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BEFORE THE COLORADO WATER CONSERVATION BOARD STATE OF COLORADO Revised Opposition to the Prehearing Statement of the Upper Yampa Water Conservancy District IN THE MATTER OF AN INSTREAM FLOW APPROPRIATION IN MORRISON CREEK, WATER DIVISION 6 Flying Diamond Resources and James A. Larson ("Proponents") submit the following revised and amended legal memorandum in opposition to the Prehearing Statement of the Upper Yampa Water Conservancy District ("Districf'), pursuant to the Prehearing Order issued by the Prehearing Officer on July 16, 20 10. In its prehearing statement, the District included as part of an alternative proposal a Request for Permission from the Colorado Water Conservation Board ("CWCB") to Inundate a portion of Silver Creek dated July 7, 2010 ("Request to Inundate"). The Proponents respectfully submit that the District's Request to Inundate (1) falls outside of the scope of matters that may be raised at an ISF hearing; (2) is inconsistent with the stipulation executed by the CWCB and the District in Case No. 07CW61; (3) is premature at this pre-permitting stage in the District's Morrison Creek Reservoir project; and (4) violates the public review process and other procedures required of an inundation request. 1. Issues that may be raised at an ISF hearing or in a pre-hearing statement are limited to those relevant to the statutory determinations required of the CWCB pursuant to § 37-92-102(3)(c). The District's Request to Inundate is entirely separate from and unrelated to the issues that may be raised at the Morrison Creek ISF hearing. The ISF Program Rules state that "[fln a hearing on a contested ISF appropriation, a Party may raise only those issues relevant to the statutory determinations required by §37-92- 102(3)(c), C.R.S. and the required findings in Rule 5i." Rule 5j(3). 'fhe three required statutory determinations are that: (1) there is a natural environment that can be preserved to a reasonable degree with the Board's water right if granted; (2) the natural environment will be preserved to a reasonable degree by the water available for the appropriation to be made; and (3) that such environment can exist without material injury to water rights. C.R.S. § 37-92-102(3)(c). The District's Request to Inundate is not relevant to these statutory criteria. Therefore, the District's request may not be raised at the hearing nor considered by the CWCB as part of its determination whether to appropriate an instrearn flow on Morrison Creek. The segment of Silver Creek that is the subject of the District's Request to Inundate is not part of the reach of Morrison Creek on which the CWCB intends to appropriate an instrearn. flow