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Lawmakers tackle process for leasing water rights

Bill aims to cut down on “buy and dry” sales that harm agriculture
Sam Green/The Journal file<br><br>Horses enjoy drinking the runoff water and an occassional shower from the irrigation sprinklers at Road P and Road 25.

DENVER – Colorado lawmakers are trying to streamline the process water rights owner go through to enter into short-term leases with municipalities.

To estimate how much water they are entitled to, a rights owner must undergo an engineering analysis that can cost hundreds of thousands of dollars. That is considered the most accurate assessment of the Historic Consumptive Use of the rights.

House Bill 1289, which would extend a pilot program that streamlines the assessment of consumptive use and could ease the financial impact on water rights owner by simplifying the process, was heard by the House Agriculture, Livestock and Natural Resources Committee Monday. It was laid over until next week while lawmakers consider the impacts of the program.

Rep. Chris Hansen, D-Denver, said the program has proven to be a way to save money on the front end for water rights users in the Arkansas River Valley, where it was first implemented.

But this comes at a cost in the overall amount they can charge for their water rights, as the methods used generally err on the side of caution and underestimate the Historic Consumptive Use by 10-15 percent, Hansen said. “This is in a sense the horseshoes and hand grenades approach.”

In a short term transaction that is not always a drawback beause of the amount saved by not undergoing a full analysis.

“If you were only wanting to lease your water for a year or two it might not be worth the tens of thousands of dollars, or more, that could go into those engineering studies,” Hansen said.

Some Republican members of committee didn’t necessarily agree with that and expressed concerns that this would leave farmers losing out on the value of their rights.

They were concerned that it would place additional burden of proof on owners if they believed they didn’t receive a fair share because of the conservative nature of the analysis as opposed to buyers having to prove the engineering analysis was over valuing the rights.

“You’re actually flipping this on its head,” said Rep. Hugh McKean, R-Loveland.

Hansen disagreed, saying the bill doesn’t require the use of the program or say that it must be used by water court when deciding the value of rights.

John Stulp, water policy advisor for Gov. John Hickenlooper, agreed the program isn’t meant to be and end-all answer that would limit water right owners recourse in seeking adequate compensation for their resource.

“This is an attempt to kind of cut out a certain amount of that engineering and legal theory discussion on how the water really flows or doesn’t flow,” Stulp said.

The aim is to cut down on incidents of “buy and dry,” where a farmer sells his or her water rights to a municipality and loses the resource critical to cultivating the land.

Simplifying the process will make it easier for farmers to lease their water rights over a short term, rather than racking up vast sums of debt from engineering analysis and court costs arguing over the exact consumptive use of their rights.

While it is uncertain if there would be bipartisan support for the bill in the House, it is sponsored by Sen. Don Coram, R-Montrose, in the Senate.

“We’d like to have bipartisan support in both chambers but… we’ve got that in the Senate and I hope we can find that in the House as well,” Hansen said.


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