FLOOD00515

• County: Statewide
• Community: State of Colorado
• Title: Water Rights Determination Systems Study CWCB
• Date: 6/1/1987
• Prepared By: CWCB
• Floodplain - Doc Type: Educational/Technical/Reference Information

the transferee."" If the transfer involves a
change of the water right, the transfer must
be judicially approved.

As with other appropriative rights,
such a change is subject to the no injury rule.
Because of the unique interrelationship
among shareholders in a mutual company,
courts have developed a more restrictive
reading of the no injury rule in such
shareholder change proceedings.'"
Established patterns of usage may not be
altered to the detriment of other
shareholders.'" The court will impose
conditions on the transfer to prevent
potential injury to the remaining
shareholders.1Z7

Mutual ditch companies may establish
requirements in their by-laws affecting the
right of shareholders to transfer their share
interests. For example, transfers may be
subject to approval by the companies' Board
of Directors. Or restrictions may be placed
on the manner, type or place of use.
Generally, as with contracts, transfer
limitations contained in by-laws are valid as
long as they are reasonable and not against
public policy.""

Irrigation DistricLr

The structure of ditch companies
made them inadequate for financing large
irrigation projects. To respond to the need
for a quasi-municipal corporation to facilitate
such development, Colorado law initially
authorized irrigation districts in 1901."9 An
irrigation district holds title to the district's
water right in trust. 130 The district has the
power to transfer its water rights, although
prior electorate approval and court order may
be required.l3I Transfers by the district are
not limited to the district boundaries. No
sale of water rights may infringe on other
water rights or eonflict with state water law. W
Districts formed under the 1921 Act may
lease surplus waters for use within or without
the district boundaries.1l3 .

Water U:ser.r Annrintin.u

Water users associations were
authorized originally in 1905 as another type
of entity able to contract with the Bureau of
Reclamation to receive project water.Ll4
Colorado law authorizes water users
associations to assess their members as
necessary to repay obligations to the
Bureau. W There is no state statutory
restriction on the transfer of water by the
association or its shareholders.

Cotuervancy DistricLr

Conservancy districts have an ability to
tax all lands within the district irrespective of
whether they directly receive water.'36 The
board of directors of a conservancy district is
given broad power to obtain and dispose of
property, to enter contracts, and to levy taxes
and assessmentsm The board has the
authority to allocate and reallocate water
within the district,138 and to permit a
beneficial user to transfer his water to other
lands within the district."9 District boundaries
may be altered by petition from landowners
or municipalities to either the board or the
court for inclusion of their lands within the
district."" In 1989, the Colorado legislature
authorized districts to lease or exchange water
for use outside district boundaries.'" There
can be no permanent transfers of water rights
outside district boundaries, however,

Municipalities

The major source of new demand foroconsumptive use of water in Colorado is
related to urban growth. Wafer supplies for
municipal purposes, including commercial
activities, commonly are supplied either by
city water departments or by special water
districts in Colorado. Municipalities may
obtain water by appropriation, by purchase,
by condemnation, or by iease.'" Because of
their need to plan for future growth and
development, courts have allowed cities to

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