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<br />ls'n> <br /> <br />.: /' <br />, ., <br /> <br />A water bank appears to fall within the category of a plan for augmentation under Colorado <br />statutes. The definition of a plan for augmentation in C.RS. 37-92-103(9) is broad enough <br />to accommodate water banking: <br /> <br />Plan for Augmentation means a detailed program to increase the supply of water available <br />for beneficial use. . . by the development of new or alternative means or points of diversion, <br />by a pooling of water resources, by water exchange projects, by providing substitute supplies <br />of water, by the development of new sources of water, or by any other appropriate means. <br />While the reference to "pooling" has not been further defined in case law, it arguably <br />encompasses water banking. <br /> <br />The special statutory procedures for administration of augmentation plans in C.RS. 37-92- <br />501.5 also provide the flexibility to establish a water bank. The state and division engineers <br />shall "exercise the broadest latitude possible in the administration of waters under their <br />jurisdiction to encourage and develop augmentation plans and voluntary exchanges of water <br />and may make such rules and regulations and shall take such other reasonable action as may <br />be necessary to allow continuance of existing uses and to assure maximum beneficial <br />utilization of the waters of the state." If the FLCC did not choose to operate the water bank, <br />there may be authorization for political subdivisions to do so under C.R.S. 37-83-106. <br /> <br />The Colorado Supreme Court has emphasized the policy of maximum beneficial use and of <br />the optimum use of water resources. Relying on C.RS. 37-92-501(2) (e), the court has <br />asserted that the State Engineer should encourage optimum use of water rights and make <br />rules in support thereof.! Water banking is also consistent with the theory of maximum <br />utilization of water resources reflected in the Constitution and the Water Right <br />Determination and Administration Act of 1969. <br /> <br />Water Bank Potential <br /> <br />The water bank alternative has several advantages over other alternatives, from the viewpoint of the <br />Fort Lyon Canal Company shareholders. The water bank is clearly the best of the six alternatives <br />presented in Chapter 6 when considering the long-term economic and social well being of the Lower <br />Arkansas Valley. The advantages of the water bank include the following: <br /> <br />. Participation in the water bank is voluntary, and only willing shareholders will lease <br />some or all of their water; <br /> <br />. Shareholders can readily obtain funds from leases of their water, whereas sales of a <br />minority of ditch company shares often involve difficulties, delays and significant legal <br />costs; <br /> <br />. The financial returns to the shareholders will be greater than their returns from <br />irrigated agriculture, since they set the price when offering water for lease. Using the <br /> <br />tAlamosa-La]ara Water Users Protection Ass'n v, Gould. 674 P.2d 914. 935 (Colo, 1983). In making such <br />rules, economic factors and environmental factors may be relevant factors. Water banking is designed to <br />accommodate economic concerns. <br /> <br />8-5 <br />