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Section 4
<br />Legal Framework for Water Use
<br />4.3.3 Changes of Water Rights
<br />A change of water rights is another tool that allows water
<br />users flexibility to maximize the potential use of water. As
<br />described in the 1969 Act, a change of water rights
<br />includes "a change in the type, place, or time of use, a
<br />change in the point of diversion," and changes in the
<br />manner or place of storage. A change of water right will
<br />not be allowed unless it is approved by the water court,a~
<br />upon a finding that the change "will not injuriously affect
<br />the owner of, or persons entitled to use, water under a
<br />vested water right or a decreed conditional water right."42
<br />In a change case, the measure of the water right is the
<br />amount that was historically consumed (not the amount
<br />diverted) under the water right. Thus, only the amount of
<br />water that historically has not returned to the stream
<br />system under the original decreed use may be changed
<br />to a new place or type of use. This limitation ensures that
<br />the change will not enlarge the historical impact of the
<br />water right on the stream system, avoiding injury to other
<br />water users. In addition, in a change of water right
<br />proceeding, the applicant must take appropriate steps to
<br />ensure that historical return flows from the use of the
<br />water in amount, timing, and location are maintained.
<br />This is required because other water users rely, and are
<br />legally entitled to rely, on those return flows to support
<br />their appropriation and uses of water.
<br />Changes of water rights allow for the reallocation of
<br />water resources to meet changing demands. For
<br />example, in Colorado, the largest water demand is for
<br />irrigated agriculture. With increasing urbanization,
<br />however, ever larger amounts of water are needed for
<br />municipal uses. To meet this demand, municipal entities
<br />can purchase senior agricultural water rights and change
<br />them to municipal uses. Likewise, the CWCB can also
<br />purchase agricultural water rights and change them to
<br />instream flow uses. All of these activities, however, must
<br />satisfy the "no injury" requirements in terms of
<br />maintaining historical return flows and preventing an
<br />expansion of historical CU.
<br />Increasing the efficiency of use of a water right may not
<br />require a change of water right proceeding in all
<br />instances. For example, an agricultural user may change
<br />his method of irrigation (e.g., from flood to drip or
<br />41 See Northern Colo. Water v. Three Peaks Water, 859 P.2d 836
<br />(Cob. 1993).
<br />4z CR5. § 37-92-305(3).
<br />sprinkler irrigation), yet still maintain the overall decreed
<br />use of irrigation. Although such activities may not require
<br />a change of use proceeding in water court, arguably this
<br />activity could have a detrimental impact on other water
<br />users to the extent that the change in irrigation alters
<br />return flows or the CU of a right.
<br />Adjudicating a change of water rights can be time
<br />consuming and costly, and formal notification is required
<br />by law. Even when no parties object to the change, the
<br />process of water court approval takes a minimum of
<br />3 months, and often much longer due to the heavy case
<br />load of water court judges. If parties do oppose a change
<br />case, it can take years to get a change decree approved
<br />by the court. In addition to paying attorneys' fees, an
<br />applicant for a change of water rights generally must hire
<br />an engineering consultant to prepare a report explaining
<br />the technical aspects of the change and develop an
<br />accounting form for administering the change. In order to
<br />avoid these costs and to speed the process, Colorado's
<br />legislature recently enacted legislation that authorizes a
<br />water right owner to lease water under the right without
<br />formal adjudication of change of water right. This
<br />legislation is discussed immediately below.
<br />4.3.4 Leases of Water
<br />During the 2003 legislative session, C.R.S. §§ 37-80.5-
<br />101 to 105 were amended to authorize the State
<br />Engineer to create water banks within each water
<br />division, and to adopt rules governing their operation.
<br />The aim of this legislation is to simplify the process for
<br />temporary transfers of water rights by eliminating the
<br />adjudication proceedings required for a permanent
<br />change of water rights. The statute provides that the
<br />rules shall allow for the "lease, exchange, or loan of
<br />stored water within a water division," including a transfer
<br />to the CWCB for instream flow purposes, without the
<br />need to submit to any adjudication proceedings.
<br />Notwithstanding the fact that the lease, exchange, or
<br />loan is not adjudicated, such arrangements will still be
<br />subject to administration by the Division Engineer, within
<br />the priority system, to prevent material injury to other
<br />water users.
<br />Another area of potential leasing involves agreements
<br />between agricultural and municipal/industrial users for
<br />interruptible supplies. Although this approach may
<br />require obtaining a change of use decree, it would
<br />potentially allow flexibility between agricultural and
<br />J~~a
<br />$~ole'ri~ice Wo~e' $upplY Initia~ive
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