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October, 4, 2012 BOARD MATTER H-4 ACTION: Consider issuance of Warranty Deed on behalf of the Wyoming

Water Development Commission to the Platte River Recovery Implementation Foundation.

AUTHORITY: WYO. STAT. ANN. § 36-2-101 BACKGROUND:

In the 1980s, the State of Wyoming planned to build Deer Creek Reservoir southwest of Glenrock, Wyoming, in the North Platte River Drainage. The reservoir would provide storage water that growing Wyoming municipalities could purchase and use as supplementation in the event that senior water rights downstream on the North Platte River ever made a call on the municipalities’ rights.

Building the new reservoir required a 404 permit from the U.S. Army Corps of Engineers (the Corps), and Wyoming had to provide habitat mitigation to get the permit. In 1988, Wyoming, through the Water Development Commission, purchased two properties along the Platte River in central Nebraska (Nebraska Property) to provide species habitat. See Exhibit A (warranty deeds for the Nebraska Property). After Wyoming bought the Nebraska Property, the Corps issued Wyoming the 404 permit. However, the Nebraska v. Wyoming lawsuit on the North Platte River prevented Wyoming from continuing to develop or construct Deer Creek Reservoir. Eventually, the parties to the lawsuit agreed, as a term of settlement, to allow an alternative project to go forward: the Pathfinder Modification Project. By modifying the spillway of the Pathfinder Dam, Wyoming could increase Pathfinder Reservoir’s capacity, creating a new “Wyoming Account” of storage water that Wyoming municipalities could use, and an “Environmental Account” of water that Wyoming could use as contribution to the Platte River Recovery Implementation Program (PRRIP).

The PRRIP is a cooperative program primarily between Wyoming, Colorado, Nebraska, and the United States Fish and Wildlife Service and Bureau of Reclamation to address the needs of endangered and threatened bird and fish species on the Platte River in central Nebraska (the same species and habitat that Wyoming originally purchased the Nebraska Property to help). The PRRIP officially launched in 2007, but it was the product of years of development that began during the Nebraska v. Wyoming lawsuit. As part of the Nebraska v. Wyoming settlement, the parties entered a stipulation allowing for the modification of Pathfinder Reservoir on the condition that the new storage would be used partially for Wyoming municipalities and partially for the PRRIP. The Pathfinder Modification Stipulation included the following statement:

10. Upon completion of the Pathfinder Modification Project, Wyoming will release the 404 permit and the water rights for the Deer Creek Project, a proposed and permitted reservoir with a capacity of approximately 66,000 acre feet and provide fee simple title to the 470 acres of habitat it owns in the critical habitat area in Central Nebraska to the USFWS or other entities as deemed appropriate by the USFWS. Nebraska will move to dismiss Jess v. West, No. 88-1-308 (D. Neb.).

See Exhibit B (excerpt from the Amended Pathfinder Modification Stipulation). The final settlement agreement for the Nebraska v. Wyoming litigation incorporated the Stipulation. The U.S. Supreme Court adopted the final settlement agreement into the Modified North Platte Decree. Nebraska v. Wyoming and Colorado, 534 U.S. 40, 40 (2001). The Supreme Court’s adoption of the settlement effectively makes the agreement and its incorporated pieces, including the Pathfinder Modification Stipulation, a Supreme Court order.

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The Wyoming Water Development Commission began construction on the Pathfinder Modification Project in 2010. The work on the project is now largely complete, and Pathfinder Reservoir was able to successfully fill both of the new accounts during the 2012 water year. The Pathfinder Modification Stipulation now requires Wyoming to finally put Deer Creek Reservoir to rest by releasing the 404 permit and water rights, and conveying the Nebraska Property to the United States Fish and Wildlife Service or its designee. The United State Fish and Wildlife Service has indicated to the Wyoming Water Development Commission that the Nebraska Property should be conveyed to the PRRIP’s Foundation, the Platte River Recovery Implementation Foundation (PRRIF), which holds title to the other habitat properties owned and managed for the PRRIP. DISCUSSION: The Wyoming Water Development Commission (Commission) currently holds title to the real estate described in Exhibit “A”. The Commission does not have explicit statutory authority to sell or otherwise dispose of real estate for the State of Wyoming. Pursuant to the Wyoming Constitution Article 18, Section 3, the Wyoming Board of Land Commissioners may dispose of state lands on behalf of the State of Wyoming and the Wyoming Water Development Commission. The Modified North Platte Decree, incorporating the Final Settlement Stipulation, see Exhibit “B”, Nebraska v. Wyoming and Colorado, 534 U.S. 40, 40 (2001), orders that: “Upon completion of the Pathfinder Modification Project, Wyoming will . . . provide fee simple title to the 470 acres of habitat it owns in the critical habitat area in Central Nebraska to the USFWS or other entities as deemed appropriate by the USFWS”. The Pathfinder Modification Project is now complete. The United States Fish and Wildlife Service, United States Department of the Interior, deems it appropriate that Wyoming convey fee simple title to the lands it owns in the critical habitat area in Central Nebraska, described in Exhibit “A” to the Platte River Recovery Implementation Foundation, a Nebraska Nonprofit Corporation, Trustee, until such time as the Platte River Recovery Implementation Foundation dissolves. DIRECTOR’S RECOMMENDATION:

