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The Colorado General Assembly adjourned its 2022 legislative session on May 11, 2022—below is a highlight summary of water-related legislation passed by the General Assembly, along with a few notable measures that did not pass. Of the bills passed, currently some have been officially signed into law by Governor Polis, while others are awaiting his signature—those in the latter category will automatically become law if not vetoed by the governor within 30 days of receipt. The individual status of each bill can be tracked through the hyperlinks.
Along with funding for specific projects enumerated in the bill, House Bill 1316 appropriates $8.2 million from the water plan implementation cash fund to be used by the Colorado Water Conservation Board (CWCB) for grant-making for projects that assist in the implementation of the state water plan pursuant to section 37-60-106.3(6), C.R.S. $7.2 million of that amount comes from sports betting revenue, legalized in 2019 through Proposition DD.
Senate Bill 215 creates the Infrastructure Investment and Jobs Act Cash Fund and directs the state treasurer to transfer $81.5 million to it from the general fund. The money is to be used as the nonfederal match funding necessary for the state or a local government to be eligible to receive federal approval and federal funds for certain categories of infrastructure projects allowed under the federal “Infrastructure Investment and Jobs Act”
The office of the governor must establish a process for receiving, reviewing, and approving applications and awarding and distributing money from the fund. Subject to modification, the bill states 25% of the appropriation is to be allocated to “water, environmental and resiliency programs as set forth in the federal act.”
House Bill 1379 appropriates $20 million in ARPA funding from the Economic Recovery and Relief Cash Fund for projects to restore, mitigate and protect watersheds from damage caused by wildfire-induced erosion and flooding. Committee testimony emphasized how investing in mitigation protects against the need for very expensive recovery efforts in the future.
House Bill 1151 requires the CWCB to develop a statewide program to provide financial incentives for the voluntary replacement of irrigated turf landscaping with “water-wise landscaping,” defined as water- and plant-management practice that emphasizes using vegetation with lower water needs. Local governments, certain districts, Native American tribes, and nonprofit organizations with their own turf replacement programs may apply to the CWCB for money to help finance their turf replacement programs. In areas where local turf replacement programs do not exist, the bill provides CWCB will contract with a third party(s) to establish and administer one or more turf replacement programs.
Senate Bill 28 creates a Groundwater Compact Compliance and Sustainability Fund to help pay for the purchase and retirement of wells and irrigated acreage in the Republican and Rio Grande basins. It appropriates $60 million in federal American Rescue Plan Act (ARPA) revenue that had been transferred into the state’s Economic Recovery and Relief Cash Fund. The bill seeks to reduce groundwater pumping in the Republican River Basin for purposes of interstate compact compliance, and in the Rio Grande Basin to help meet aquifer sustainability standards required by state statute and rules. Overall, 25,000 acres of irrigated land must be retired in the Republican Basin, and 40,000 acres in the Rio Grande Basin, by 2029. If the targets are not met, the state engineer may have no choice but to shut down wells without compensation.
Senate Bill 114 is designed to protect small on-stream ponds in rural areas that are critical to fighting small wildfires, but which do not have adjudicated water rights and are thus currently at risk of administration.
This bill allows a board of county commissioners to apply to the state engineer for designation of a pond as a fire suppression pond and prevents the state engineer from draining any pond designated as such. The Division of Fire Prevention and Control in the Department of Public Safety is required to promulgate rules to establish criteria for boards, in consultation with fire protection districts, to use to identify and evaluate potential fire suppression ponds.
Eligible ponds are limited to those that existed prior to June 1, 1972, and no more than 30 surface acres of pond area may be designated in any single county. The bill expressly states that designation as a fire suppression pond does not confer a water right, that these ponds do not have a priority date for purposes of determining water rights and may not be adjudicated as a water right.
Bedrock principles of Colorado water law prohibit water rights from being bought and sold solely for profit as a private commodity like other resources. Senate Bill 29 was a controversial bid to strengthen existing protections against such activities. The bill defined “investment water speculation” as the purchase of agricultural water rights “with the intent, at the time of purchase, to profit from an increase in the water’s value in a subsequent transaction, such as the sale or lease of the water, or by receiving payment from another person for nonuse of all or a portion of the water.” It would have authorized the state engineer to investigate complaints of investment water speculation and if found, impose fines, and also prohibit the buyer from purchasing additional water rights without the state engineer’s approval for up to two years.
Senate Bill 29 arose in the wake of a 2021 report exploring ways to strengthen current water anti-speculation law. Due to drawbacks with all proposed alternatives and general lack of consensus among the work group, the report did not recommend any specific concepts for implementation. Regardless, Senate Bill 29 pieced together certain concepts discussed in the 2021 report, and then when introduced, drew widespread criticism as overreaching and slipshod. In late April the original language was ultimately stricken and replaced with a call for a committee study on the water speculation issue during the interim session, though it is unclear at this point whether this additional study will actually take place.
Senate Bill 126 would have required the CWCB to prioritize funding for projects that increase or improve water storage in the South Platte River Basin as a means of increasing the beneficial consumptive use of undeveloped water entitled under the South Platte River Compact and in a manner that reduces reliance on transmountain diversions. The bill passed the Senate but was voted to postpone indefinitely by the House committee of reference.
For further information or questions about how these pieces of legislation might affect your water rights or projects (including specific funding opportunities), please contact Dan Condren at dcondren@somachlaw.com.
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