concurring in part and dissenting in part.
Water is too scarce, too precious a commodity in the arid west to do other than assure that it is the subject of highest and best use by all. The time for accommodation, mutual respect and reasonableness has arrived.
On the first issue, I would hold that a paper water right, one that has never been applied to practicable irrigable acreage or subsumed uses, may not be transferred to-instream flow. This holding would prevent the transfer of future water to instream flow as applied for and before us in this appeal.
The majority has held that Wyoming law governs future tribal water. It is hard to imagine that when the question of historical water is before us, that it would be governed by different law than that governing future water. Therefore, I disagree with the majority's implicit holding that change of use of any tribal water right (whether future, historical or a future right later applied to practicable irrigable acreage or subsumed uses) may not be to in-stream flow simply because Wyoming law allows only the state of Wyoming to own an instream flow right. Instead, I would hold that any historical water right or future water right applied to practicable irrigable acreage may be transferred to in-stream flow under federal law or rules and regulations adopted by the Tribes that may, within reasonable limits, be more liberal than Wyoming law.
On the administration issue, I do not agree that Wyoming law governs the administration of Indian water rights. Nor do I agree that the State Engineer should administer the tribal water rights to the exclusion of the Tribes. I would hold that they jointly administer the water rights on the reservation and, in the event of disagreement, must turn to the court for resolution of their dispute.
My opinion here rests primarily on what I believe ought to be done, rather than on what has been said and done in the past. Therefore I cite little established precedent. I do explain how basic principles of Western water law, common sense, and comity support my proposals.
I believe each side in the current controversy errs by leaning too far toward either state or federal law and control. Administration of Indian water rights is accomplished through a delicate and cooperative interplay between state and federal law. When the balance between these laws is tilted too far in either direction, it results in harm to the orderly system of management and fairness for all water users.
Use of Future Project Water for In-stream Flow
The majority opinion purports to address only “future project water,” that is, water that is quantified and included in the reserved right but not yet put to beneficial use. However, its holding that W.S. 41-3-1002(e) precludes a private instream flow right for the Tribes can be read as precluding dedication of existing irrigation rights as well. In addition, the majority notes in dicta that if the Tribes sought to change the use of a reserved water right to another use “permitted by law,” they would have to comply with our change of use statute, W.S. 41-3-104. Since I believe that the Tribes are free to promulgate their own standards for instream flow rights and for change of use which may, within reasonable limits, be more liberal than Wyoming law, I must dissent from these portions of the majority opinion.
I would hold, however, that future water may not be transferred to instream flow without first being put to beneficial use for *286irrigation purposes. My conclusion is bolstered both by the beneficial use concept and by the rule that reserved water rights are reserved only to fulfill the purposes of the reservation. United States v. New Mexico, 438 U.S. 696, 700, 98 S.Ct. 3012, 3014, 57 L.Ed.2d 1052 (1978).
The danger in the absolutist position that federal law governs all aspects of reserved rights is that carefully developed policies of state water law relating to particular conditions of water use may be ignored. One such policy in Wyoming and other Western states is the beneficial use concept. Beneficial use is the foundation of Western water law. It is incorporated into our constitution, which states that “[priority of appropriation for beneficial uses shall give the better right.” Wyo. Const. Art. 8, § 3.
It is true that the Tribes have a federal water right which is reserved and exempted from appropriation by others under State law. Winters v. United States, 207 U.S. 564, 577, 28 S.Ct. 207, 212, 52 L.Ed. 340 (1908). Furthermore, “Federal water rights are not dependent upon state law or state procedures and they need not be adjudicated only in state courts.” In re General Adjudication of All Rights to Use Water in the Big Horn River System, 753 P.2d 76, 114 (Wyo.1988) (quoting Cappaert v. United States, 426 U.S. 128, 145, 96 S.Ct. 2062, 2073, 48 L.Ed.2d 523 (1976)), aff'd sub nom. Wyoming v. United States, 492 U.S. 406, 109 S.Ct. 2994, 106 L.Ed.2d 342 (1989), reh’g denied 492 U.S. 938, 110 S.Ct. 28, 106 L.Ed.2d 639 (1989) (Bighorn I). However, state concepts such as “beneficial use” may supply guidance in determining the scope of reserved rights. Colville Confederated Tribes v. Walton (Colville III), 752 F.2d 397, 400 (9th Cir.1985). I would hold that a “paper” reserved right must be put to beneficial use before it can be allowed to interfere with the rights of state appropriators.
This is only consistent with making the highest and best use of the water for all. Indian reserved rights are subject to this principle. Cf. P. Maxfield, M.F. Dietrich & F. Trelease, Natural Resources Law on American Indian Lands 213 (1977): “[Indian water rights] cannot be claimed on a dog-in-the-manger basis; when the Indian right is not in use, the water may be taken and used by others having inferior rights.” (emphasis added) It is simply unjust to require appropriators who must put their water to beneficial use to stand by and watch the Tribes waste water at their expense.
