AUTHORIZATION These rules are promulgated pursuant to the authority granted the State Engineer in section 37-80-121, C.R.S. (2003) to implement a Water Administration Fee Program in the State of Colorado. ORDER OF THE STATE ENGINEER IT IS ORDERED that the following rules governing the Water Administration Fee Program are adopted by the State Engineer. Rule 1. Title. The title of these rules is Rules Governing the Water Administration Fee Program. The short title for these rules is Water Administration Fee Rules and they may be referred to herein collectively as the rules or individually as a rule. Rule 2. Scope and Purpose. A. These rules apply to the establishment and operation of an annual Water Administration Fee that is imposed upon Direct Flow Water Rights greater than or equal to 1.0 cubic feet per second and to Storage Water Rights greater than or equal to 100 acre-feet. B. The purpose of these rules is to define the relevant terms and procedures for notification to affected water right Owners of the amount, payment schedule, appeals process, and enforcement authority in assessment of the annual Water Administration Fee. C. Nothing in these rules is intended to restrict the ability of the Owner of a water right to sell, lease, option or exchange that water right in any manner permitted under Colorado law. These rules shall not be implemented in a manner that would cause material injury to the Owner of or persons entitled to use water under a vested water right or a decreed conditional water right. D. These rules, and any forms or statements used or made hereunder, apply only to the Water Administration Fee Program and shall not have any binding or precedential effect in any other proceeding or forum. Rule 3. Definitions. A. As used in these rules: 1. Owner means the person or entity that holds title to any Direct Flow Water Right adjudicated for 1.0 cfs or greater; or any Storage Water Right adjudicated for 100 acre-feet or greater. 2. Water Administration Fee means the amount assessed per Direct Flow Water Right or Storage Water Right. 3. Direct Flow Water Right means an Absolute Water Right that diverts or controls water by means of a ditch, canal, pump, pipeline, spring, drain, wastewater, well, or any other structure that conveys water to a beneficial use. 4. Storage Water Right means an Absolute Water Right that captures or impounds water in a reservoir, pond, lined gravel pit, or similar structure for a beneficial use.
5. Absolute Water Right means a right to use, in accordance with its priority, a certain portion of the waters of the state by reason of appropriation that has been adjudicated by a court of competent jurisdiction for specific beneficial use(s). 6. Invoice means an itemized financial statement that includes a list of water rights with appropriate fees, interest, terms) of payment, and other financial charges, if applicable. 7. Fund means the Water Administration Cash Fund created by section 37-80-121(4), C.R.S. (2003). 8. Non-Reservoir Water Right means a water right that temporarily stores water with the decreed amount in units of acre-feet, but is not an impoundment structure or reservoir. Consolidated well fields or ground water withdrawals from wells completed in the Denver Basin that are located outside of designated ground water basins are examples of non-reservoir structures that are decreed an annual volumetric withdrawal in acre-feet. 9. Domestic means in-house use of water for drinking, cooking, sanitation and other uses within a single-family dwelling, and does not include lawn and garden irrigation or stock watering. B. Any term used in these Water Administration Fee Rules that is defined in sections 37-80-121, 37-90-137, 37-92-103, 37-92-502, or 37-92-503 C.R.S. (2003) shall have the same meaning given therein. C. Any term used in these Water Administration Fee Rules not defined herein that is defined in other Rules and Regulations of the State Engineer shall have the same meaning given therein. Rule 4. Limitations on the Water Administration Fee Program. A. These rules do not apply to adjudicated conditional water rights, exchanges, or alternate points of diversion or storage. B. Water rights adjudicated pursuant to section 37-92-102(3) C.R.S. for minimum streamflows or for natural surface water levels or volumes in natural lakes to protect or improve the natural environment to a reasonable degree are exempt from annual Water Administration Fees. C. Ground water withdrawals from designated ground water basins pursuant to section 37-90- 106 C.R.S. are not subject to these rules and shall not be assessed an annual Water Administration Fee. D. Water rights adjudicated as federal reserved water rights are exempt from annual Water Administration Fees. E. Water rights adjudicated solely for fire protection or fire fighting are exempt from annual Water Administration Fees. F. Plans for augmentation are court-approved mechanisms to replace out-of-priority depletions in time, location and amount to protect other existing water rights from material injury. Plans for augmentation are not water rights and are not subject to annual Water Administration Fees. Water rights adjudicated for the diversion and storage structures within a courtapproved plan for augmentation are subject to annual Water Administration Fees. Direct
