Colorado Board Adopts Rules For "Recreational In-Channel Diversion" Water Rights
Christopher L. Thorne
January 15, 2002


Introduction
Rules promulgated by the Colorado Water Conservation Board (the "CWCB") concerning Colorado's statutorily recognized "recreational in-channel diversion" ("RICD") water right became effective with the New Year. See 2 Colo. Code Regs. § 408-3. The RICD rules were called for in legislation, commonly referred to as "Senate Bill 216," and passed by the Colorado General Assembly in 2001. See Colo. Rev. Stat. § 37-92-102(6)(a) (2001). Senate Bill 216 recognized in-channel water right principles announced by the Colorado Supreme Court in a decision involving an in-channel water right in a section of the Cache La Poudre River. See City of Thornton v. City of Fort Collins, 830 P.2d 915 (Colo. 1992). The legislation also imposed some significant limitations on such water rights in an apparent response to subsequent in-channel flow requests filed by several Colorado municipalities, including a controversial application filed by the City of Golden. Practical aspects of adjudicating RICD water rights under Senate Bill 216 and the CWCB's RICD rules should become apparent relatively quickly, as several additional requests for such water rights have already been filed with Colorado's Water Courts and more are anticipated.

Background
In Colorado, the CWCB is vested by statute "with the exclusive authority . . . to appropriate . . . such waters of natural streams and lakes as the board determines may be required for minimum stream flows . . . to preserve the natural environment to a reasonable degree." Colo. Rev. Stat. § 37-92-102(3) (2001). In practice, the CWCB exercises this authority only in circumstances where a natural "environment can exist without material injury to water rights." Rules Concerning the Colorado Instream Flow and Natural Lake Level Program, 2 Colo. Code Regs. § 408-2, at 6.22.

In 1986, the City of Fort Collins (located along Colorado's Northern Front Range) sought a water right for flows of 55 c.f.s. for recreational, piscatorial and wildlife uses, in conjunction with two "diversion dams" constructed in the channel of the Cache La Poudre River. One dam was intended to "divert the Poudre River back to its 'historic channel,'" adjacent to property planned for development as a nature center, while the second dam included "a boat chute and a fish ladder designed for recreational use and piscatorial preservation respectively." City of Fort Collins, 830 P. 2d at 920. The CWCB, the Colorado State Engineer, and other parties opposed Fort Collins's application "largely based on the claim or impression that Fort Collins was applying for minimum stream flow rights contrary to law." Id. In ruling in favor of Fort Collins on this issue, however, the Colorado Supreme Court held that because the two dams either remove "water from its natural course or location or control[] water within its natural course or location," a "diversion" of water had occurred sufficient to support Fort Collins's claim of a valid appropriation. Id. at 931.

In the wake of Fort Collins, approximately five additional Front Range and mountain resort communities in Colorado (including the municipalities of Littleton, Golden, Breckenridge, and Aspen) and one set of private individuals requested water rights for kayak or boating courses comprised of rock control structures constructed in the stream bed to create standing waves and other water features that are used by recreational boaters. The most publicized of these requests was filed in late 1998 by the City of Golden (located on the western outskirts of Denver), which claimed flows of up to 1,000 c.f.s in some months for its whitewater kayak course in Clear Creek. See Concerning the Application for Water Rights of the City of Golden, Case No. 98CW448 (Water Division No. 1, filed December 30, 1998). The application has been characterized as claiming all of the available flow in Clear Creek at certain times, and was initially opposed by numerous parties, including upstream water users, the CWCB, and the Colorado State Engineer.
After a trial concerning the contested aspects of Golden's application, the Water Court issued a decree awarding absolute or conditional water rights to Golden for the kayak course for the flow amounts requested, ruling (1) that the "dam structures and flow deflector control devices" which comprise the course operated to "divert" water under Fort Collins; and (2) that "Golden's constitutional right to appropriate a new water right . . . may not be denied or limited based upon the public trust doctrine, or similar policy restraints purportedly rooted in concern for the quantities that should be left for future water users." Water Court Decree, Case No. 98CW448, at 8 (Water Division No. 1, June 13, 2001).
The CWCB and the Colorado State Engineer appealed the decree entered by the Water Court on Golden's application to the Colorado Supreme Court. The appeal remains pending in Case No. 01SA252, with the appellants' opening brief due by February 7, 2002.

