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5 <br />100 year history of litigation over rights to the Arkansas River.” The Special Master <br />found that Colorado’s efforts to regulate post-Compact well pumping have been <br />successful in preventing a net depletion to usable stateline flows during the first ten- <br />year compliance period (1997-2006). The proposed Judgment and Decree contains <br />a limited retained jurisdiction period until the end of 2008 to evaluate the sufficiency <br />of the Colorado Use Rules and their administration and whether changes to the <br />Decree are needed to ensure compact compliance. <br /> <br />The Special Master has recommended that the Court enter the Judgment and <br />Decree, and neither State has taken exception to that recommendation, except for <br />Kansas’ exception to the amount of costs. The only remaining issue to be decided is <br />whether the Special Master was correct in ruling that 28 U.S.C. § 1821(b) limits <br />costs for expert witness fees in this case. The ruling on this issue will determine the <br />final amount of fees owed by Colorado to Kansas. <br /> <br />Colorado further assisted Arkansas River compact compliance through the Arkansas <br />River Compact Administration (ARCA) and the Special Engineering Committee <br />(Committee). The Committee developed and agreed to new procedures on <br />accounting during prior years and Colorado provided restitution to Kansas using <br />drought impact grant money to purchase fully consumable native water from the <br />Pueblo Board of Water Works to make up for past delivery deficits. <br /> <br />Water Division 3 <br /> <br />We are working towards resolution of the ground water issues and a trial for the first <br />sub-district is scheduled for October. These sub-districts are essentially ground <br />water management districts formed for the purpose to reduce ground water <br />demands through approved plans of water management. I anticipate developing <br />draft well compliance rules by yearend in conjunction with the creation of the sub- <br />districts and plans of water management. It could take up to a year to adopt these <br />rules. <br /> <br />In March 2008, the Colorado Supreme Court upheld the water court’s decision <br />upholding rules governing certain new withdrawals from the confined aquifer. The <br />court held that the rules were not in violation of either statutory law or the Colorado <br />Constitution. The court found that because the confined aquifer does not contain <br />any unappropriated water, restrictions on withdrawals from that aquifer do not violate <br />the constitutional right to appropriate. It additionally held that the rules did not <br />extend beyond their statutory authority. The court rejected the argument that the <br />rules violated equal protection because they pertained only to new withdrawals from <br />the confined aquifer, finding that there were rationale bases for treating the groups at <br />issue differently. Lastly, it held that the State Engineer was not required to follow the <br />state Administrative Procedure Act in promulgating the rules. <br /> <br />Water Division 4 <br /> <br />The parties are near a resolution of the claim for a reserved right for the Black <br />Canyon of the Gunnison. The terms and conditions of a draft decree have been