Opinion 06-2

STATE OF IDAHO OFFICE OF THEAnORNEY GENERAL lAWRENCE G WASDEN ATTOR:-IEY GENERAL OPINJOt'" 06-2 Hand Delh'ered Honorable Bruce Newcomb Speaker of the House Idaho House of Representatives STATEHOUSE Per Request for Attorney General's Opinion Regarding Swan Falls Agreement and Idaho Code §§ 42-234(2) and 42-420 IA(2) Dear Speaker Newcomb: This opinion responds 10 the queshons in your letter dated February 27, 2006, regarding the effeet of Idaho Code §§ 42-234(2) and 42-420IA(2) on the use of natural flow to recharge the Easlern Snake Plain Aquifer. In order to respond to your questions, it 1S first necessary 10 review the Swan Falls Agreement and to then consider the effect, if any, of Idaho Code §§ 42-234(2) and 42-4201A(2) on the Swan Falls Agreement, The questions presented are set forth below. QUESTIONS PRESEJ'IITED I. Is aquifer recharge a use to which Idaho Power Company subordinated its hydropower water rights under the Swan Fans Agreement? 2. If Idaho Power Company subordinated its water rights to recharge under the Swan Falls Agreement, do the provisions in Idaho Code §§ 42-234(2) and 42-420IA(2) change the Swan Falls Agreement and create any vesled rights or priorities in Idaho Power Company? CONCLUSIONS L Under the Swan Falls Agreement, Idaho Power Company subordinated its hydropower water nghts in excess of the agreed-upon minimum flows to all P.O. Bo> $3120, 801M. I<OMIo $312().(1()10 T_: {2M) 33<·2400, FAX: (2<ll!! :>lo'-Z5oJO 1.<»0,..,.1 700 W. Jd.....". S'_. SuIto ~,o Honorable Bille.: Kewcomb Page - 2 "subsequent beneficial upstream uses upon approval of such uses by the State in accordance "Ith State law:,1 regardless of the type or Idnd of beneficial use. Thus, the hydropo....er rights referenced in the S....1Ill Falls Agreement are subordinated to aquifer recharge in accordance with stale [3". 2. Idaho Code §§ 42·234(2) and 42-4201.4,(2) does not create any \'esled rights or priorities in Idaho Power Company because the State, as trustee, holds legal title to the water placed in truSI and, in accordance with the Swan Falls Agreement, the State has the right to detennine how the trust water will be used. Idaho Code §§ 42-234(2) and 42·420IA(2) create only an incidental stamtory benefit in favor of Idaho Power thut the Stale is free to modify or rescmd at any time. ANALYSIS I. THE SWA~ FALLS AGREDIE~T DOES J"OT LIMIT THE TYPES or BEXEFICIAL USES FOR \\"FIICH THE TReST WATERS ~lAY BE ALLOCATED You ha\-e asked whether aqwfer recharge is a use to which Idaho Po"er Company (-Idaho Power") subordinated its .... ater rights under the Swan Falls Agreement. This question raises the issue of .... hether the Swan Falls Agreement limits the subordination of Idaho Power's water rights to any panicular types or kinds of beneficial uses, and therefore categorically excludes OlhC'r uses for purposes of subordination. These issues prescnt a question of the interpretation of the Swan Falls Agreement. The objective in interpreting a contract such as the Swan Falls Agreement is to give efTect to the panics' intentions, which should be ascenained from the language of the contract, if possible. Tollev v. THI Co., 140 Idaho 253, 260, 92 PJd 503, 510 (2004). The contract must be viewed as a whole and in its entirely. Clear Lakes Trout Co.. lne- v. C1C3f Springs Foods, Inc., 141 Idaho 117, 120, 106 P.3d 443, 446 (2005). If itS terms arc: clC3f and unambiguous, their meaning and legal effect arc: queSlions of Ia.... controlled by the plain meaning of the words. Id. If the contracrual language is ambiguous, me panks' mlent may be determined from the facts and circumstances SU1TOunding the fonnatton of the conlrllCt, Id Contracruallanguage is ambiguous if it is reasonabl)' susceptible 10 conflicting interpretations. Maroun v_ W\'teless Systems, Inc_. 