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396 UNIVERSITY OF COLORADO LAW REVIEW [Vol. 55 <br /> the water. <br /> This entrepreneurial system was affirmed as late as 1969 when <br /> the legislature modified and updated the state's fundamental laws <br /> for adjudicating water rights but retained them essentially as they <br /> were from the time Colorado became a state.33 In fact, the legisla- <br /> ture rejected a vigorously advocated proposal for Colorado to be- <br /> come a "permit" state34 and reached a compromise that allowed <br /> water referees to be appointed to assist courts in hearing applications <br /> for the adjudication of water rights.3a <br /> Those familiar with the growth in use of Colorado water know <br /> that diversions to small ditches, often later extended, were followed <br /> by the construction of mostly off-stream storage facilities. A few <br /> large, on-stream reservoirs, such as the Denver Union Water Com- <br /> pany's Cheesman Dam were constructed before the 1930's,3° as were <br /> some smaller trans-mountain diversions. But much of the Colorado <br /> citizenry's capital had been used up by the 1930's. Some irrigation <br /> districts were in financial difficulty. This lack of capital, coupled <br /> with the Depression, caused Colorado to seek project capital from <br /> the federal government. Some of the projects dreamed about were <br /> large, such as the Colorado Big Thompson diversion. The Central <br /> Valley and Boulder Canyon projects, which were financed by the <br /> federal government, indicated that Congress would now build recla- <br /> mation projects on a much larger scale than had been true early in <br /> the century.87 <br /> As already mentioned, the legislature created the Colorado <br /> Water Conservation Board in 1937 to encourage the construction of <br /> federal water resources and flood control projects in Colorado and to <br /> administer the state's role in those projects. At the same time, it <br /> enacted legislation authorizing formation of water conservancy dis- <br /> tricts38 and created the Colorado River Water Conservation District <br /> to protect the Colorado River Basin's interests.39 The Northern Col- <br /> orado Water Conservancy District was immediately organized40 and <br /> 33. See COLO.DEP'T OF NATURAL RESOURCES,THE COLORADO WATER STUDY:DIREC- <br /> TIONS FOR THE FUTURE 11-50 (1979). <br /> 34. H.B. 1307, Colo. Gen. Assembly (1969). <br /> 35. Cow. REV. STAT. § 37-92-302(4) (1973). <br /> 36. See Costa & Bilodeau,Geology of Denver, Colorado,XIX BULLETIN OF THE ASSN <br /> OF ENGINEERING GEOLOGISTS, 301 (1982); Moses,supra note 28. <br /> 37. See Boulder Canyon Project Act, 43 U.S.C. §§ 617-617(u) (1980); 49 Stat. 1057 <br /> (1928). <br /> 38. COLO. REV. STAT. §§ 37-45-101 to 153 (1973 & Supp. 1983). <br /> 39. Id. §§ 37-46-101 to 150. <br /> 40. See People ex re Rogers v. Letford, 102 Colo. 284, 79 P.2d 274 (1938). <br />