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Section 4 <br />Legal Framework for Water Use <br />water storage rights, conditional water rights, <br />augmentation plans, changes of water rights, <br />appropriative rights of exchange, and instream flow <br />rights, all of which allow water users to make the most of <br />a scarce resource. In addition to making efficient <br />beneficial use of water, interstate compacts and <br />equitable apportionment decrees limit the amount of <br />water Colorado can use. These interstate compacts and <br />decrees are discussed in Section 4.2. <br />4.1.1.1 The Priority System <br />The priority system of water allocation is designed to <br />cope with water scarcity.$ Under the doctrine of prior <br />appropriation, if water is insufficient to meet the needs of <br />all water users, those with senior rights can require full or <br />partial curtailment of diversions by junior water users, <br />such that users with later priorities receive less than their <br />allotted amount of water, or none at all.9 Essentially, this <br />doctrine protects those who first begin using the water <br />from injury by those whose use began later in time.~o <br />Thus, typically, the more senior the water right, the more <br />valuable it is, particularly in times of drought. <br />As mentioned above, water rights may be conveyed and <br />changed to a new type, place, and manner of use. As a <br />general matter, municipalities and other water users can <br />satisfy their water needs by appropriating new water <br />rights, including water storage rights, and/or by <br />purchasing senior water rights (typically agricultural use) <br />and changing them to municipal, commercial, or <br />industrial uses according to the statutory procedures for <br />changing a water right. <br />4.1.1.2 Beneficial Use <br />The single most important restriction on the appropriation <br />of water in Colorado is the constitutional requirement that <br />water be placed to a"beneficial use.°~~ "Beneficial use" is <br />defined in the Water Right Determination and <br />8 See James N. Corbridge Jr. and Teresa Rice, Uranesh's Colorado <br />Water Law (Revised ed. 1999) at 2("The primary advantage of the <br />appropriation system is the development of inethods for the orderly <br />distribution of water in water-short regions by establishing <br />procedures for both the quantification and prioritization of water <br />rights"). <br />9 See CR5. § 37-92-301(3) (requiring the state engineer to distribute <br />water in accordance with the priority system). <br />~~ Application of Hines Highlands Partnership, 929 P.2d 718 (Cob. <br />1996). <br />~~ See Uranesh, supra, at 43, citing Thomas v. Guiraud, 6 Cob. 530 <br />(Cob. 1883) (referring to the beneficial use requirement as the "true <br />test of an appropriation of water"). <br />C~A <br />Administration Act of 1969, Section 37-92-101 et seq. <br />(hereafter 1969 Act) as follows: <br />Beneficial use is the use of that amount of water that <br />is reasonable and appropriate under reasonably <br />efficient practices to accomplish without waste the <br />purpose for which the appropriation is lawfully <br />made[.]12 <br />The purpose of the beneficial use requirement is to <br />prevent waste, hoarding, and speculation by <br />appropriators, and to encourage the quick and efficient <br />use of the resource.13 The beneficial use requirement <br />acts to limit the amount of water that may be <br />appropriated for private use throughout the life of the <br />water right. In order to establish a valid appropriation for <br />an absolute water right, a water user must demonstrate <br />that a certain amount of water has been applied to a <br />beneficial use.14 The amount decreed is limited to the <br />amount placed to beneficial use. <br />In order to obtain a conditional water right, a right for <br />water that has not yet been placed to beneficial use, a <br />water user must establish that it "can and will" place a <br />certain amount of water to beneficial use within a <br />reasonable amount of time.15 A water user may not <br />appropriate more water than it actually needs for its <br />intended use. <br />Courts have further applied the principle of beneficial use <br />in holding that a water user has no right as against junior <br />appropriators to divert more water than can be used <br />beneficially,~s regardless of the amount decreed, or to <br />expand its use beyond the amount needed for the <br />decreed use.~~ <br />A water user that diverts more water than it can place to <br />beneficial use may have its diversions curtailed by the <br />1z C.R.5.§ 37-92-103(4) (2002). <br />13 See Uranesh, snpra, citing, Combs v. Agricultural Ditch Co., 152, 28 <br />P. 966, 968 (Cob. 1892). <br />14 See CR5. § 37-92-103(a) (this section sets forth Colorado's "anti- <br />speculation doctrine," requiring that an applicant for an absolute or <br />conditional water right show that the proposed appropriation is not <br />based upon the "speculative sale or transfer of the appropriative <br />rights[,]" and that the applicant has "a specific plan and intent to <br />divert, store or otherwise capture, possess, and control a specific <br />quantity of water for specific beneficial uses"). <br />15 See C.R.5. § 37-92-305(9)(b). <br />16 See, Comstock v. Ramsay, 133 P. 1107, 1110-11 (Cob. 1913). <br />~~ See Weibert v. Rothe Bros. Inc. 618 P.2d 1367,1373 (Cob. 1980). <br />~~ <br />Sfvtewide Woter Supoly Initiofive <br />4-Z S:\REPORT\WORD PROCESSING\REPORT\S4 11-7-04.DOC <br />