8E

• Board Meeting Date: 1/22/2008
• Description: CWCB Legislative Priorities and Recommendations - Instream Flow Lessor Protection
• Board Meetings - Doc Type: Memo

STATE OF COLORADO

Colorado Water Conservation Board

Department of Natural Resources
1313 Shennan StreeL Room 721
Denver, Colorado 80203
Phone: [phone]
Fax: [phone]
',",Vi\V. C\VCb. state. co.us

Bill Ritter, k
Governor

TO:

Colorado Water Conservation Board Members

Hanis D. Shennan
DNR Executive Director

FROM:

Linda 1. Bassi, Chief
Stream and Lake Protection Section

Jennifer L. Gimbel
CWCB Director

DATE:

January 14, 2008

Dan McAuliffe
CWCB Deputy Director

SUBJECT:

Agenda Item 8.e, Janual")' 22-23, 2008 Boal.d Meeting
Stream and Lake Protection -Instream Flow Lessor Protection

Introduction

The Colorado Water Conservation Board ("CWCB") staff is recommending statutory revisions
to protect water rights owners who lease or otherwise contractually allow the CWCB to use all or
a portion of their water rights as instream f10ws to preserve or improve the natural environment
to a reasonable degree. These statutory revisions would apply to long term loans or leases of
water and would provide the same protection that HB 07-1012 provided to water rights owners
who temporarily loan or lease their water rights to the CWCB under section 37-83-105(2),
c.R.S. Staff will recommend that the Board approve moving forward with this legislation.

Background

Section 37-92-102(3) authorizes the CWCB to "acquire, by grant, purchase, donation, bequest,
devise, lease, exchange, or other contractual agreement, from or with any person, including any
governmental entity, such water, water rights, or interests in water in such amount as the board
determines is appropriate for stream f10ws or for natural surface water levels or volumes for
natural lakes to preserve or improve the natural environment to a reasonable degree."

In addition to accepting numerous permanent donations of water for instream f10w use, the
CWCB has entered into leases and other contractual arrangements for approximately 4, 150 acre-
feet and 13.5 cfs of water for instream f10w use. Under most of these agreements, the water right
owner retains ownership of and the ability to use the subject water right for its original decreed
use. The potential loss of value of the original water right has emerged as a potential stumbling
block for lease transactions. The problem arises because, unlike more traditional beneficial uses
of water, which involve diversions and consumptive use, instream f10w uses simply leave water
in the stream to preserve or improve the natural environment. Under current Colorado water
law, periods of zero diversions and no consumptive use are counted when establishing the
historic use of a water right which, in turn, determines the value of that water right. Because
instream f10w uses do not involve a diversion or consumptive use, absent statutory protections,

'Vate.' Supply Pl"Otection. 'Yate,'shed Protection & Flood Mitigation' St,'eam & Lake Protection' 'Vate.' Supply Planning & Finance
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