Divvying Atlantis: Who Owns the Land Beneath Navigable Manmade Reservoirs?

Abstract

I. INTRODUCTION For over a century, the federal government has been permitting dam-building on navigable rivers to create artificial reservoirs for irrigation, reclamation, and-electrical power. Congress has granted dam permits under various legislation to both utilities and federal agencies.(1) Many of these federally flooded lands, containing oil, natural gas, precious minerals, and shellfish, have growing value. In addition, these lands serve as habitat for fish, wildlife, and plants. This ripening underwater investment poses the question of who owns the artificial Atlantean domains: the utilities, the states, or the federal government? It presents an issue not yet confronted by any court. This, article advocates for state ownership of the artificial federal reservoir basins. It first reviews the origin of the issue -- why states might formulate such a claim. In Part II, this article reviews seven public policy considerations that support state ownership. Part III analyzes the legal arguments, considering first whether federal or state law applies. The article then considers the provisions of various state laws in sub-part B, and those of federal law in sub-parts C and D. II. BACKGROUND & QUESTIONS In general, each individual state owns the land beneath its rivers and lakes that are navigable at the time of statehood.(2) Describing this ownership, the U.S. Supreme Court has stated: Under English common law the English Crown held sovereign title to all lands underlying navigable waters .... When the 13 Colonies became independent ... they claimed title to the lands under navigable waters ... as the sovereign successors to the ... Crown. Because all subsequently admitted States enter the Union on an equal footing with the original. 13 States they too hold title to the land under navigable waters within their boundaries .... (3) Thus the states owned, and still own, the original riverbeds of navigable rivers.(4) But when a federal dam is built, artificially flooding adjoining dry land and creating an enlarged navigable waterway, who holds title to the newly submerged land? While the question could be argued legally several ways, people commonly assume that title remains in the dam builder who condemned it. This article argues otherwise: that ownership by the respective states is more persuasive, both legally and on the basis of public policy. In a case of first impression, the outcome will likely be shaped as much by public policy considerations as by application of the law.(5) Not all federal reservoirs were created by the same agency or even under similar statutes.(6) The principal statute, the Federal Power Act,(7) allows a licensee to obtain a permit from the Federal Power Commission, now the Federal Energy Regulatory Commission (FERC), to construct a dam on navigable waterways for generating electrical power. In many cases, however, reservoirs were authorized by special legislation.(8) To facilitate the task of building dams, all the applicable federal statutes empower each licensee to condemn or otherwise pay for the land to be flooded.(9) After reservoir completion, the licensees sell services such as electricity and irrigation water that, over time, pay for the cost of acquiring land and constructing the dam. Many dam licensees, since condemning the newly submerged lands, may have paid property taxes on the those lands, not including the original riverbeds which the licensees generally admit to be property of the respective states.(10) In all likelihood, however, few surveys have been conducted to locate or mark the banks of natural riverbeds beneath reservoirs. To what extent it would be technically possible now to identify historic riverbeds presents difficult factual considerations. Similarly, some states may have assessed taxes on dams and submerged lands on the basis of depreciated cost, while others may have used some other valuation. …