to be notified if any burial sites or 
cultural properties are found during construction, as the Tribe has 
cultural properties on NFS lands. Similarly, the Ysleta Del Sur Pueblo 
Tribe asked to be consulted if any human remains or artifacts that fall 
under Native American Graves Protection and Repatriation Act (NAGPRA) 
guidelines are unearthed in connection with the proposal. The Ysleta 
Del Sur Pueblo Tribe stated that it does not have any other comments, 
does not object to the proposed directive, and does not believe that it 
would otherwise adversely affect any traditional, religious, or 
culturally significant sites of the Tribe.
    Response: The final directive does not implement any site-specific 
decisions regarding the conditioning or construction of water 
facilities at ski areas on NFS lands. If a Tribe requests consultation 
on the final directive, the Forest Service will work with the Office of 
Tribal Relations to ensure meaningful consultation is provided where 
changes, additions and modifications identified herein are not 
expressly mandated by Congress. The Forest Service will evaluate the 
need for and conduct appropriate tribal consultation on such site-
specific projects if and when they are proposed. Prior to any permit 
being issued or conditions being placed, the authorized officer must, 
pursuant to Executive Orders 12898 and 13175 and NFS Directives, 
consult with relevant populations, including tribes having a current or 
historical interest in the NFS lands authorized by the permit or 
condition. Additionally, in accordance with NAGPRA, an existing clause 
in the standard ski area permit form states that if the holder 
inadvertently discovers human remains, funerary objects, sacred 
objects, or objects of cultural patrimony on NFS lands, the holder must 
immediately cease work in the area of the discovery; make a reasonable 
effort to protect and secure the items; and immediately notify the 
authorized officer by telephone of the discovery and follow up with 
written confirmation of the discovery.

4. Regulatory Certifications

Environmental Impact

    This final directive revises national Forest Service policy 
governing water rights in ski area permits. Forest Service regulations 
at 36 CFR 220.6(d)(2) exclude from documentation in an environmental 
assessment or environmental impact statement ``rules, regulations, or 
policies to establish Service-wide administrative procedures, program 
processes, or instructions.'' The Agency has concluded that this final 
directive falls within this category of actions and that no 
extraordinary circumstances exist which would require preparation of an 
environmental assessment or environmental impact statement.

Regulatory Impact

    This final directive has been reviewed under USDA procedures and 
E.O. 12866 on regulatory planning and review. The Office of Management 
and Budget (OMB) has determined that this final directive is 
significant and therefore subject to OMB review under E.O. 12866. The 
final directive is not economically significant because it will not 
have an annual effect of $100 million or more on the economy; it will 
not adversely affect productivity, competition, jobs, the environment, 
public health and safety, or State or local governments; and it will 
not alter the budgetary impact of entitlement, grant, or loan programs 
or the rights and obligations of beneficiaries of those programs or 
interfere with an action taken or planned by another agency.
    The cost-benefit analysis prepared by the Agency for the final 
directive concludes that the benefits of the final directive to the 
Forest Service substantially outweigh the costs because the Agency has 
corrected the procedural deficiencies associated with 2011 and 2012 ski 
area water clauses and because the final directive will enhance 
treatment of ski area water rights and administration of ski area water 
facilities under ski area permits. The cost-benefit analysis also 
concludes that the costs to permit holders associated with the final 
directive are minimal and are substantially outweighed by the benefits 
of enhanced sustainability of ski areas on NFS lands and improved 
administration of ski area permits.
    The Agency has considered the final directive in light of the 
Regulatory Flexibility Act (5 U.S.C. 602 et seq.). Pursuant to a 
threshold Regulatory Flexibility Act analysis, the Agency has 
determined that the final directive will not have a significant 
economic impact on a substantial number of small entities as defined by 
the Act because the final directive will impose only modest record-
keeping requirements on them; will not affect their competitive 
position in relation to large entities; and will not affect their cash 
flow, liquidity, or ability to remain in the market. The final 
directive will likely have a positive economic effect on current and 
future ski area permit holders and local communities close to ski areas 
because the final directive addresses long-term sustainability of ski 
areas. The basis for this determination is enumerated in the threshold 
Regulatory Flexibility Act analysis for the final directive.

