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In 1986, the State of Wyoming enacted legislation defining "instream flow" as a beneficial use of water and stipulated how instream flow water rights would be filed, evaluated, granted or denied, and ultimately regulated (Wyoming Statutes at Section 41-3-1001 to 1014). The law allows for instream flow water rights to be filed and granted on unappropriated water originating as natural flow or from storage in existing or new reservoirs. For natural flow sources, the flow amount is defined as the minimum needed to "maintain or improve existing fisheries". The language relating to stored water is slightly different, defining the minimum needed to "establish or maintain new or existing fisheries". Instream flow is generally considered a nonconsumptive beneficial use.
The WGFD first selects the stream segment on which to file for a right. This is done using biological reports, knowledge of the fisheries, and stream flow models, along with determination of how much flow will be required. The WWDC then applies for the appropriation. The WWDC must also conduct a hydrologic study to determine whether the instream flow can be provided from the unappropriated natural flow of the stream or whether storage water from an existing or new reservoir will be needed for part or all of the instream use. The WWDC study is then supplied to the State Engineer for his consideration.
After receiving reports from the WGFD and WWDC, the State Engineer may conduct his own evaluation of the proposed appropriations for instream use. Before granting or denying a permit for instream flow in the specified stream segment, the State Engineer must conduct a public hearing and consider all available reports and information. In the past, public involvement has ranged from very little
to quite significant. Following the public input period, the State Engineer decides whether or not to approve, approve with modifications, or reject the application. If granted, an instream flow permit can contain a condition for review of continuation of the permit at a future time. Also, the WWDC is named as holder of the permit.
The instream flow appropriation goes into effect the date the State Engineer approves the permit. The water right cannot be adjudicated by the Board of Control for three years thereafter. An instream water right has a priority date as of the date the application was received and recorded by the SEO, and all senior priority water rights must be recognized in administration of the stream. Only municipalities can condemn an instream flow right. However, within one mile of the state border, the water for an instream flow right is still open to appropriation. This allows for additional utilization of water prior to the flow leaving the state. Existing water rights cannot be condemned for instream flow; however, they can be gifted to the State for instream use. This has not yet happened. Regulation of water rights on a stream must be called for by the WGFD with the request proceeding through the WWDC. Instream flow rights do not ensure ingress and egress rights to the stream for public use; however, the WGFD has tried to ensure that the segments with instream rights have public access as well. Also, these rights cannot be issued if they will limit Wyoming's use of water with respect to interstate compacts.