Legal Developments

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by Larry MacDonnell

Colorado water
On May 19, 2003 the Colorado Supreme Court announced a 3-3 deadlock in the case of State Engineer v. City of Golden. The effect is to leave in place the decision of the water court awarding a decree for the city’s appropriation of in-channel flows in Clear Creek to support a city-constructed kayak course. In 2001 the General Assembly established special rules for such recreational in-channel appropriations. Appropriations made by the cities of Golden, Breckinridge, and Vail prior to this enactment remain intact by virtue of the Supreme Court’s action.

On April 30, the Supreme Court upheld the water court decision finding that the State Engineer did not have authority to allow out-of-priority well pumping in the South Platte Basin. In Simpson v. Bijou Irrigation Co., the Court agreed that such well pumping requires a court-approved plan for augmentation. Meanwhile the General Assembly passed Senate Bill 73, giving the State Engineer authority to approve annual substitute water supply plans for up to three years to give well pumpers in the South Platte time to get a court-approved plan for augmentation. In contrast, the General Assembly allowed out-of-priority well pumping in the Arkansas basin to continue under State-Engineer approved replacement plans.

Conservation Easements
As of January 1, 2003 donors of perpetual conservation easements on their Colorado properties became eligible for up to $260,000 in state income tax credits. The first $100,000 of value can be taken dollar-for-dollar. The next $160,000 of credits is based on 40% of the appraised value of the easement beyond $100,000. Combined with the federal income tax benefits for conservation easements, a good incentive for conservation just got better.

Conservation Banks
On April 17, 2003 the U.S. Fish and Wildlife Service, the Federal Highway Administration, and the Colorado Department of Transportation signed an agreement putting in place Colorado’s first conservation bank. The East Plum Creek Conservation Bank holds credits for the permanent protection and management of riparian habitat important to the threatened Preble’s meadow jumping mouse. CDOT/FHWA may use bank credits to offset unavoidable impacts to Preble’s habitat in other locations.

CDOT installed seven check dams in a severely degraded segment of East Plum Creek in the Town of Castle Rock. The check dams captured sediments, thus rebuilding the streambed in this segment and restoring adjacent alluvial groundwater elevations. The riparian vegetation is already showing evidence of renewal from this reconnection to its critical source of water.

On May 2, the Director of the US Fish and Wildlife Service issued long-awaited guidance for the establishment, use, and operation of conservation banks. The guidance can be found on the endangered species page of the Fish and Wildlife web site (www.fws.gov/).

Coal-bed Methane and Water Quality
The 9th Circuit Court of Appeals decided that the discharge of groundwater associated with coal-bed methane requires a permit under the Clean Water Act. In Northern Plains Resource Council v. Fidelity Exploration and Development Co., the Court found that the water contained several chemical constituents identified as pollutants under EPA regulations. Even though the discharger had not added the pollutants to the water it was deemed to be responsible for their discharge into water of the United States from a point source and thus required to obtain a permit. Montana law exempting such discharges from permits requirements was found to be contrary to overriding obligations of the federal Clean Water Act. The Ninth Circuit has stayed its ruling pending U.S. Supreme Court consideration of a review.

Section 401 of the CWA and FERC Licensing
The District of Columbia Court of Appeals held that installation of larger turbine generators at a federally-licensed hydropower dam triggered the requirements of Section 401 of the Clean Water Act. In Alabama Rivers Alliance v. Federal Energy Regulatory Commission, the Court focused on the potential adverse water-quality effects associated with the increased discharge of water through the new turbines. Section 401requires applicants for a federal license or permit involving any discharge into waters of the United States to obtain certification from the state that its discharge will comply with water quality standards and other appropriate state requirements.