Flow and Storage Water Rights that include augmentation as a decreed beneficial use are subject to annual Water Administration Fees. G. Payment of the Water Administration Fee shall have no effect upon the priority of or allocation of water to a water right. Likewise, failure to pay will not impair the right to divert or store water when the water right is legally and physically able to divert or store within the priority system. H. The first Water Administration Fees shall be assessed, without proration, for the period from May 1,2003 (the effective date of Senate Bill 03-278) through October 31,2003. Thereafter the Water Administration Fees shall be assessed for each annual water administration year of November 1 through October 31. Rule 5. Identification of Water Right Ownership. A. For the purpose of identifying the representative Owner(s) of water rights subject to an annual Water Administration Fee, the following rules apply: 1. Surface water rights owned by incorporated ditch and/or reservoir companies - designation of the water right Owner may include the president, other corporate officers, or manager. Notification of the Water Administration Foe may be provided to the company's legal counsel or other designated contact person known to the Division of Water Resources as a representative of the company if corporate officers cannot be located. 2. Surface water rights owned by private individuals or entities - the water right Owner is the person(s) or entity(ies) with title to a water right, in full or partial interest. Notification of the Water Administration Fee may be provided to a designated contact person known to the Division of Water Resources. 3. Ground water rights - the Owner of record as established by ground water well permit, court decree, or documentation available to the State Engineer. Absent documentation to the contrary, the owner of the land on which the ground water well is located may be deemed the Owner of the water right and subject to applicable fees. B. Water rights owned by governmental or quasi-governmental agencies - the Owner shall be the designated agency with the contact being the local Area Manager (BLM, USBR, USF&WS), Forest Supervisor (USFS), State agency Director (Parks, DOW, Corrections, CDOT), City/Town Manager or Utilities Director, or as otherwise identified by these entities. For water conservation districts, water conservancy districts, water/sanitation districts, or water user organizations, the representative Owner may be the general manager or the president if there is no general manager. Notification of the Water Administration Fee may be provided to the district's or organization's legal counsel if no other contact pan be located. C. Absent documentation of title, the apparent Owner of a water right who has use, possession, and/or benefit of the water right may be deemed the Owner and subject to the annual Water Administration Fee. D. Identification of the representative Owner(s) of water rights subject to an annual Water Administration Fee is restricted to the relevant adjudicated water right only. The State Engineer is not responsible for determining partial ownership based upon assignment of shares of a water right that is owned by a corporation or an association.
E. The identified representative Owner(s) of a water right shall notify the Division Engineer of the appropriate Water Division of the name and address of the new Owner of the subject water right within twenty days of any change in ownership. Rule 6. Water Administration Fees. A. One annual Water Administration Fee shall be assessed on each Direct Flow or Storage Water Right. Annual Water Administration Fees will be assessed to the identified Owner(s). B. Direct Flow Water Rights that are adjudicated for agricultural irrigation, recharge, stock watering, or any combination of these three described uses will be assessed an annual ten dollar fee for each decreed water right. C. Direct Flow Water Rights that are adjudicated for any other beneficial use, or combination thereof, will be assessed an annual two hundred and fifty dollar fee for each decreed water right. D. Storage Water Rights that are adjudicated for agricultural irrigation, recharge, stock watering, or any combination of these three described uses will be assessed an annual twenty-five dollar fee for each decreed water right. E. Storage Water Rights that are adjudicated for any other beneficial use, or combination thereof, will be assessed an annual one hundred dollar fee for each water right. F. Direct Flow Water Rights that are adjudicated for agricultural irrigation and/or stock watering, plus Domestic will be assessed an initial two hundred and fifty dollar fee. The annual Water Administration Fee will be adjusted to ten dollars for each Direct Flow Water Right upon the Owner providing a written affidavit that states the water right is not used for Domestic purposes. G. Storage Water Rights that are adjudicated for agricultural irrigation and/or stock watering, plus Domestic will be assessed an initial one hundred dollar fee. The annual Water Administration Fee will be adjusted to twenty five dollars for each Storage Water Right upon the Owner providing a written affidavit that states the water right is not used for Domestic purposes. H. Water rights that are adjudicated for multiple beneficial uses, including fire protection or fire fighting as a beneficial use, will be assessed an annual Water Administration Fee in accordance with Rule 6B through 6E. Fire protection or fire fighting decreed beneficial uses(s) are excluded from the cost assessment of annual Water Administration Fees for water rights with multiple beneficial uses. I. Water rights that have been granted a change in point of diversion or storage, beneficial use(s), or place of use shall incur Water Administration Fees in accordance with Rules 6B through 6E for the original water right and the changed water right(s) if the subject water rights meet or exceed the 1.0 cubic foot per second threshold for Direct Flow Water Rights and 100 acre-feet for Storage Water Rights and the subject water rights are physically distinct and different structures. J. Water rights that have been granted a change to include an alternate point of diversion or storage shall incur Water Administration Fees in accordance with Rules 6B through 6E for the original point of diversion or storage only. The additional alternate points of diversion or storage are not a permanent transfer of water right and do not incur an annual Water Administration Fee.