The Director recommends the Board of Land Commissioners approve the issuance of Warranty Deed from the Board of Land Commissioners, on behalf of the Wyoming Water Development Commission, Grantor, to the Platte River Recovery Implementation Foundation, a Nebraska Nonprofit Corporation, Trustee, as Grantee, the property described in Exhibit “A”.

BOARD ACTION: WITHDRAWN

DRAFT – September 5, 2012

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WARRANTY DEED

WHEREAS, the Wyoming Water Development Commission for the State of Wyoming currently holds title to the real estate described in Exhibit “A” attached hereto; and

WHEREAS, the Wyoming Water Development Commission does not have explicit

statutory authority to sell or otherwise dispose of real estate for the State of Wyoming; and

WHEREAS, pursuant to the Wyoming Constitution article 18, section 3, the Wyoming Board of Land Commissioners “subject to the limitations of this constitution and under such regulations as may be provided by law shall have the direction, control, disposition and care of all lands that have been heretofore or may hereafter be granted to the state”; and WHEREAS, the Wyoming Board of Land Commissioners therefore may dispose of state lands on behalf of the State of Wyoming and the Wyoming Water Development Commission; and WHEREAS, the Modified North Platte Decree, incorporating the Final Settlement Stipulation, see Nebraska v. Wyoming and Colorado, 534 U.S. 40, 40 (2001), orders that: “Upon completion of the Pathfinder Modification Project, Wyoming will . . . provide fee simple title to the 470 acres of habitat it owns in the critical habitat area in Central Nebraska to the USFWS or other entities as deemed appropriate by the USFWS”; and WHEREAS, the Pathfinder Modification Project is now complete; and WHEREAS, the United States Fish and Wildlife Service, United States Department of the Interior, deems it appropriate that Wyoming provide fee simple title to the lands it owns in the critical habitat area in Central Nebraska, described in Exhibit “A” attached hereto, to the Platte River Recovery Implementation Foundation, as evidenced by the letter attached hereto as Exhibit “B”;

THEREFORE, the State of Wyoming, Board of Land Commissioners, GRANTOR, for the Wyoming Water Development Commission, in consideration of one dollar ($1.00) and other valuable consideration, conveys to GRANTEE, Platte River Recovery Implementation Foundation, a Nebraska Nonprofit Corporation, Trustee, who will hold title until such time as the Platte River Recovery Implementation Foundation dissolves according to the laws of the State of Nebraska, and then to United States Fish and Wildlife Service, United States Department of the Interior, the following described real estate (as defined in Neb. Rev. Stat. 76-201):

See attached Exhibit “A” GRANTOR covenants with GRANTEE that GRANTOR:

(1) is lawfully seised of such real estate and that it is free from encumbrances except easements and restrictions of record;

(2) has legal power and lawful authority to convey the same; and (3) warrants and will defend title to the real estate against the lawful claims of all

persons.

DRAFT – September 5, 2012

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DATED this _____ day of ____________, 2012. SEAL STATE OF WYOMING

_______________________________________ Matthew H. Mead, President

Board of Land Commissioners Countersigned:

_______________________________________ Ryan M. Lance, Secretary

Board of Land Commissioners STATE OF WYOMING ) ) ss: COUNTY OF LARAMIE ) This Warranty Deed was acknowledged before me on ____________________, 2012, by Matthew H. Mead, President, for the State of Wyoming, Board of Land Commissioners. Witness my hand and official seal. _______________________________________ Notary Public My Commission Expires: _____________________ Attorney General's Office Approval As To Form ______________________________________________________ __________________ Justin Daraie, Assistant Attorney General Date