This leads us to the crux of the matter, which is whether instream flow is a beneficial use. In responding to this question, we must carefully consider the special qualities of reserved rights. The 500,000 acre feet reserved water right here is set aside for the Tribes and available forever for application to the land. The right to acquire a water right from the 500,000 acre feet awarded is owned by the Tribes and the federal government and is not subject to loss through abandonment or otherwise. The reserved right looks backward for priority purposes to the establishment date of the reservation. Thus, reserved rights escape many of the limitations imposed by the prior appropriation system. Since they are in derogation of this system, by which all other appropriators must live, their scope should be carefully limited to avoid undue prejudice to those who receive their rights under state law. I propose that one such limitation is that reserved rights cannot be considered beneficially used until they are used for the purposes for which they were reserved. In the case of the Bighorn reserved rights, that purpose was irrigation.
We said in Bighorn I, 753 P.2d at 96: [W]e have no difficulty affirming the finding that it was the intent at the time to create a reservation with a sole agricultural purpose^]
and at page 99:
The district court did not err in finding a sole agricultural purpose in the creation of the Wind River Indian Reservation. The Treaty itself evidences no other purpose, and none of the extraneous evidence cited is sufficient to attribute a broader purpose^]
and at page 112:
In the case at bar, the purpose of the reservation for which water is reserved is narrow — agricultural only.
*287Therefore, I would hold that the Tribes’ rights, to be initially defined as beneficially used, must first be put to use for agricultural purposes.
Having said this, I do recognize that Indian water rights must be interpreted with sufficient flexibility to allow for change in use which may be needed when the needs of the Tribes also change. See e.g., Colville Confederated Tribes v. Walton (Colville II), 647 F.2d 42, 47 (9th Cir. 1981). Therefore, once a paper right has been converted to beneficial use by actually being applied to the practicably irrigable acreage, I would allow the Tribes to apply to change their use of the water. I would make this change subject to a reasonable set of procedures, which may be more liberal than those contained in Wyoming law.
I disagree with the majority that a change of use must be hamstrung by compliance with Wyoming statutes defining acceptable uses and procedures for change of use. I also disagree with the majority’s position that Wyoming law now applies to prevent the Tribes from obtaining any in-stream flow right. Although Wyoming statutes prohibit any but the State from obtaining an instream flow, within the broad ambit of the constitutional beneficial use concept, an instream flow may be a permissible use by the Tribes. The federal water right owned by the Tribes is subject only to the beneficial use concept in its broadest sense, not as it has been interpreted in a particular statute. Therefore, I would allow the Tribes to develop an in-stream flow right.
My primary concern is that the change of use must be orderly and gradual so as to minimize the devastating effect of an enormous dedication to instream flow of water that has never before, and is not now, being used for beneficial purposes. Although the “sensitivity doctrine” contained in United States v. New Mexico, 438 U.S. at 718, 98 S.Ct. at 3023 (Powell J., dissenting in part), was rejected in the particular context of Bighorn I, at 111-12, this is an ideal stage for its application. The rights of appropriators under state water law, and the congressional policy of deference to state water law, must be respected.
The benefits that result from my proposed disposition are many. First, those farmers and ranchers who, for generations, had an adequate, reliable source of irrigation water will not be ruined, bankrupted over night by their neighbor and now new senior appropriator, the Tribes, who profess their firm intention to keep approximately 200,000 acre feet of reserved paper water never before beneficially used in the river, leaving little or no water for diversion for irrigation. Second, these farmers and ranchers know that as time passes the Tribes will probably apply their reserved water right to the practicable irrigable acreage, the effect of which will be to gradually diminish the water available to the now junior rights of these farmers and ranchers. This water may also eventually be applied to instream flows. But the irri-gators who share the water with the Tribes will have time to adjust their operations, return some land to dry farming, range land, or some other use. Each of the parties will have time to adjust to the new realities of their situation with time for study and adjustment. All of the water will more likely be applied to its highest, best and most beneficial use benefitting all who reside in Wyoming.
Joint Administration of the River System
I do not agree that Wyoming law governs the administration of Indian water rights. As we stated in Bighorn I, “[t]he role of the state engineer is * * * not to apply state law, but to enforce the reserved rights as decreed under principles of federal law.” 753 P.2d at 115. The scope of the McCarran Amendment, 43 U.S.C. § 666 et seq., does not change the fact that federal law governs Indian reserved rights. Although suit for administration of water rights in a river system, including reserved rights, may be brought in state court, disputes concerning reserved rights are federal questions which may be reviewed by the United States Supreme Court. United States v. District Court, In and For Eagle *288County, Colorado, 401 U.S. 520, 526, 91 S.Ct. 998, 1003, 28 L.Ed.2d 278 (1971).
Nor do I agree that the State Engineer should administer the tribal water rights to the exclusion of the Tribes. The Indian reserved water is not “state water” as the majority claims. I would hold that the Indians and the State Engineer jointly administer the water rights on the reservation and, in the event of disagreement, must turn to the court for resolution of their dispute. We may find that ultimately it will be necessary for the court to administer the division and application of this water much as the courts have overseen and affected integration of schools. The parties must adopt a new spirit of cooperation with each other. They must stop this wasteful, expensive, useless litigation and move toward this common goal. The resolution of the administration and use of water urged in this concurring and dissenting opinion charts a reasonable middle ground rather than the win-all and lose-all extremes advocated by the parties in their repeated adversarial confrontations. For the reasons stated, I concur in part and dissent in part.