141 Idaho 604, 614,114 P.3d974, 984 (2005). , "AgrttTTlCnt" executed by the Governor, the Anomcy General and the Cb,efExecuD'1: Officer of Idaho Po"·er Company on October 15, 19S4, [or p"IpOSCS of resolving the litigation regarding Idaho Po,,'er Company's ",ater rights II Swan Falls dam (the "Swan Falls Agreement") at 4, '11(B) Honoroble Bruce ~ewcomb Page - 3 As distussed below, the plain tenns of the Swan Falls Agreement tompel the conclusion that Idaho Powe:r subordinated Its hydropower water rights to all furure beneficial uses, including but nOllimited to aquifer recharge. Testimony gIven by Idaho Power's legal counsel in Idaho legislatl\e hearings tonfirm the plam terms of the Swan Falls Agreement. A. The Terms oflhe Swan Falls Agrtemenl I. Qverview of the Sll,an Falls Agreement The Sll,an Falls Agreeme:nt had its origin in litigation over whether Idaho Power's water rights for its hydropower generation facilities on the Snake RIver had been subordinated 10 beneficial upstream uses. The Idaho Supreme Court beld that Idaho Power had e:<pressly subordinated its water rights at its Hells Canyon dams but not at the Swan Falls dam. Idaho Power Co, v. Dent. o(Water Resources, 1M Idaho 575, 586, 661 P.2d 741, 752 (1983). The court also held, however. that the mere lack of an express subordination provision in the Swan Falls water rights licenses did not mean that the water rights were unsubordinated, and remanded the case for consideration of the extent to which Idaho Power may have subordinated or othef\Vise lost its Swan Falls water rights under a variety of theories advanced by the Slate and other parties to the case. /d. , at 583, 590, 661 P.ld at 749, 756.- The parties resoh'cd Ihis litigalion by agreeing that a portion of Idaho Power's hydropower water rights would be held in tl\lst by the State of Idaho and that hydropower usc of the trust water would be subordinated to subsequent beneficial upstream uses approved by the State in accordance Il';th state law. This solution was a compromise between the State's desire to have Immediate and complete subordmation of Idaho Power's hydropower water rights and Idaho Power's desire to retain full OWT1~hip and use of itS hydropower water rights until a new beneficial upstream usc of the w"ater was approved by the Idaho Deparunent of Water Resources. It is against this backdrop that the subordination provision of the Swan Fans Agreement mUSI be construed, 2. The: SubordinatjoD Provision The parties to the Swan Falls Agreement viewed it as providing "a plan best adapted to de\<elop. conserve, and utilize the water resoun:es of the region in the public interest:' Agreement at 5, "' II. This was to be achie:vcd largely through the subordination provision of the Agreement. Miles v. Idaho Power Co" 116 Idaho 635, l Thesc theories includ.d aban<1onmem, (orfcjlU~, advCl"SC possession, cqwlllble estoppel, and CUSIOmary preferencc. !d. Honorable Bruce Newcomb Page _4 637,778 P.2d 757, 759 (1989) ("[t]he purpose of the [Swan falls] agreement concerning subordination was to make more water available for furore appropriators and to assist in the expansion of other beneficial uses of the water in the Snake River"). The subordination provision established cenain minimum flows) and provided that water accruing to Idaho Power', hydropower water rights above these minimum flows would be held in trust by the State of Idaho for "subsequent beneficial upstream uses": The Company is also entitled to use the flow of the Snake River at its facilities to the extent of its actual beneficial use but not to exceed those amounts stated in State Water License Numbers [recitation of the applicable water right license numbers], bllt such rights in excess of the [minimum flow] amounts stated in 7(A) shall be subordinate to subsequent beneficial upstream uses upon approval of such uses by the State in accordance WIth State law Wlless the depletion violates or will violate paragraph 7(A). Company retains its right to contest any appropriation of water in accordance with State law. Company further retains the right to compel State to take reasonable steps to insure the average daily flows estabhshed by this Agreement at the Murphy u.s,a.s. gauging station. This paragraph shall constitute a subordination condition. Agreement at 3, ~ 7(8) (emphasis added). The subordination language is straightforward. The Agreement expressly provides for sllbordination to "subseqllenf' beneficial upstream uses "upon approval of sllch uses by the State." These tcnns explicitly require subordination to beneficial uses approved after the execution of the Agreement. In the absence of any textual limitation to the contrary, the most natural reading of th1s language is that it includes