State Senator Simpson opposes “investment in water speculation” draft legislation — The #Alamosa Citizen

Center, Colorado, is surrounded by center-pivot-irrigated farms that draw water from shrinking aquifers below the San Luis Valley. Photo credit: Google Earth

From The Alamosa Citizen (Chris Lopez):

COLORADO State Sen. Cleave Simpson of Alamosa said this week that a legislative bill in draft form that tries to address “investment in water speculation” is not a good bill and isn’t convinced there is a “need for a bill like this.”

“What you’re really trying to do is keep water attached to the land and productive agriculture,” Simpson said in a wide-ranging interview with The Alamosa Citizen. “So for me, rather than trying to force it this way, I take the advice of (state) representative Marc Catlin, that the best way to protect that is to make sure ag stays profitable, because profitable operations generally aren’t looking to sell their water or water rights.

“I encourage people to think about the things we do in the legislature,” he added, “either from a tax policy or environmental impacts. Just don’t overregulate or overtax the industry so much and give them a chance to succeed.”

The draft bill, “Concerning A Prohibition Against Engaging In Investment Water Speculation In the State” cleared the Colorado Legislature’s Water Resources Review Committee in October and is expected to be introduced in the 2022 Legislative Session. It is being sponsored by Sens. Kerry Donovan of Eagle County and Don Coram of Montrose County, and by Rep. Karen McCormick of Boulder.

One section of the bill addresses the sale or transfer of shares in mutual ditch companies. Simpson said he is a shareholder in a mutual ditch company and doesn’t support how the draft legislation attempts to control how shares are sold or transferred.

“I just think they’re better ways to do that versus you’re on this fine line of interfering with people’s private property rights,” Simpson said. “It’s like very generally going to you and saying you bought a house and going, ‘Well, you can’t sell the house for either a profit or you can’t buy a house on speculation and then sell it for more than you paid for it.’ There’s just this fine line we’re walking down about trying to protect water and ag, and people’s private property rights.”

Why it matters:

In addition to his state senate role, Simpson is general manager of the Rio Grande Water Conservation District and is among the Colorado water experts working to address climate change and impacts on irrigitable ag land.

Through his role at the Rio Grande Water Conservation District he has worked to implement a variety of conservation measures to address the declining Upper Rio Grande Water Basin and the 20-year drought the San Luis Valley has been experiencing.

He also has been battling an effort led by former Gov. Bill Owens called Renewable Water Resources, which is a project that aims to purchase SLV ag land for its water rights and then control enough water on private land to pipe into the Front Range. Owens’ front man for the project is a person named Sean Tonner.

Asked if the draft legislation could help blunt the Renewable Water Resources project, he said it could help but he is still more concerned about the unintended consequences of the proposal.

“We have a handful of pretty rigorous and substantial barriers that make those kinds (RWR) of acquisitions and transfers pretty hard,” he said. “Not impossible, but pretty hard. I guess on the surface, this bill might give you another protection and maybe make it almost impossible. But then the unintended consequence again is, what does it do to everybody else?”

#Colorado lawmakers propose millions in funding to slash #groundwater use; curb #water profiteering — @WaterEdCO

A center pivot irrigates a field in the San Luis Valley, where the state is warming farmers that a well shut-down could come much sooner than expected. Credit: Jerd Smith via Water Education Colorado

From Water Education Colorado (Larry Morandi):

The Colorado General Assembly’s interim Water Resources Review Committee is recommending new legislation that, if approved, could set aside millions to help water-strapped regions of the state meet their obligations to deliver water to Kansas, New Mexico and Texas.

It also recommended another bill designed to curb water speculation. Both measures are expected to be considered by the Colorado General Assembly next year.

Groundwater compact compliance

The committee on Oct. 27 approved a draft bill that creates a Groundwater Compact Compliance and Sustainability Fund to help pay for the purchase and retirement of farm wells and irrigated acreage in the Republican and Rio Grande river basins. The action was taken to reduce groundwater use that diminishes surface flows and ensure compliance with interstate compacts on both rivers. Legislative appropriations and federal revenue would bankroll the fund. The Colorado Water Conservation Board would distribute the money based on recommendations from the Republican River Water Conservation District and the Rio Grade Water Conservation District, with approval by the state engineer.

So how much land are we talking about? To comply with compact water delivery obligations and groundwater sustainability rules, 25,000 acres of irrigated land would have to be retired in the Republican basin and 40,000 acres in the Rio Grande basin by 2029. To date, just 3,000 acres in the Republican and 13,000 acres in the Rio Grande have been retired from production. Absent those reductions, well pumping could be curtailed.

