A Review of Water Bills Before the 2003 General Assembly
IP-1-2003 (March 2003)
Author: J. Craig Green
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Executive Summary
Colorado water law developed over the last 150 years to recognize and protect private property rights in water use, despite repeated attempts to centralize and socialize the allocation of this important resource. It is perhaps the best example of private property creation and protection in the Western United States for a complicated, moving resource.
Article 16 of the Colorado Constitution sets forth the principles of water law in our state:
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 the public, and the same is dedicated to the use of the people of the state, subject to appropriation as hereinafter provided.
Diverting unappropriated water priority preferred 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.
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 of agricultural lands, and for mining and manufacturing purposes, and for drainage, upon payment of just compensation.
County commissioners to fix rates for water, when. The general assembly shall provide by law that the board of county commissioners in their respective counties, shall have power, when application is made to them by either party interested, to establish reasonable maximum rates to be charged for the use of water, whether furnished by individuals or corporations.
Thus, water not appropriated before 1876 is a public resource. The right to beneficial use of unappropriated waters “shall never denied.” Domestic use is accorded highest priority, with agricultural use second. (The Colorado Supreme Court interpreted this to apply only to condemnation in Town of Sterling v. Pawnee Ditch Extension Co., 42 Colo. 421, 94 P. 339 (1908)).Beneficial use of water is encouraged by guaranteeing a right of way for ditches. County commissioners are empowered to set charges for water use.
Rights to the use of water under Colorado water law are private property rights, which can be bought and sold, transferred to other uses and transferred to other locations. A long history of conflict and cooperation has resulted in a water law system that has steadfastly defended the rights of individuals to appropriate water. An overview of the Colorado system of water rights allocation is contained in my 2002 paper for the Independence Institute, “Use it Or Lose It: Colorado’s Oldest and Best Recycling Program.”
Some market principles that guide the wise use and allocation of water resources include:
1. Respect for private property rights.
2. Allowing supply and demand to guide water transfers, rather than “Soviet-style” statewide water planning.
3. Allowing the marketplace, not politics, to decide which water projects are feasible, sensible and beneficial.
Markets have a remarkable ability to limit uneconomic or unwise projects by requiring projects to be funded by those who want them. Markets do not guarantee that only wise projects will be built, but they do require that project proponents (or their investors) finance them, instead of forcing unsuspecting taxpayers to fund projects that are poorly conceived, nebulous, uneconomic, or even silly. In Colorado, the market discipline that requires purchasing senior water rights for new water uses tends to reduce mistakes by local governments (cities and water districts), due to competition for those water rights.
Water is an important issue for the current 2003 legislative session of the Colorado General Assembly, with 31 water-related measures introduced. The table below describes each bill, along with a YES or NO grade for consistency with free market principles, and an explanation. Bills are listed in numerical order, beginning with House Bills (HB), House Joint Resolutions (HJR), Senate Joint Resolutions (SJR) and Senate Bills (SB). Except as specifically noted, all measures below are still alive in the legislative process, or awaiting the Governor’s signature.
