While conservation easements have become an increasingly popular way for private owners to protect land from development, the donation of instream water rights to protect streams and rivers is still relatively unknown. The owners donated 20 acre-feet of water annually for instream flows in the Virgin River, which is home to several threatened and endangered fish. In return, they will receive tax benefits for both their land and water donations.
The trust will hold the land easement in perpetuity, but the water rights will be transferred to the Utah Department of Natural Resources, which at this time is the only entity in Utah legally able to keep water instream for the benefit of the environment. Frequently, ranchers would prefer to leave their water instream for fish and wildlife rather than irrigate marginally productive land. However, this common-sense solution is thwarted by the "use it or lose it" rule.
In many Western states, the law requires owners to use their water for agricultural, municipal, or industrial purposes. If they leave the water in the stream, they forfeit their water right a death knell in the West. To avoid this onerous penalty, owners can donate water rights to conservation groups, which must then deed the right to the state if the water is to be kept in the stream.
Conservation groups are hopeful that examples such as Horse Valley Ranch will persuade others that donating water rights for instream flows is just as important as donating development rights to protect open space.