Exempt Wells - Exasperating Exceptions

OK, let's try our hand at exempt wells in the West.  Kansas has them, as does virtually every other western state.  Should we keep them or not?  First some background. 

In Kansas every water use requires a water right - except domestic.  And every water right is in a priority system - the first in time is the first in right - otherwise called a senior water right.  The question is:  Do new water rights that are exempt from the normal water right review process pose a hydrologic problem to existing, senior, water rights?

The early thinking was that domestic use was too small to regulate and should not be burdened with the formality of a formal water right filing system that is best reserved to the larger wells that had potential to impair or negatively affect earlier (senior) water rights.  Besides, having the ability to regulate domestic wells could provide the regulators a direct opportunity to control or prevent population growth by developing restrictive domestic water right rules.  Can't have that!

However, I don't think that anyone can argue that more and more exempt domestic wells can and will eventually overdevelop any water supply and cause water right problems.  You know...there comes a time when one last sequin ruins the dress.  This has been the issue at hand in many recent discussions, and is the precise issue behind a law suit filed in New Mexico by a senior water right owner named Horace Bounds, Jr. who is claiming that subsequent exempt well development in his area is now impairing his senior water right.  This case is now in the New Mexico Supreme Court.

It is here that I have to admit that Kansas actually has two exempt well issues.  Not only has the state specifically excluded domestic wells from the filing requirements of its water appropriation act, but certain small-use, non-domestic uses have also been exempted by both the state and the local GMDs.  It's a subtle distinction I admit, but whereas just about everyone seems to be OK with domestic uses being exempt, at least initially, why would Kansas compound the issue by exempting ANY non-domestic use?
   
I've heard the justification for the Kansas system posed this way:  Since every exempt water use has a water right and a priority date (even with the state's exemption) they are subject to waste of water and impairment issues just like every other water right in the state.  As such, the water rights administration process can adequately handle their impacts on existing wells, so why go through the tedious filing procedure for the tens (or hundreds) of thousands of these exempt wells?  In other words, just because they're exempt from the filing requirements doesn't mean they're exempt from impairing senior water users. 

The Kansas impairment process will pull any exempt water user into the priority system if and when there is ever a supply problem.  The issue for me now becomes:  If I'm going to put down new roots or build my new house, farm headquarters, business or whatever, I'm pretty sure I want to know more about my water supply than "I hope my unrecorded priority date and quantity can survive an impairment action".  This is taken care of in Kansas as well, because while domestic water uses are currently exempted from filing, they are allowed to file and come into the priority system if they choose to.  A much better choice for many.

Now, do you still think exempt wells are a problem?

If you do, how should they be addressed?

Should the state grandfather in all existing exempt wells and then require, as of a date certain, every future water use to meet the state's development criteria?  New uses would always have access to the market to purchase or lease small portions of existing water rights if no new appropriations can be approved.  When that time comes, would there be willing sellers?  At what price?

Should all currently exempt wells be located and retroactively brought into the current water rights system - knowing that in many locations the most junior of these may not survive an administrative action?  Keep in mind the sheer number of these kinds of wells.  Do you give abandoned wells priority too?
Should we let the courts decide - like is about to happen in New Mexico? Will that decision, whatever it is, spill over eventually to other western states?

While we still have the exempt well issue even here in GMD 4, I'm glad to report that we have addressed one aspect of this dilemma - that of exempt, non-domestic wells.  I have blogged about this earlier here:  small-use exemptions.  We no longer have any non-domestic, exempt water rights. 

Anyone that has solved this problem in mid-stream, I'd like to hear how you went about it.