not only new diversions for established types of beneficial uses, but also diversions for new types of beneficial uses recognized and approved in accordance with State law. It is a given that State law is not static and changes over time, and this is particularly true with respect to what uses of water constitute "beneficial uses."' See Dept. of Parks v. Idaho Dept. of Water Administration, 96 Idaho 440, 447-48, 530 P.2d 924, 931-32 (1974) ("With the exception of the uses implicitly declared to be beneficial by Anicle 15, § 3, there is I The agreed-upon minimums are a\'erage daily flows of 3,900 c.f.s. from April 1 to O<:tol>er 31, and 5,900 c,fs. from November 1 to Mar<;h 31, as measured at the U,S,G,S. Gauging Stalion below Swan Falls Dam and above Murphy, Idaho (the "Murphy Gauge"'). Swan Falls Agreement at 3, 7(Al. The Swan Falls Agreement contains lhree express subordinarion provisions, Agreement al 3-4, '; 7(B)-{D), Two of these subordinale<l tdaho Po,,'er"s "'aler rights to cerrain junior uses that actually exisle<1 or were in the process of being perfected as of the dale of Ihe Agreemem and are not directly relevant to Ihe queslion presented. !d. at 4. ~ 7(C}.(tl). Honorable Bruce Newcomb Page· 5 always a possibl1ity that other uses beneficial in one era will nol be in another and vice versa") (Bakes, J., concurring specially). Thus, undcr the plain terms of the Swan Falls Agreement, if a proposal to appropnale water for aquifer rechargc is approved by the State as a beneficial use in accordance wllh state law, the hydropower water nghts held in trust are subordinated to such use, B, The Legislative Hislory of the Slatutes Implementing the Agreement While thc Agreement is unambiguous, it is worth noting that the history of the leglslahon the parties proposed to implement the Swan Falls Agreement also shows that subordination was not intended to be limited to any panicular type or category of beneficial use." The testimony of Idaho Power's legal counsel in comminee hearings on Senate Bill 1008, the centerpiece of the proposed Swan Falls legislation, demonstrates particularly well that Idaho Power understood the Agreement included all types of beneficial uses subsequently recognized by state law. He testified before the Senate Resources & EnVironment Committee that "[t]he Company feels it is critical hydropower be recognized as an element in consideration of new water uses that affect the river abeve Murphy. It is importam that the statute and the contract do not prohibit developmcnt." Minutes of the Idaho Senate Resources and Environment Comm., Jan. 18, 1985, 48th Sess. (ldaho 1985) CMinUles of Jan. 18, 1985") at 2 (testimony of Tom Nelson) (cmphasis added), Similarly, at a subsequent hearing, Idaho Power's counsel stated that "[a]nylhing above the minimum flow the Slate is free to do as it likes," and that "[o]fcourse one of the big questions is what will future uses be of the remaining water." Minutes of the Idaho Senate Resources and Environment Comm., Feb, I, 1985, 48th Sess. (Idaho 1985) ("Minutes of Feb. 1, 1985") at 7, 9 (Nelson testimony), These statements reveal that the panies intendcd to provide for subordmation of the truSt water to all future beneficial uses approved in accordance with state law. The statements of Idaho Power's counsel take on even more significance in light of the fact that the future usc of trust water for aquifer recharge was an obvious possibility at the time of the Agreement. Statutes authorizmg aquifer recharge, albeit on a hmited basis, were first enacted in 1978, some SIX years prior to the Swan Falls , See Agreement at 2,3, 6; ,J. lit 8, 11 t3(A}(vii) (agreein8lo propose and support a legislative program implementing the Agrcemenl and condilioning effecliveness of lhe subordinalion provision on the enactment of corresponding subordination legislalion); id. al Exhibits t-8 (the proposed legislation). The proposed subordination legislalion was enacled substamiaHy as proposed and is codified al Idaho Code §§ 42,2038 and 42·203C. Honorable Bruce Kewcomb Page - 6 Agreement. See Idaho Code §§ 42-4201 el seq. Indeed. the 1978 aquifer recharge SlalUleS invoked the same -multiple use water policy of this state" thaI the parties explicilly recognized in 1984. 