Request for the Ground Water Commission to initiate Rule Making Process

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1 May 11, 2017 Keith Vander Horst Colorado Division of Water Resources 1313 Sherman Street, Room 821 Denver, CO Via Re: Request for the Ground Water Commission to initiate Rule Making Process Dear Mr. Vander Horst: I am writing on behalf of North Kiowa, LLC ( North Kiowa ) to request that the Ground Water Commission commence the stakeholder and rule making process for changes to portions of Designated Basin Rules. I have attached our letter of October 26, 2016, describing the rationale for the proposed amendments and recommendations for Rules 4, 5, 7, and 11. The portions of the Rules that North Kiowa asks the Commission to address would resolve ambiguities that have increased the administrative burden for the issuance of small capacity wells for not nontributary Denver Basin groundwater in the Designated Basins by the State Engineer. North Kiowa owns land in the Kiowa Bijou Designated Basin and is the owner of several Commission issued determinations of water rights and well permits. In March 2016, North Kiowa filed an application for a small capacity stock well in the not nontributary Dawson aquifer. The State Engineer s Office initially denied the request, in part because the Ground Water Commission had previously issued a Determination of the Dawson aquifer water underlying the property, and North Kiowa had not received approval from the Commission of a replacement plan. After meetings with State Engineer s Office staff, North Kiowa was eventually able to receive an amendment of

2 May 11, 2017 Page 2 the Determination to cancel a portion of the Dawson aquifer Determination and a small capacity stock watering well permit in April Although North Kiowa appreciates the State Engineer s Office staff s completion of the stock well request, ambiguities in the Designated Basin Rules greatly increased the time and expense required to obtain a small capacity stock watering well. This time and expense is worrisome because North Kiowa and others need the ability to receive stock well permits to which they are entitled in a timely manner. For good range management practices, stock wells need to be located optimally for proper movement of cattle between pastures. The operations of North Kiowa and other ranches could be harmed in the future by delays in issuing small capacity wells. North Kiowa therefore requests consideration of its proposed amendments. In March of 2016, the Commission requested initial input from stakeholders identifying Rules that should be considered for amendment, the type of change requested to be made, and the rationale for the changes. The Commission notice was in response to the Governor s 2012 direction to regulatory agencies to perform periodic reviews of their rules. The Commission s notice stated that after receiving comments on recommended amendments to the Rules, the Commission staff would prepare and distribute draft language to stakeholders, and that public meetings would occur to reach as much agreement as possible on amendments prior to initiation of any formal rulemaking process. To date, draft language has not been prepared and stakeholder meetings have not been scheduled. North Kiowa is concerned that no schedule for staff preparation of draft proposals or stakeholder discussion has yet been set.

3 May 11, 2017 Page 3 Therefore, North Kiowa requests that the Commission initiate changes to the Rules described in North Kiowa s comment letter of. North Kiowa asks for the Commission to consider this request at its meeting on May 18. Please call or me if you have any questions or would like to discuss this request. Sincerely, VRANESH AND RAISCH, LLP Gabe Racz, Esq. Encl. cc: Rye Austin Irene Archibald Kevin Rein Jen Mele, Esq.

4 Sent Via Keith Vander Horst Designated Basins Team Leader Colorado Division of Water Resources 1313 Sherman Street, Suite 821 Denver, Colorado Re: Rulemaking Concerning Designated Basin Rules Dear Mr. Vander Horst: We are writing on behalf of North Kiowa, LLC ( North Kiowa ), whose sole member is the Malone Family Land Preservation Foundation. In this letter, North Kiowa is providing comments concerning the Ground Water Commission s ( Commission ) review and potential amendments to the Rules and Regulations for the Management and Control of Designated Ground Water, 2 CCR ( Rules ). I. Stakeholder Process and Input from North Kiowa In March of this year, the Commission requested initial input from stakeholders by April 29, 2016, identifying those Rules that should be considered for amendment, the type of change requested to be made, and the rationale for the proposed change. A summary of initial input from stakeholders was presented to the Commission at its meeting on May 20, At the May 20, 2016 meeting, you advised the Commission that Commission staff ( Staff ) will be talking to stakeholders, and that the stakeholder process is expected to continue into next year (2017). The Commission website states that the stakeholder process is anticipated to involve public meetings, with the desire that such discussion result in as much agreement as possible on actual amendments prior to initiation of any formal rulemaking process. However, there was no discussion at the Commission meeting about the details of the stakeholder process. Further, to our

