Denver Law Review Volume 50 Issue 3 Symposium - Colorado Property Law Article 4 March 2021 Report to Governor John A. Love on Certain Colorado Water Law Problems John Undem Carlson Follow this and additional works at: https://digitalcommons.du.edu/dlr Recommended Citation John Undem Carlson, Report to Governor John A. Love on Certain Colorado Water Law Problems, 50 Denv. L.J. 293 (1973). This Article is brought to you for free and open access by the Denver Law Review at Digital Commons @ DU. It has been accepted for inclusion in Denver Law Review by an authorized editor of Digital Commons @ DU. For more information, please contact [email protected],[email protected]. REPORT TO GOVERNOR JOHN A. LOVE ON CERTAIN COLORADO WATER LAW PROBLEMS' By JOHN UNDEM CARLSON** In a semi-arid state like Colorado, the importance of water and the uses to which it is put loom large. As this resource approaches full utilization, concern that social and environ- mental values be protected becomes paramount. The resolution of these concerns is complicated by a system of water law rooted in the state constitution. The potentialities for and the difficulties of solution of the resource management problem within Colorado's water law system are highlighted in this article which should provide an impetus toward solution of the problems surrounding this most necessary and somewhat unpredictable resource. Originally a report prepared for Gov- ernor John A. Love, this article examines the water law of Colorado as it presently exists, and analyzes this body of law in relation to the state's interest in social and environmental uses. The footnote format has been changed to conform to the Uni- form System of Citation, and there have been minor organiza- tional changes in order to conform to Law Journal format; otherwise, the text as within sections is substantially as it ap- pears in the original report. CONTENTS INTRODUCTION .............................................................. 294 I. ELEMENTS OF APPROPRIATION AND THE NATURE OF THE R IGHT CREATED ---------------------------------------................298 A. Elements of a Water Right ....................................... 298 B. Transmountain Diversions ........................................... 301 C. The Property Right in Water ................................ 306 D. Conditional W ater Rights ........................................... 308 E. Preferences ................................................................. 309 F. Changes in W ater Rights ............................................ 315 II. WHAT IS THE STATE OF COLORADO'S INTEREST IN WATER ....... 318 III. OBSERVATIONS ..................... ................ 327 A. Impetus to Consumptive Water Uses ...................... 327 B. Recognition of Social and Environmental W ater Values ..................................................................... 328 C. Prospects for State Impact on Future W ater Uses ........................................................... 330 293 DENVER LAW JOURNAL VOL. 50) 1. An Overview .......................................................... 330 2. Conditional Decrees ................................................ 332 3. Some Limitations on State Activity ................... 336 D. Transmountain Diversions and United States Claims for W ater Rights ............................................ 336 IV. WHAT EFFECT CAN THE STATE HAVE ON FUTURE W ATER USES? ........................... 339 A. Can the State Constitutionally Affect the Present Place or Nature of Use of Existing W ater R ights? ------------------------------------------------339 B. Regulation of Changes in Water Rights .................. 342 INTRODUCTION T HE doctrine of prior appropriation was law in Colorado before statehood and adoption of the constitution in 1876,1 which, in article XVI, sections 5 and 6, recognized and con- firmed prior appropriation as the fundamental water law of the state.2 The origin of this system of water law lies in the obvious scarcity of water in the arid West, the belief that natural re- sources (water, land, minerals) should be placed in private hands to foster growth and development, and the desire to allocate the scarce resources among the builders of the state with sufficient definiteness so that economic investments would be based on a stable footing. The allocation of water in an appropriation doc- trine state rests on the fundamental notion of "first in time, first in right"; that is to say, the first person to use water acquires the right to its future use as against later users. This kind of allocation of resources is not peculiar to water; in the 19th century the public domain of the United States was opened to the populace on very much the same basis. The first person to locate a mining claim could, by performance of certain acts of development of the mineral resources, obtain good title to the claim.3 The first settler to locate on a home- * This article is based on a report prepared for Governor John A. Love by the firm of Holland & Hart. It is printed here with permission of the Governor. ** Partner, Holland & Hart, Denver, Colorado; B.A., 1962, University of Montana; B.A., 1964, Oxford University; LL.B., 1967, Yale University. The author gratefully acknowledges the contributions of James E. Hegarty, Frank H. Morison, Jack L. Smith, and Jeanette P. Meier in the preparation of this article. 