19-8 Idaho Session La....'S. ch. 293. § I; Idaho Code § 42- 4201(1) (emphasis added); see also Agreement at Exhibit I. pp. 3-4 ("'the promotion of full economic and multiple use de-.-e\opment of the water resources of the State of Idaho") (emphasis added),s Fw1her. aquifer recharge had been recognized as a ''beneficial usc- in other states for se\'eral years. See McTaggart v. Montana Power CQ., 602 P.2d 992, 996 (Mont. 1979); Qahe Conseryancv Subdistrict v. Janklow, 308 N.\V.2d 559, 564 (S,D. 1981). In this context. the absence of any evidencc that the panies inlended to exclude subordination to aquifer recharge mUSl be underslood as meaning lhat the panies were aware that aquifer recharge would potenlially trigger subordination under the Agreement in Ihe future. II. mAHO CODE §§ -12-234(2) A.'\'D 42-420IA(]:) DO :'\OT CREATE Alii''' VESTED RIGHTS OR PRIORITIES I:" IDAHO POWER COi\IPA:'\'Y Idaho Code § 42-234 declares that the appropriation and underground storage of unappropriated water for purposes of ground luter recharge is a beneficial use, and authorizes die Department of Water Resources to issue permits 10 appropriate for such uses. The SlalUle also provides thai such rights are secondary to prior perfected rights, including those thai might otheT\\lse be subordinated by the Swan Falls Agreement: The rights acquired pursuant to any pennit and license obtained as herein authorized shall be secondary to all prior perfected water righls, including those water rights for power purposes Ihal may otherwise be subordinated by comract entered into by the governor and Idaho power company on October 25, 1984, and ralified by the legislature pursuant to section 42- 2038, Idaho Code. Idaho Code § 42-234(2).' Idaho Code § 424201.'\(2) is identical in re!e\'ant pan. By their terms. these SlalUtes make a licensed righl to beneficially use water for underground storage or aquifer recharge secondary to the hydropower water rights held in truSl by the State of Idaho under the Swan Falls Agreernenl. Thus, Ute question is ....itether the StalUtes gi\-e rise to • Presently codified at Idaho Code § 42.20Je. • The language of Idaho Code §§ 42·234(2) and 42420IA(2) is an express ad:lIOwledgemenl lbal lbe subordination proviSIon "''Guld apply to aquifer recharge in the absence of lbe 1994 change 10 the statutes making recharge use secondary 10 hydropov.·er use under lbe SWlllI FaUI Agreemenl. Honorable Broc~ Newcomb Page - 7 any vested rights in Idaho Power Company that pennanently tromp the subordination provision of the Swan Falls Agreement. Under the plam language of the Agreement and the relevant legislative history, the answer to this question is clearly "No," for two reasons: (I) the State holds legal title to the subordinated portion of the hydropower water rights in trust for the people of the State of Idaho and Idaho Power, and (2) as part of the Swan Falls Agreement, Idaho Power bargained away any right to assert a vested right In the truSt water. The Agreement and the Implementing legislation resolved the Swan Falls litigation principally by transferring legal title to a portion of Idaho Power's hydropower water rights to the State, whieh holds the rights in trust for the benefit of the people of the State of rdaho and Idaho Power. Agreement at 8, 13(t\)(vii); id, at Exhibit 78; Idaho Code § 42-2038. Hydropower use of the trust water IS subordinated to subsequent beneficial upstream uses approved by the State in accordance with state law. 1d. A Statement of Legislative Intent for Senate Bill 1008, the centerpiece of the legislation proposed and enacted to implement the Swan Falls Agreement, was prepared and read into the Senate Journal and describes the trust as follows: [T]his trust arrangement results in the State of Idaho possessing legal title to all water rights previously claimed by Idaho Power Company above the agreed minimum stream flows and Idaho Power Company holds equitable title to those water rights subject to the trust. The Idaho Department of Water Resources is the entity which makes the detennination of whether water is to be reallocated from the trust under the criteria of Section 42- 203C and in compliance with the State Water Plan. The Company's rights may be asserted by the state, as trustee, and by Idaho Power