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. Excerpt from Statement of Basis and Purpose for Rules and Reaulations Concernina the Colorado Instream Flow and Natural Lake Level Proaram Section 8 -Inundation of ISF Riqhts Inundation of all or a portion of a Board ISF stream reach or lake may be an interference with the Board's usufructuary rights which were confirmed by the ISF decree. The term "inundation" as used in this section means the artificial impoundment of water within an instream flow reach or natural lake. "Inundation" does not refer to the use of a natural stream as a conveyance channel as long as such use does not raise the waters of the stream above the ordinary high water mark as defined in 9 37-87-102 (I)(e) C,R.S. (1990). Interference with an ISF right is .any non-consensual act which hampers the Board's ability to use its water right to preserve the stream habitat or other natural environment for which the ISF right was originally appropriated. The term "interference" as used in this section is the use of one person's property to damage another, person's property and includes the water law concept of injury. . The inundation rules may not apply to small inundations because of the likelihood that the small inundations will not interfere with the purpose of the Board's ISF right. Staff shall not be required to file Statements of Opposition to these small inundations but the staff may file a Statement of Opposition if it determines that the ISF right or natural environment will be adversely affected by the inundation. In the event staff cannot determine from a review of the published application whether the provisions of Section 8.01 apply, the staff may file a Statement of Opposition to any application which proposes inundation of an ISF right. Small inundations are defined by Section 8.01 as those inundations in which the impoundment is 100 acre feet or less, or the surface acreage is 20 acres or less, or the dam height is 10 feet or less. To prevent situations in which an applicant proposes numerous small inundations, none of which exceed the definition of small inundations but the cumulative total would exceed the definition of small inundation, the Board will accumulate all inundations on a stream reach proposed by the applicant. . Persons proposing inundations that exceed the small inundation definition contained in Section 8.01 may obtain the Board's approval prior to inundating an ISF reach and thereby avoid possible litigation with the Board. Prior to deciding whether to approve or deny a proposed inundation, the Board shall determine whether the proposed inundation constitutes an interference with an ISF right. The Board has retained discretion to make decisions on whether inundation interferes with an ISF right however, the Staff as a usual course of action will file a Statement of Opposition in any proceeding in which the water right sought would inundate an ISF right. The decision whether an inundation will be considered an interference will be made on a case-by- case basis after considering all relevant factors, including, but not limited. to the extent of inundation proposed and the impact of the proposed inundation on the natural environment existing prior to the inundation. The Board in protecting its ISF rights from inundation does not intend to create a land use regulation, federal wild and scenic river Exhibit 3