When asked how much money is needed, Sen. Jerry Sonnenberg, R-Sterling, whose district includes the Republican River basin, said the conservation district there is looking for $50 million in addition to the $50 million it already has. Pinning the cost down is difficult; Sonnenberg noted that, “It’s harder to retire farm ground when you have $5 [per bushel] corn than it is when you have $3 corn.”

David Robbins, general counsel to both the Republican and Rio Grande districts, testified at an earlier committee meeting that the Rio Grande would also require at least $50 million on top of the $69 million it has already raised by taxing its farmers for sustainability efforts.

Water speculation

The committee also reported a bill that it views more as a vehicle for further discussion than a finished product. It prohibits the purchaser of a water right from engaging in “investment water speculation” and empowers the state engineer to investigate alleged violations. Investment water speculation is defined as “the purchase of agricultural water rights that are represented by shares in a mutual ditch company in the state with the intent…to profit from the increase in the water’s value in a subsequent transaction…or by receiving payment from another person for nonuse of all or a portion of the water” unless it’s part of a water conservation or instream flow program.

Committee members struggled with trying to balance concerns over speculation with protecting property rights. Sen. Kerry Donovan, D-Vail, committee chair and one of the bill’s sponsors, said she continues to hear from constituents on the West Slope about what looks like investment water speculation and its impact on farming operations. At the same time, she noted other groups are sending “a very conflicting narrative now that we actually have bills to respond to…and the feedback is don’t do anything, slow down.”

Sen. Don Coram, R-Montrose, another bill sponsor, emphasized that “it’s not our intent to take away the ability of a farmer whose 401K is his water [if that water were sold], but somehow we need to put some constraints” on speculative investments. “This bill as written,” he continued, “probably doesn’t get us there, but it does give us the opportunity to work through the session.”

With that said, Coram proposed an amendment that broadened the bill’s title by shortening it, from a bill “Concerning a Prohibition Against Engaging in Investment Water Speculation in the State” to one “Concerning Water Speculation in the State.” That change provides the bill sponsors with flexibility to flesh it out over the coming months without being locked in to the current text.

Water infrastructure investment

The committee also approved a letter to the state’s Task Force on Economic Relief and Recovery Cash Fund to consider investing money in water projects. The task force was created by the General Assembly last session to receive federal dollars from the American Rescue Plan Act of 2021 and recommend how to spend it. The legislature transferred nearly $850 million into the fund and among the eligible uses are “investment in water, sewer, or broadband infrastructure.”

The legislature convenes Jan.12…

Larry Morandi was formerly director of State Policy Research with the National Conference of State Legislatures in Denver, and is a frequent contributor to Fresh Water News. He can be reached at larrymorandi@comcast.net.

Investment #water speculation bill clears the Colorado’s Water Resources Review Committee: Despite opposition from agriculture interests — @AspenJournalism

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):

Colorado lawmakers are advancing a bill aimed at outlawing water investment speculation, even as they acknowledged their attempt to address the complex problem is an imperfect one.

On Wednesday, members of Colorado’s Water Resources Review Committee voted to put forth a bill in the 2022 legislative session that aims to prohibit a buyer of agricultural water rights from profiting on the increased value of the water in a future sale. The measure is an attempt 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 draft bill gives the state engineer at the Department of Water Resources the ability to investigate complaints of investment water speculation and fine a purchaser up to $10,000 if they determine speculation is occurring. Those making a complaint could also be fined up to $1,000 if state officials deem a complaint frivolous. A second section of the bill also directs the board of directors of mutual ditch companies to set a minimum percent of agricultural water rights for one purchaser to hold that would trigger the presumption that they are engaging in investment water speculation.

Western Slope state Sens. Kerry Donovan, D-Eagle County, and Don Coram, R-Montrose County, and Rep. Karen McCormick, D-Boulder County, are sponsoring the bill.

At the beginning of Wednesday’s discussion, Donovan vented her frustration with what she called mixed messages from water managers. Most seem to agree that stopping investment water speculation is important, but no one can agree on the best way to do that.

“There was a general agreement that investment water speculation was an important issue to work on, so much so… that we invested taxpayer dollars in order to turn out a report,” she said. “We have put resources into addressing this issue and now the feedback is ‘don’t do anything, slow down.’”

Donovan was referring to a report released in August by a work group, which was tasked with exploring ways to strengthen the state’s current anti-speculation laws. The group, made up of water managers and policy experts from across water sectors, came up with a list of concepts on how to prevent water investment speculation. But they did not give clear recommendations to legislators because they could not come to a consensus on which concepts to implement.