Company, as beneficiary of the trust, and as the user of the water right. Idaho Power Company is not the sole beneficiary of the trust, however, Future appropriators, as persons on whose behalf the trust waters are held, may seek to appropriate the trust waters in confonnanee with State law. The State acts as trustee In thcir behalf as well. At such time as a future appropriator is granted a water right in the trust waters, Idaho Power Company's rights in such appropriated water become subordinated. Statement of Legislative Intent S 1008 ("Statement of Legislative Intent"), JOURNAL OF nlE STATE SEKATE, 48th Sess. (Idaho 1985) at 58-61, 60; see also Minutes of Jan. 18, 1985 and Minutes of Feb. I, 1985 (testimony by Idaho Power's legal counsel descnbmg the trust arrangement). Thus, the State, as trustee, holds legal title to the hydropower water rights referenced in the Swan Falls Agreement to the extent they exceed the agreed-upon Honorable Bruce Newcomb Page· 8 minimum flows, and has the authority to manage the trust water for the benefit of the people of the State of Idaho and Idaho Power. Under the Agreement and the implementing legislation, Idaho Power surrendered its legal title and control of the water rights above the minimum flows. Idaho Power retained only an equitable interest in the use of the trust water \lnILl such time as the State approved a subsequent beneficial upstream use in accordance with state law. Thus, as trustee, the State has exclusive authority to detennine how the trust water will be allocated. This understanding is supported by the express language of the Swan Falls Agreement, which provides that other than the legislative program that implemented the Agreement, legislation enacted after the effective date of the Agreement has no effect on 11: This Agreement is contingent upon certain enactments of law by the State and action by the Idaho Water Resource Board. Thus, within this Agreement, reference is made to state law in defining respective rights and obligations of the parties. Therefore, upon implementation of the conditions contained in paragraph 13, any subseguentfinal order bv a court of competent jurisdiction. legislative enaClment or administrative ruling shall not affect the validitv of this Agreement. Agreement at 8, ~ 17 ("Subsequent Changes in Law") (emphases added). In other words, the parties expressly agreed that legislation passed after the Agreement became efTe<:live would not void the Agreement or change the parties' rights and obligations as estabhshed by the Agreement. Part of the contractual agreement was Idaho Power's acceptance of beneficial upstream uses upon approval of such uses by the State in accordance with state law. The language in Idaho Code §§ 42-234(2) and 42-420IA(2) regarding the Swan Falls Agreement was enacted some ten years after the Agreement was signed. See Idaho Session Laws 1994, ch. 274, § I, p. 851; id. ch. 433, § I, p. 1397. These statutes reflect a policy decision at the time to treat aquifer recharge as a secondary use, But, as noted above, the state as trustee is free to change the policies regarding the use of the water held . , III trust. This interpretation accords with the parties' intent as revealed by the legislative history of SB 1008, In testimony before the Senate Resource and Environment Committee. Idaho Power's atlomey left no doubt that the Agreement ultimately controls , Ollce a subsequent beneficial upslream use becomes a vested right, the waler subject to thai right is no longer pan of the trust water. Honorable Bruce Newcomb Page - 9 subordination, and that statutorily increasing the amount of water actually available 10 Idaho Power merely creates an incidental benefil that the State is free to modify or rescind at any time: Senator Crapo: Tom Nelson: Senator Peavey: Tom Nelson: Senator Peavey: With regard to the ponion of the contract that says thai subsequem legislative changes don't impinge on the conlract. Would you clarify, what subsequent legislative changes would do to the status of [the] Idaho Power water right with regard to changes in minimum flow? As the comract and Ihe statute work together, the state could obviously increase the minimum flow al Murphy anytime they wanled. The Company would han~ no rights