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2003 Legislative Update

The Colorado General Assembly opened its 2003 Session in the fourth year of a record drought. This session produced a variety of significant changes to Colorado water law — adding new laws and increasing the law's flexibility. Major legal changes involved:

(1) Authorizing the State Engineer to approve:
  • Establishment of water banks for stored water in each water division in the state (House Bill 1318);
  • Temporary changes of water rights (HB 1001);
  • Substitute supply plans (Senate Bill 73, HB 1001); and,
  • Emergency water supply plans to aid drought-stricken farmers and cities (SB 73).
(2) Allowing loans of water to the Colorado Water Conservation Board to help keep water in the river (i.e., instream flows) during drought emergencies (HB 1320);
(3) Prohibiting new residential covenants that restrict the use of drought-tolerant landscaping (HB 1001);
(4) Authorizing conservation easements for water rights, allowing owners of water rights to keep that water in use for open space, wetlands, recreation, ecological diversity, or farming (HB 1008);
(5) Providing financial mitigation to counties that suffer tax revenue losses as a result of the transfer of water used for agriculture to other uses in other counties (SB 115);
(6) Allowing interruptible water leases permitting farmers to retain agricultural water rights, while leasing water to cities during periods of drought emergency (HB 1334).
(7) Authorizing the Department of Local Affairs to provide technical assistance to local governments to help implement tiered water pricing with higher rates for higher water consumption (HB 1001).
While the 2003 changes to Colorado water law were significant, they do not change the state's duty to protect existing water rights from injury. Nor do they change the authority of Colorado water courts to perform their basic functions.

The General Assembly also concentrated on improving Colorado's ability to meet its water supply needs. It did this by:

(1) Directing the Colorado Water Conservation Board to conduct a statewide assessment of water supply, demand, and development strategies (SB 110). This assessment is called the Statewide Water Supply Initiative (SWSI) and is due for completion by November 2004. Several requirements are built into any recommendations coming out of this study:
  • Proposed SWSI water project alternatives must address social, economic, and environmental impacts; and,
  • Solutions to water supply needs should be developed using a consensus-building approach.
(2) Directing the Colorado Water Resources and Power Development Authority to proceed with development and financing for projects requested by local government agencies, such as water conservancy or conservation districts and cities, as prioritized by the Colorado Water Conservation Board by means of the Statewide Water Supply Initiative (SB 236).
Further, the Colorado Water Resources and Power Development Authority need not obtain approval from the Colorado Water Conservation Board or the General Assembly to provide revenue bond financing for small projects proposed by government agencies requesting less than $500 million dollars (increased from $100 million) (SB 236).
(3) Allocating $500 thousand dollars for a feasibility study of a water supply project commonly known as the ‘Big Straw’ (SB 110). This project would assist in developing Colorado's remaining water allowed under the Colorado River Compact to help meet the water supply needs of the Front Range and Western Slope. The proposed project would divert water from the Colorado River below Grand Junction.
(4) Placing before the voters a measure known as ‘Referendum A’ which could authorize the state to issue up to $2 billion in revenue bonds for water projects recommended by the Colorado Water Conservation Board and approved by the Governor. At least one project must have a 2005 start date (SB 236).

If voters approve the referendum, the Colorado Water Conservation Board could provide revenue bond financing for water projects developed by private corporations as well as government agencies, or a combination of the two (Colorado Water Resources and Power Development Authority financing is restricted to governmental entities).

Up to $100 million dollars of the revenue bonds would be earmarked for rehabilitating existing facilities or for conservation measures that do not involve new storage. In addition, the General Assembly has declared that a portion of any bond proceeds, as determined by the Colorado Water Conservation Board, should be expended for projects that provide benefits to fish and wildlife, recreation, the environment, and fair mitigation for the water's basin of origin (SB 236).

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