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<br />SEITLEMENT AGREEMENT <br /> <br />~; <br /> <br />~j <br /> <br />r <br /> <br />The Colorado State Engineer ("State"), Box Springs Canal and Reservoir Company ("Box <br /> <br />Springs"), the individual shareholders of BoX. Springs and the Horse Creek W ilter Users Association <br /> <br />("HCWUA") enter into the following agreement as of the 29th day ofJanuary, 1997, <br /> <br />RECITALS <br /> <br />A. The State has promulgated Amended Rules and Regulations Governing the Diversion <br /> <br />and Use of Ttibutary Ground Water in the Arkansas River Basin, Colorado (the "Arkansas Rules") <br /> <br />and submitted these for Water Court approval in Case No. 95 CW 211. Box Springs filed a protest <br /> <br />in support of the Arkansas Rules, and HCWUA filed a protest contesting the Arkansas Rules. On <br /> <br />April 15, 1996, the Water Court bifurcated issues concerning the applicability of the Arkansas Rules <br /> <br />to the Horse Creek Basin and ordered that the Arkansas Rules would not be enforced against wells <br /> <br />owned or used by members of the HCWUA pending resolution of the Horse Creek Basin issues, On <br /> <br />April 30, 1996, the Water Court upheld the Arkansas Rules generally, The Horse Creek Basin issues <br /> <br />now are ~et for trial beginning on April 21, 1997, <br /> <br />B. With respect to the Horse Creek Basin, the Water Court on August 20, 1996, ruled <br /> <br />that wells in this basin may not be curtailed under the Arkansas Rules for the benefit of Kansas or <br /> <br />for the benefit of water rights on the Arkansas River in Colorado, because the Horse Creek Basin <br /> <br />is independent from the Arkansas River, The question of whether wells within the Horse Creek <br /> <br />Basin may be curtailed under the Arkansas Rules for the benefit of senior surface water rights in the <br /> <br />Horse Creek Basin remains to be determined. <br /> <br />.... <br />