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Water, Growth and Land Use

Historians point out that coping with growth has been Colorado's single greatest invigorating influence, and its single greatest concern, since World War II (Ubbelohde, Benson & Smith, A Colorado History 346-47(8th Ed. 2001)).

By the mid-1970s, environmental protection, land use regulation, and water supply policy had become a major focus of legislation in the Colorado General Assembly. Throughout this decade, statewide air and water quality legislation figured prominently—complimenting statutes such as the Clean Water Act of 1977 at the federal level.

Although the majority of land use and water policies were deferred almost exclusively to local governments, in 1974 the legislature did adopt several land use and growth-related statutes that still have significant influence today: the Local Government Land Use Control Enabling Act, House Bill 1041, and subdivision water supply provisions.

Land Use Control Enabling Act
The Land Use Enabling Act granted towns, cities, and counties broad authority to plan and regulate the ‘orderly use of land and protection of the environment.’ According to the act, local governments have authority to:

• Regulate development in hazardous areas
• Protect wildlife habitat and species
• Preserve areas of historical and archeological importance
• Regulate the location of activities and development that may cause significant changes in population density
• Regulate land use based on impacts to the community
• Impose impact fees or other charges related to impacts from proposed development on facilities provided as a service of the local government, such as water supply and wastewater treatment plants. (see Sections 29-20-101-108 (C.R.S. 2003)).

House Bill 1041
This legislation encouraged local governments to select sites and regulate the development of ‘areas and activities of state interest,’ including:

• Major domestic water and sewage treatment systems
• Municipal and industrial water projects
• Solid waste disposal sites
• Municipal or county airports
• Rapid or mass transit systems
• Highways and interchanges
• Major facilities for public utilities
• New communities
• Mineral resource areas
• Natural hazard areas
• Areas containing, or having a significant impact upon, historical, natural, or archaeological resources of statewide importance
• Areas around key facilities in which development may have a material effect upon the facility or surrounding community (see Sections 24-65.1-101-502).

HB 1041 regulations were put to the test in 1989 when the Colorado Supreme Court upheld Grand County's 1041 powers in Denver v. Grand County. Grand County argued successfully that the Colorado Constitution does not prohibit a county from requiring a permit for new or modified water projects. Although specific language in HB 1041 states that ‘nothing herein shall be construed as enhancing or diminishing a water right or modifying or amending water laws or water right decrees,’ it does allow a county to condition or deny a permit for a water project that will create a nuisance or significantly degrade the environment, including:

• Aquatic habitats
• Marshlands and wetlands
• Groundwater recharge areas
• Steeply sloping or unstable terrain
• Forests and woodlands
• Critical wildlife habitat
• Big game migratory routes
• Calving grounds
• Migratory ponds
• Nesting areas and the habitats of rare and endangered species
• Public outdoor recreation areas
• Unique areas of geologic, historic, or archaeological importance.

HB 1041 powers were further upheld in 1994, when Aurora and Colorado Springs wanted to divert water from the Eagle River Basin for the Homestake II Reservoir, but were denied a permit from Eagle County because the project failed to comply with the county's 1041 regulations.
In this case, the Court of Appeals ruled that ‘the cities' entitlement to take water from the Eagle River basin, while a valid property right, should not be understood to carry with it absolute rights to build and operate any particular water diversion project.’ Aurora and Colorado Springs are working to redesign the project to locate it outside of the Holy Cross Wilderness Area and to reduce its environmental impacts, but to date they have not reapplied for a HB 1041 permit from Eagle County.

Early use of HB 1041 powers in the context of water projects focused on trans-mountain diversion proposals. Recently, however, counties on the eastern plains have taken an interest in this unique land-use enabling authority. Counties along the lower Arkansas River have adopted HB 1041 regulations requiring a permit for, among other things, the removal of irrigation water from land which has historically been irrigated. These regulations address the environmental impact of agricultural dry-up: topsoil loss, noxious weed invasion, and the consequent loss of wildlife habitat. The regulations emphasize revegetation and wildlife mitigation plans as key permit conditions.

Subdivision Water Supply Provisions
Concern about adequate water supplies for new subdivisions prompted the General Assembly in 1972 to require developers to provide counties with adequate evidence of sufficient water supply in terms of quality, quantity, and dependability for whatever type of construction proposed. (see Section 30-28-133(3)(d)).

Further, the General Assembly required the county to submit the proposed supply plan to the State Engineer for an opinion as to whether it might cause injury to other decreed water rights, and to evaluate if it provides sufficient supply. (see Section 30-28-136(h)(I)).

The State Engineer comments on wells and surface water supplies from municipalities and other sources. The different types of water supply proposed for a subdivision may include surface water, tributary groundwater, Denver Basin groundwater, and designated groundwater.

For example, if Denver Basin groundwater is proposed for the subdivision, the State Engineer will require a declaration of the specific aquifer intended for the subdivision, and a calculation of the amount of groundwater in storage underlying the development. It is important that the developer specifically determine how the Denver Basin aquifers will be utilized, because several counties have 300-year water supply requirements for all new developments utilizing these aquifers.

In 2001, 335 subdivisions were reviewed and commented on by the State Engineer, increasing to 425 reviews in 2002, and 348 reviews in 2003.

Recent Growth and Water Supply Legislation
Exacerbated by drought and growth, critical shortfalls in water supply have prompted another spate of water-related legislation passed in the last three years. Water supply shortfalls, if only for limited critical periods of time, often require water providers to pursue short and long-term exchanges, transfers, or leases of water rights.

Traditionally, changes of water rights were the purview of the water courts. However, it can often take from six months to two years to have these changes approved. Contested cases may take even longer.

To improve the flexibility and responsiveness of the state's administration system to better address issues such as drought, growth, and concern for instream flows for fish and wildlife, in 2002, 2003, and 2004 the General Assembly adopted legislation authorizing the State Engineer to:

• Allow interruptible water supply agreements between water right owners and cities. The leases may operate no more than three out of ten years. Temporary changes in the point of diversion, location of use, and type of use for absolute water rights are allowed without the need for court approval (HB 03-1334, HB 04-1256).
• Allow farmers to loan all or part of their decreed water rights to another agricultural water right holder on the same stream system, or the Colorado Water Conservation Board for instream flows. The loan can operate for no more than 180 days, must be approved by the Division Engineer, and cannot cause injury to other water rights. (SB 04-032)
• Allow temporary changes of water rights and substitute supply plans for out-of-priority diversions while applications for changes of water rights and augmentation plans are pending in Water Court (HB 02-1414, HB 03-1001)
• Establish water banks for stored water throughout the state (HB 03-1318)
• Give junior tributary wells in the South Platte Basin until December 31, 2005 to file their augmentation plan applications in Water Court. In the mean time, they are allowed to pump their wells if they have a substitute supply plan approved by the State Engineer (SB 03-073).

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