involved in that deciSIOn. If the slale wanted to reduce that minimum flow below the seasonal 3900 and 5600 it certainly is at liberty to do that. However, Ihe comractual recognition of the Company's water rights at that level would remain at those le\'els and therefore the Company's rights would not follow the minimum flow down in that instance, The contract would still define it as Ihe seasonal 3900 and 5600. What would be the flip side of Senator Tominaga's scenario in case the state wanted to raise the minimum flow? How would that work and would there be any problems? In a situation where Ihe state raised the minimum flow, the Company's subordinated rights would remain at 3900 and 5600. However, that increase would then make the company the beneficiary of that increase [sic] flow and I as read both what we have as those minimum flows operate, the company would be a beneficiary of the higher flow and entitled to protect it or to try and make the state enforce it if it raised the flow but at the same lime didn't put mechanisms in place to really make it work. When you say "to protect the new higher minimum flow,"' you aren't saying then thai the Slate couldn't after it had done that. relower that to 3900, that would be at the state's option, would it not? Honorable Bruce Kewcomb Page - 10 Tom ~elson: You are right. Anything above the minimum flow the state is free to do as it likes. Minutes of Feb. I, 1985, at 3, 7.8 In the February II, 1985, hearing. Senator Little asked Idaho Power's legal counsel that if "two years from now we don't like [all these bills fulfilling the Agreement] and pans arc repealed, will that affect the agreement madc between the power company and the Statc.·· Minutes of the Idaho Senate Resources and Environment Comm, Feb. II, 1985, 48th Sess. (Idaho 1985) at I. Idaho Power's counsel replied: [T]here is a provision in the agreement that says the agreement remains binding even m the face of changes in the law. If the legislature wants to undo this whole thing next year, that is its prerogative. The only thing the legislature docs not have power to do, would be to change the contractual recognition of thc company's water rights at Murphy gage [sic]. Jd. (Nelson testimony). Legal counsel for the Office of the Anomey General testified dunng the same hearing in regard to the general trust concept that "the ultimate control over those trusts does reSt with the Legislature. They created those trusts and of course they can alter them or take whatever steps are necessary." /d. at 12 (testimony of Pat Kale). Idaho Power's attorney then testified with regard to hydropower watcr rights placed in truSt under Idaho Code § 42-2038 that "[i]fyou were subordinated you would ha\'e no right to compensation and it is solely the Director's discretion as this is v,Titten to implement the constitutional provision'· Id. at 13 (Nelson testimony). These exchanges demonstrate that the panies intended the Agreement to control the parties' rights and obligations wilh rcspeci to subordination of the trust water, regardless of subsequent changes in Stale law. See also Statement of Legislative Intent at 59 ("While the State may later change the minimum Dows, the recognition of the nature of the company's rights will not change"); Minutes of Jan. 18, 1985 at 18-19 (written testimony of Attorney General Jim Jones at 5-6) ("If the public interest criteria is not, aftcr trial and error, precisely what the legislature desires, the standards can be changed I Likewise. when discu,singme rC:>eI'yalion of 150 cubic feet per second Mme trusl water for domestic. commercial and industrial uses before the Senale Resources and En"ironment Commitlee, Idaho Power', attorney testified. "it is essentially a reservation pf that much water fpr mpse purposes and subject alway; to change by me Waler Board as it finds out if it is too high or 100 low.'· Minutes of Jan. t8. 