5 Page 2 knowledge, Staff has not yet distributed draft language of proposed amendments to the Rules for presentation to and discussion with stakeholders. North Kiowa owns land in the Kiowa Bijou Designated Basin and is the owner of several Commission issued determinations of water rights and well permits. North Kiowa recently identified certain big picture issues about the allocation of designated groundwater within the Denver Basin through Commission issued Denver Basin water rights determinations and appropriations of groundwater through well permits. To that end, North Kiowa is submitting this letter, which we think is timely given the status of the stakeholder process. On another note concerning procedure, a request was made at the August 19, 2016 Commission meeting to initiate a rulemaking to amend Rule to determine that the alluvial aquifer, and all of the Fan and White River aquifers, in the Upper Crow Creek designated Basin are overappropriated. Based on the Division of Water Resources website, it is our understanding that the stakeholder process has begun with respect to an amendment to that specific rule outside of the general stakeholder process for all of the Rules. It is our understanding that the Rule amendment process may be expedited. At the same meeting, there was a request to expedite a rulemaking to revise Rules 5.6 (concerning Replacement Plans) and Rule 5.8 (concerning Artificial Recharge). The Commission granted that request. We do not think that any specific rules should be expedited only to create further delay in the general stakeholder and rulemaking process. We think that all proposed changes to the Rules should be considered comprehensively in the interest of fairness to all stakeholders and in the interest of promulgating consistent amended Rules. II. Input on Potential Amendments A. Summary of Rationale for the Proposed Amendments The authority to promulgate the Rules derives from Sections , 108, 109, and 111 of the Colorado Ground Water Management Act (the Act ), codified at C.R.S et seq. See also Rule 2.1. The Act distinguishes between the appropriation of groundwater through well permits and the allocation of groundwater in the Denver Basin within designated basins through Commission issued determinations of water rights.

6 Page 3 C.R.S (1) governs applications to appropriate groundwater through Commission issued large capacity well permits and provides, in part, that [a]ny person desiring to appropriate groundwater for a beneficial use in a designated groundwater basin shall make application to the commission. C.R.S (1)(emphasis added). Once an application is granted, the state engineer shall issue a conditional permit to the applicant. C.R.S (3). There is a subsequent process for the issuance of final well permits which is not applicable to our comments. C.R.S (7) governs applications to obtain a determination of water rights in the Denver Basin within designated basins, and provides, in part, that [t]he commission shall allocate, upon the basis of the ownership of the overlying land, any designated groundwater contained in the Dawson, Denver, Arapahoe, or Laramie Fox Hills aquifers. C.R.S (7)(a)(emphasis added). 1 In order to appropriate the water allocated in a determination, the water user must obtain a well permit. C.R.S (1). A determination is a prerequisite to issuance of a large capacity well permit. C.R.S (7)(d)(II). A landowner also has the option to request a determination without requesting a large capacity well permit. C.R.S (7)(c)(I)(C). As currently drafted, the Rules do not clearly implement the distinction in the Act between the appropriation of groundwater through well permits and allocations of Denver Basin groundwater through determinations of water rights. The Rules as drafted are ambiguous and we think this has resulted in interpretations that are inconsistent with the Act. Specifically, staff have treated determinations of Denver Basin groundwater as appropriations that take all available groundwater, even if no well permits have been issued. This interpretation is inconsistent with the statutory distinction between appropriations and determinations. It also incorrectly treats a determination as an appropriation. This results in the improper denial of small capacity well permits for Denver Basin groundwater to which the landowner is entitled under C.R.S We propose that Staff consider amendments to the Rules that address this ambiguity. Because this would require revisions to several of the Rules, we are not 1 Section 107(7) also makes clear, and it is not disputed, that permits are required to withdraw water from these aquifers, and that the Commission shall adopt the necessary rules to carry out the provisions of this subsection (7). C.R.S (7).