Senate Bill 216
In response to the numerous pending and anticipated future filings seeking water rights for in-channel recreation, and apparent concerns regarding the potential impact of such water rights on future water development, the Colorado General Assembly amended Colorado's Water Right Determination and Administration Act of 1969 (the "Act") by passing Senate Bill 216. This legislation was the product of compromise between competing views concerning how RICD water rights should fit within Colorado's water administration system expressed by various water users, recreational communities, and others.
The significant aspects of Senate Bill 216, which became effective on June 5, 2001, include the following:

1. The statutory definition of "beneficial use" was revised to include "the diversion of water by [various local governmental entities] for recreational in-channel diversion purposes." The definition of "diversion" was similarly revised. See Colo. Rev. Stat. §§ 37-92-103 (4), (5).

2. A somewhat amorphous definition of "recreational in-channel diversion" was added to the Act, providing that this term "means the minimum stream flow as it is diverted, captured, controlled, . . . and placed to beneficial use pursuant to an application filed . . . for a reasonable recreation experience." Colo. Rev. Stat. §§ 37-92-103 (10.3) (emphasis added).

3. All applications for an RICD water right must be evaluated by the CWCB (and may be subject to a hearing before the CWCB, if requested by any party or any member of the CWCB's Board of Directors), which shall provide to the Water Court within ninety days, "findings of fact and a final recommendation as to whether the application should be granted, granted with conditions or denied." The CWCB's findings and recommendation are to be based on six statutory factors described below. The CWCB's findings of fact "shall be presumptive as to such facts" in the Water Court proceedings. Colo. Rev. Stat. §§ 37-92-102 (5), (6), and 37-92-305 (13).

RICD Rules
In addition to addressing various procedural aspects of the CWCB's evaluation of RICD water right claims (e.g., requirements relating to notice, party status, hearing procedures, etc.), the RICD rules somewhat expansively interpret the statutory factors on which the CWCB's findings and recommendation to the Water Court must be based. These statutory factors include the following:

1. whether the requested RICD water right would impair Colorado's ability to fully develop and place to "consumptive beneficial use its compact entitlements;"

2. the appropriate stream reach required for the intended use;

3. whether access exists for recreational in-channel use;

4. whether exercise of the RICD would materially injure an in-stream flow appropriation by the CWCB; and

5. whether the RICD would promote maximum utilization of waters of the state.

See Colo. Rev. Stat. §§ 37-92-102 (5), and 2 Colo. Code Regs. § 408-3, at 7.

The RICD rules identify more than twenty specific, additional issues or matters that the CWCB may consider in making findings under the statutory factors. For example, in evaluating whether a requested RICD might impair Colorado's ability to beneficially use its compact entitlements, the rules provide that the CWCB may consider "the proximity of the RICD to suitable upstream points of diversion or storage which may be utilized by those who would place the water to consumptive beneficial use." 2 Colo. Code Regs. § 408-3, at 7.a. Similarly focusing on potential traditional water uses that could occur in the future, the rules provide that in evaluating "maximum utilization" under the statute, the CWCB may consider "whether there are any probable future changes, transfers, or exchanges of water rights from points of diversion downstream of the reach affected by the RICD to points upstream of or in the reach affected by the RICD." 2 Colo. Code Regs. § 408-3, at 7.e.

Conclusion
It remains uncertain how Senate Bill 216 and the RICD rules will be applied in practice by the CWCB and Colorado's Water Courts. Some questions will be answered soon, however, as at least two Colorado municipalities (Pueblo and Longmont) filed requests for RICD water rights in December 2001, and additional similar filings by other municipalities or districts are anticipated.

Chris Thorneis a partner in Holland & Hart LLP's Denver office,and chairs the firm's water practice.