1985. at 5 (Nelson testimony). Honorable Brucc Kcwoomb Pagc·]] without affccting this agreemcnt, state lcgal ownership of the watcr rights involved and the trust arrangemcnt established"). It was underSlOod that subsequent changes in state law would not redllce or enhance the State·s authority over the trust water or the rights established by the Agreement. Just as the State cannot reduce Idaho Power's rights under the Agreement with regard lO the unsubordinated portion of the hydropower water rights, Idaho Power is SImply an incidental beneficiary of any State law governing the trust water. This aspect of the Agreement is crucial, because the overarching intent was lO put control of the reallocation of the trust water in the State's hands, and to provide the State with the flexibllity necessary to promote full economIC and multiple use development of the water resources of the Snake River system. See also Minutes of Jan. 18, 1985, at 18-19 (Jones testimony at 5-6); Agreement at Exhibit I. It is thus evident that any subsequent changes in statutory language such as the relevant portions of Idaho Code §§ 42-234(2) and 42-420IA(2) do not trump the Swan Falls Agreement for purposes of subordination or give rise to a right of compensation regarding use of the trust water. These statutes may have worked to Idaho Power's benefit but the legislature has the authority to change this policy at any time. Nothmg in the legislative history of Idaho Code §§ 42-234(2) and 424201A(2) can be VIewed as requiring a different conclusion. The only reference to the Swan Falls hydropower rights in the legislative history of the recharge statutes is a single statement by a representativc of the Idaho Water Users Association that the language regarding privately owned elenrical generating companies was ··to prOtect and verify the agreement on Swan Falls." Minutes of the Senate Resources & Environment Comm_. March 9, 1994, at 1 (testimony of Sheri Chapman). This statement is essentially meaningless for purposcs of interpreting the Swan Falls Agreement, because, as the statement recognizes, the Agreement speaks for itself. and by its terms is fully integrated and sets forth all of the panies' understandings. Agreement at 9, 19. further, the statemem was made by a non-pany ten years after the Agreement was executed. and cannot be newed as probative or rellable for purposes of dctennining the mtent of the panies at the time they executed the Agreement. See Pinehaven Planning Bd. v. BrOQks, 138 Idaho 826, 829, 70 P.3d 664, 667 (2003) ('"the Coun must detennine the intent of the partIes at the time the instrument was drafted'·). III. CONCLUSION The plain tenns of the Swan Falls Agreement, as well as the facts and circumstances surrounding the Agreement, conclUSIvely demonstrate the panies' intent Honorable Bruce Newcomb Page - 12 that the hydropower water rights held In \nIst by the Slate would be subordinated to all beneficial upstream uses appro\"ed in accordance with State law, including aquifer recharge. The Agreement and implementing legislation also demonstrate that the provisions in Idaho Code §§ 42-234(2) and 42-420IA(2) regarding the Swan Falls Agreemem only created an incidental benefit in favor of Idaho Power, and did not give rise to any vesled rights or priorities. AUTHORITIES CONSIDERED I. Idaho Code: § 42-2038. § 42-203C. § 42-234. § 42-4201 § 42-420IA. 2. Idaho Session Laws: 1994, chapter 274, § 1. 1994, chapter 433, § I. 1978, chapter 293, § I. 3. Idaho Cases: Clear Lakes Trout Co., Inc. v, Clear Springs Foods, Inc, 141 Idaho 117, 106 P.3d 443 (2005). Dept. of Parks v. Idaho Dept. of Water Administration, 96 Idaho 440, 530 P.2d 924 (1974). Idaho Power Co. v. Dept. of Water Resources, 104 Idaho 575, 661 P.2d 741 (1983). Maroun v. Wvreless Systems, Inc.. 141 Idaho 604,114 P.3d 974 (2005). Miles v. Idaho Power Co.. 116 Idaho 635, 778 P.2d 757 (1989). Pinehaven Planning Bd. v. Brooks, l38 Idaho 826, 70 P.3d 664 (2003). Tollev v. THI Co., 140 Idaho 253, 92 P.3d 503 (2004). Honorable Bruce Kewcomb Page - 13 4. Other Cases: McTaggart Y. Montana Power Co., 602 P.2d 992 (Mont. 1979). Oahe Conservancy Subdistrict v. Janklow, 308 N.W.ld 559 (S.D. 1981). 5. Other Authorities: "Agreement" (Oct. 25, 1984) (the "Swan Falls Agreement"). JOURJ'-'AL OF THE STATE SEI'ATE, 48th Session (Idaho 1985). Minutes of the Idaho Senate Resources and En\'ironment Commitlee, 52nd Session (1994), Minutes of the Idaho Senate Resources and Environment Commitlee, 48th Session (1985). rEI DATED this day of March, 2006, G---0i""C+- LAWRE:\CE G. WASDEN Atlomey General Analysis by: CLIVE J. STRONG MICHAELQRR Deputy Attorneys General