1 Coffin v. Left Hand Ditch Co., 6 Colo. 443 (1882). 2 COLO. CONST. art. XVI, §§ 5-7 provide: Section 5. Water of streams public property. The water of every natural stream, not heretofore appropriated, within the state of Colorado, is hereby declared to be the property of COLORADO WATER LAW PROBLEMS stead site could, by performance of certain acts of develop- ment of the virgin prairie, obtain good title to the lands.4 The settlement and development of the West were promoted by these policies. In the early development of prior appropriation law, it was clear that a judicial decree did not create the water right; the right was created by diversion of water and application to beneficial use. The judicial decree was merely evidence of its place within the priority system. Failure to participate in adjudication proceedings rendered the right junior to those who sought decrees. 5 This recording system for priorities has been held not to affect those water rights perfected prior to the adoption of statutory adjudication procedure.6 Determinations of water rights in Colorado were purely judicial matters until the passage of the Water Right Determi- nation and Administration Act of 1969 (hereafter referred to as the "1969 Act") .7 The 1969 Act added some element of an administrative law approach to determinations of water rights, in that most water matters may now be heard initially by "referees." It remains true, however, that Colorado continues to employ a judicially oriented and judicially derived water law rather than an administrative water law. In this respect Colo- rado has rejected the administrative permit system long ago the public, and the same is dedicated to the use of the people of the state, subject to appropriation as hereinafter provided. Section 6. Diverting unappropriatedwater -priority pre- ferred uses. The right to divert the unappropriated waters of any natural stream to beneficial uses shall never be denied. Priority of appropriation shall give the better right as between those using the water for the same purpose; but when the waters of any natural stream are not sufficient for the service of all those desiring the use of the same, those using the water for domestic purposes shall have the preference over those claiming for any other purpose, and those using the water for agricultural purposes shall have preference over those using the same for manufacturing purposes. Section 7. Right-of-way for ditches, flumes. All persons and corporations shall have the right-of-way across public, private and corporate lands for the construction of ditches, canals and flumes for the purpose of conveying water for domestic purposes, for the irrigation cf agricultural lands, and for mining and manufacturing purposes, and for drainage, upon payment of just compensation. 3 30 U.S.C. §§ 22 et seq. (1970). 4 Desert Land Act of 1877, 43 U.S.C. §§ 321-39; Homestead Act, ch. 75, 12 Stat. 392. 5 Hardesty Reservoir, Canal & Land Co. v. Arkansas Valley Sugar Beet & Irrigated Land Co., 85 Colo. 555, 277 P. 763 (1929). This result was codified in COLO. REv. STAT. ANN. § 148-21-22 (Supp. 1971). 6 Larimer & Weld Reservoir Co. v. Fort Collins Milling & Elevator Co., 60 Colo. 241, 152 P. 1160 (1915). 7 CoLo. REv. STAT. ANN. §§ 148-21-1 et seq. (Supp. 1969, as amended, Supp. 1971). DENVER LAW JOURNAL VOL. 50 adopted in the other appropriation states. Colorado is fast reaching the point where there is little "unappropriated" water left. The lawful demands of all decreed rights plus the demands of conditionally decreed rights and applications for conditional rights may be sufficent to consume the available water in the stateft If this assumption about avail- able water is correct, the legal procedures by which a new water right is created are less significant for the future of Colorado than are the legal procedures by which existing water rights are changed or transferred, and by which existing conditional de- crees are made absolute. As a general principle, the owner of a water right is free to change the place or nature of use thereof, subject only to the condition that the change will not "injuriously affect the owner of