7 Page 4 providing suggested redlines at this time; but rather, propose the concepts and our rationale. We would be happy to discuss specific language or provide redlines once we have had a chance to discuss the concept with Staff. B. Rule 5 Appropriation of Designated Ground Water The bulk of the revisions to the Rules need to be made to Rule 5. Rule 5 is titled Appropriation of Designated Ground Water, yet it arguably covers Commissionissued determinations of water rights in Rule We think the following revisions are necessary at a minimum. The title of Rule 5 should be amended to read Allocation and Appropriation of Designated Ground Water. Rule 5.1, concerning applicability, should be amended to clarify that Rule 5 covers both allocations and appropriations of designated groundwater. A separate section should be created within the rule to address criteria for allocation of designated groundwater as separate and distinct from appropriation through well permits, possibly as a revised Rule 5.3. Rule should be amended to allow for both large and small capacity well permits to be issued when a determination of water rights exists (by the Commission and State Engineer, respectively) so long as the total annual amount permitted under any well permits does not exceed the annual allocation. Rule should be revised to make it clear that replacement water is only required for Commission issued large capacity well permits as necessary based on the aquifer. Rule 5.4 should be revised to read Allocation of Designated Groundwater rather than Appropriation Rule should be revised to read an application for a determination of water rights from these aquifers C. Rule 4 We suggest adding a definition for a Determination of Water Right. Other additions and revisions may be necessary based on the language of amendments to other Rules. 2 Rule sets forth the criteria to determine the allowable rate of withdrawal and Rule sets forth the determination of saturated thickness. These findings are part of the determinations of water rights.

8 Page 5 D. Rule 7 Change of Rights to Designated Ground Water Rule 7 concerns changes of designated groundwater rights. It was promulgated pursuant to the authority given to the Commission in C.R.S (1)(h). C.R.S (1)(g) provides, in part, [u]pon application therefor by any permit holder, to authorize a change in acreage served, volume of appropriation, place, time, or type of use of and by any water right, or of any well location, either conditional or final, granted under the authority of the commission. (emphasis added). By its terms, Section 111(1)(g) limits changes to permit holders. Form GWS 67 is a form that Commission Staff provide for water users to apply to change a determination of water right. Arguably, Rule 7 encompasses changes to determinations of water rights based on the language in Rule 7.1.2, which provides, in part, that a change request may consist of but is not limited to the following. The Rules cannot exceed their statutory authority. We would like some explanation from Staff as to the legal basis for Form GWS 67, and any presumption that Rule 7 applies to changes of determinations of water rights. To be clear, North Kiowa is not opposed to changes of determinations; however, any process set forth in the Rules, or Commissionapproved forms must have a legal basis. If there is a legal basis for changes of determinations of water rights, we think amendments need to be made to Rule 7 to clearly set forth the process for changing a determination, including the application, publication requirements, fees, hearings, and any other processes. E. Rule 11 Variances As drafted, the current Rules do not allow variances for applications for determinations of water rights. Rule provides, in part, that Rule 11 is application to variance requests for all applications for new appropriations and for change applications for high capacity wells located in Designated Ground Water Basins that require Commission action pursuant to Rule 5 and Rule 7. (emphasis added). This Rule should be amended to allow variances for all applications for determinations of water rights (new and changes, if permissible pursuant to the Act). III. Conclusion Thank you for considering our proposed amendments to the Rules and our request that all proposed amendments be considered comprehensively. We would be

9 Page 6 happy to discuss this letter with you further, and would appreciate any correspondence from Staff answering the questions we have set forth. Please let us know if you have any questions. Sincerely, VRANESH AND RAISCH, LLP /s/ Gabe Racz Gabe Racz, Esq. /s/ Leila C. Behnampour Leila C. Behnampour, Esq. cc: Kevin Rein Jen Mele, Esq. Irene Archibald Rye Austin

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