No Takings Implications

    The Agency has analyzed the final directive in accordance with the 
principles and criteria contained in E.O.12630 and has determined that 
the final directive will not pose the risk of a taking of private 
property.

Civil Justice Reform

    The Agency has reviewed the final directive under E.O. 12988 on 
civil justice reform. Upon adoption of the final directive, (1) all 
State and local laws and regulations that conflict with the final 
directive or that impede its full implementation will be preempted; (2) 
no retroactive effect will be given to the

[[Page 81527]]

final directive; and (3) it will not require administrative proceedings 
before parties file suit in court challenging its provisions.

Energy Effects

    The Agency has reviewed the final directive under E.O. 13211, 
entitled ``Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use.'' The Agency has determined that 
the final directive does not constitute a significant energy action as 
defined in the E.O.

Unfunded Mandates

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1531-1538), the Agency has assessed the effects of the final 
directive on State, local, and Tribal governments and the private 
sector. The final directive will not compel the expenditure of $100 
million or more by any State, local, or Tribal government or anyone in 
the private sector. Therefore, a statement under section 202 of the act 
is not required.

Controlling Paperwork Burdens on the Public

    The information collection associated with the final directive is 
different from the information collection associated with the proposed 
directive. In particular, rather than requiring an inventory of 5 
different types of water rights, the final directive requires an 
inventory of only original water rights and ski area water facilities 
authorized by the permit. In addition, the final directive requires an 
applicant for a new or modified ski area permit to document a 
sufficient quantity of water to operate the ski area and an applicant 
for a new water facility to document a sufficient quantity of water to 
operate the proposed water facility.
    Therefore, through this Federal Register notice, the Agency is 
providing an opportunity to comment on the information collection 
associated with the final directive during the 30-day period between 
the publication date and the effective date of the final directive. 
When this information collection has been approved for use, it will be 
incorporated into OMB control number 0596-0082, Special Uses 
Administration. All other information collections associated with the 
ski area permit are already covered by OMB control number 0596-0082.
    The following summarizes the information collection associated with 
the final directive:

    OMB Control Number: 0596-0235.
    Estimated Burden per Response: 1.5 hours.
    Type of Respondents: Ski area permit holders.
    Estimated Annual Number of Respondents: 40.
    Estimated Annual Average Number of Responses per Respondent: 
1.5.
    Estimated Total Annual Burden on Respondents: 90 hours.

    Comment is invited on (1) whether this information collection is 
necessary for the stated purposes and proper performance of the 
functions of the Agency, including whether the information will have 
practical or scientific utility; (2) the accuracy of the Agency's 
estimate of the burden associated with the information collection, 
including the validity of the methodology and assumptions used; (3) 
ways to enhance the quality, utility, and clarity of the information to 
be collected; and (4) ways to minimize the burden of the information 
collection on respondents, including automated, electronic, mechanical, 
or other technological collection techniques or other forms of 
information technology. All comments received in response to the notice 
of this information collection, including names and addresses when 
provided, will be included in the record for the final directive. The 
comments will be summarized and included in the package submitted to 
OMB for approval.

5. Access to the Final Directive

    The Forest Service organizes its Directive System by alphanumeric 
codes and subject headings. The intended audience for this direction is 
Forest Service employees charged with issuing and administering ski 
area permits. To view the final directive, visit the Forest Service's 
Web site at http://www.fs.fed.us/specialuses. Only the sections of the 
FSH that are the subject of this notice have been posted, i.e., FSH 
2709.11, Special Uses Handbook, Chapter 50, Standard Forms and 
Supplemental Clauses, Section 52.4.

    Dated: December 23, 2015.
Thomas L. Tidwell,
Chief, Forest Service.
[FR Doc. 2015-32846 Filed 12-29-15; 8:45 am]
 BILLING CODE 3411-15-P