2022 #COleg: River District addresses controversial #water speculation bill: Amendment says getting paid to not use water could result in abandonment — @AspenJournalism #cwcac2022

The Government Highline Canal flows past Highline State Park in the Grand Valley. Water Asset Management, a New York City-based hedge fund, has been buying up parcels of land that are irrigated with water from the canal.
CREDIT: BETHANY BLITZ/ASPEN JOURNALISM

From Aspen Journalism (Heather Sackett):

An organization that works to keep water on the Western Slope is taking a stab at rewriting an unpopular piece of proposed legislation aimed at preventing speculators from profiting off of water.

The Colorado River Water Conservation District board of directors voted at its quarterly January meeting to present to legislators an amendment to Senate Bill 29, which addresses investment water speculation. The River District is attempting to use the abandonment principle of water law to address investment water speculation. Invoking the well-known adage of “use it or lose it,” the amendment says that if someone is getting paid to not use their water, they could be punished by losing their water right.

Every 10 years, engineers from Colorado’s Division of Water Resources review every water right to see if it has been used at some point in the previous decade. If it hasn’t, the water right could end up on the abandonment list and the owner has to oppose the listing in water court to try to keep the water right. In Colorado, a user must put their water to “beneficial use,” meaning using the water for what it was decreed for, such as growing crops.

The River District is proposing that someone’s water right could be considered abandoned in much less time than 10 years — perhaps only a matter of days — if they are being paid to not use their water. The concept would not apply to approved water conservation programs, such as those set up by state officials.

“The amendment that we are talking about basically creates a penalty for someone who is not using water if they are being paid to do so and it is outside of a state-sanctioned program,” said River District general manager Andy Mueller. “We have to make sure people are using or not using their water rights for purposes they are not decreed for, and that’s really where we see the speculation potential threat coming in.”

As an example, Mueller said municipal providers in the water-short lower basin states such as Arizona, could pay farmers in western Colorado to let their water run downstream for the benefit of Arizona water users. He said he has not yet seen any lower basin entities paying to reduce water use in Colorado, but that it could happen in the future.

“Our concern is focused on how do you prevent that or have a penalty that’s meaningful, and the abandonment statute seems like a really great way to do that,” he said.

The “strike-through” amendment, if legislators accept it, would essentially replace the current version of the bill.

Mark Harris, General Manager of the Grand Valley Water Users Association, checks on the entrance to Tunnel 3, where water in the Government Highline Canal goes through the mountain to Palisade, continuing to Grand County. Photo credit: Bethany Blitz/Aspen Journalism

Opposition from agriculture

The River District’s amendment is an attempt to revise the current proposed legislation, which has not found support from agricultural water users. Even the bill’s Western Slope sponsors — Kerry Donovan, a Democrat from Eagle County, and Don Coram, a Republican from Montrose — acknowledge it is imperfect.

The bill as currently proposed aims to prevent a buyer of agricultural water rights from profiting on the increased value of the water in a future sale by giving the state engineer at the Department of Water Resources the ability to investigate speculation claims and levy fines. Lawmakers are trying to prevent out-of-state investors from making a profit off a public resource that grows scarcer in a water-short future driven by climate change.

The bill has been introduced in the Senate and will be considered by the Agriculture and Natural Resources Committee.

But it has been met with opposition from agricultural producers, one of the very groups that it is trying to protect and who say they don’t want the state peering into their private property transactions.

Although some agricultural water rights owners recognize there could be negative impacts to their communities if water is sold to investors, they don’t want the state making the process of selling their ranch harder or placing restrictions on whom they can sell to or their ability to make a profit. This leaves some posing the question: Whom is the bill for?

“Why are people running a bill if the constituency is not interested and they don’t feel the bill is properly vetted?” asked Joe Bernal, a Loma farmer and president of the Grand Valley Water Users Association, an organization that provides irrigation water to farmers in the Fruita area.

The Colorado Farm Bureau, too, has concerns about the bill and, in a letter sent in October to the Water Resources Review Committee, says the bill could unintentionally negatively impact farmers and ranchers. Farm Bureau State Affairs Director Austin Vincent said the organization is aware of the River District’s proposal but has not taken a position on it.

The Glenwood Springs-based River District represents 15 counties on the Western Slope and often advocates for agricultural water interests. The organization has historically taken an active lobbying role. Some board members thought it better to oppose the bill or ignore it altogether — with the assumption that it, as currently written, will die on its own — rather than try to rewrite the legislation.

The board was split 8-5 in favor of presenting the amendment to lawmakers. Pitkin County Attorney and River District representative John Ely voted against advancing the amendment.

“I thought it was just cleaner to oppose something you feel is poorly written than try to amend it,” he said. “It’s a lot of work to rewrite a bill.”

State Rep. Dylan Roberts, second from left and State Sen. Kerrys Donovan, second from right, both who represent Western Slope districts, participate on a panel at Colorado Water Congress in January. Donovan is a sponsor of a bill that aims to tackle investment water speculation. CREDIT: HEATHER SACKETT/ASPEN JOURNALISM

Speculation concerns

Last year, lawmakers tasked a work group composed of water managers and policy experts from across water sectors with exploring ways to strengthen the state’s current anti-speculation laws. The group, which included Bernal and River District general counsel Peter Fleming, came up with a list of eight concepts on how to prevent water investment speculation. But the group did not give clear recommendations to legislators because they could not come to a consensus about which concepts to implement.

That inability to find consensus and make recommendations, to Bernal, meant that lawmakers should drop their attempts to put forward a bill.

“It seems to me that this legislation has taken on a life of its own. For what reason, I don’t know,” he said at last month’s Colorado Water Congress conference in Aurora. “I would like to know why legislators are not listening to the team of experts.”

But Donovan said it is now the job of legislators to delve into the report and figure out how to navigate from there. She said lawmakers will get input from stakeholders about next steps.

“A lot of us acknowledge that it’s going to be hard to advance this session an anti-investment speculation bill, but enough of us have heard from our constituents that it’s an important enough issue that we at least need to try,” she said. “My goal this year is to just keep the conversation going.”

The anti-speculation bill is, in part, an attempt by lawmakers to address concerns in the Grand Valley, where a New York City-based private-equity firm has been acquiring irrigated farmland. Water Asset Management is now the largest landowner in the Grand Valley Water Users Association. But under Colorado water law, as long as WAM keeps putting the water to beneficial use by keeping the land in agricultural production — which it appears to be doing — it doesn’t count as speculation.

Even though Bernal doesn’t support the proposed anti-speculation bill, he is still wary of WAM.

“I am concerned about outside interests buying up property in the valley and large blocks of it,” Bernal said. “We as a community are keeping our eyes wide open.”

Aspen Journalism covers water and rivers in collaboration with the Vail Daily. This story ran in the Feb. 4 edition of the Vail Daily.

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