K. Water rights adjudicated for agricultural irrigation, recharge, stock watering, or any combination thereof that have been granted a change in the decreed beneficial use(s) to include any other beneficial use of water, with no change in the diversion or storage location, shall be assessed one Water Administration Fee at the higher value that is in accordance with Rules 6B through Rules 6E. L. Non-Reservoir Water Rights that were decreed volumetric limits 100 acre-feet per year or greater shall be assessed a Water Administration Fee in accordance with Rules 6B or 6C. Rule 7. Water Administration Fee Notification and Invoicing Procedures. A. The State Engineer may utilize the water rights resume in each Water Division or post a notice on an appropriate diversion or storage structure to publicize the existence of a Water Administration Fee, including an appeals procedure. B. For each Absolute Water Right subject to a Water Administration Fee, the State Engineer shall notify and provide an Invoice to the Owner or representative by first-class mail delivered by the United States Postal Service that the water right is subject to an annual Water Administration Fee. C. The State Engineer shall not assess more than one fee against an Absolute Water Right in any state fiscal year. The Owner of each Absolute Water Right that is subject to an annual Water Administration Fee shall be notified of the following: 1. The Water Division and Water District in which the water right was adjudicated. 2. The name of the water right, amount, beneficial use(s), and unique identification number. 3. The amount of the Water Administration Fee. D. The Invoice for the Water Administration Fee shall also include the following information: 1. The payment due date, which shall be thirty days after receipt of the Invoice. 2. Receipt of the Invoice shall be deemed to occur four days after the Invoice is mailed, to allow four days delivery time by the United States Postal Service. 3. Payment of all fees, interest, and costs associated with these rules shall be made to the Division of Water Resources, 1313 Sherman Street, Room 818, Denver, Colorado 80203. 4. The form of acceptable payment shall be limited to Visa or MasterCard Credit cards, certified check, money order, or personal check. No cash payments will be accepted. 5. Payment received after the due date shall be subject to interest payments beginning the next calendar day after the due date. 6. Interest shall accrue at a rate of one and one-half percent per month, and shall be assessed against all outstanding debt, including applicable interest and other appropriate charges. 7. Payment received as insufficient funds shall be assessed a minimum fee of fifty dollars and be subject to applicable interest.
8. In his discretion and upon reasonable request, the State Engineer may waive the payment of interest and costs associated with these rules. E. Delinquent accounts that show no payment activity and no appeal pursuant to Rule 8 below for six months may be turned over to a collection agency. The water right Owner is responsible for repayment of the outstanding balance and accrued interest. The water right Owner is also responsible for any and all collection fees. Rule 8. Appeals Procedure. A. Within twenty days after the Invoice has been received, an Owner may protest the assessment of a Water Administration Fee in writing to the State Engineer. Such protest shall include the grounds for protest and clarification of water right ownership, if applicable. The protest may be hand-delivered to any of the seven Water Division Offices or the State Engineer's Office in Denver, Colorado. The protest may also be submitted by first class mail or electronic mail. The postmark or electronic received date may be used to verify receipt of the protest within twenty days. B. The State Engineer's Office shall transmit written notice to :he protestant within ten days of receiving the protest of its decision to accept, deny, or seek additional information regarding the protest. If the protest is denied, the State Engineer shall state the grounds for such decision in writing and payment shall be due within ten days of receipt of the decision denying the protest. C. Any appeal of the State Engineer's final decision regarding imposition of the Water Administration Fee shall be made to the District Court for the City and County of Denver pursuant to section 24-4-106, C.R.S. (2003). Rule 9. Authority to Collect Water Administration Fees and Enforcement Provisions. A. Sections 37-80-121 (2)(c), 37-92-502(5)(c) and 37-92-503(8), C.R.S. (2003) expressly authorize the State Engineer to collect the annual Water Administration Fee. B. Failure by any person or entity to pay the annual Water Administration Fee by the due date shall subject the person or entity to payment of the outstanding debt, accrued interest at one and one-half percent per month of outstanding debt, fees associated with collection, and recovery of reasonable attorney fees. The State Engineer may seek enforcement of this fee collection program in the appropriate District Court through the Colorado Attorney General's Office. Rule 10. Water Administration Fee Deposits and Disbursement. A. All moneys received as part of this program, including the annual Water Administration Fee, interest payments, and other financial costs shall be transmitted to the Colorado State Treasurer. The State Treasurer shall deposit all of said collected moneys into the Water Administration Cash Fund. 1. Moneys credited into the Fund and unexpended at the end of any given fiscal year shall remain in the Fund and shall not revert to the General Fund. 2. All interest earned on the investment of moneys in the Fund shall be credited to the Fund. 3. Moneys in the Fund shall be appropriated solely to the Division of Water Resources within the Department of Natural Resources.
B. Moneys in the Water Administration Cash Fund shall be used to cover costs associated with administration of appropriate water rights and costs associated with implementation and operation of the Water Administration Fee program. C. Moneys in the Water Administration Cash Fund shall not be used for litigation. Rule 11. Reporting Requirements. A. On or before December 1, 2004, the State Engineer shall submit a report to the General Assembly that discusses the effectiveness of the Water Administration Fee program and identifies the following: 1. The total amount of money received under the fee schedule and the disposition of such money within the Division of Water Resources. 2. The services provided by the Division of Water Resources in fulfillment of its responsibilities under Title 37 of the Colorado Revised Statutes that cannot be directly correlated to administration of water under this program. 3. All beneficiaries of the State Engineer's water administration activities established under Title 37, C.R.S. 4. Beneficiaries of the State Engineer's water administration activities established under Title 37, C.R.S. that do not pay fees under this program. 5. Alternative funding options for the State Engineer's water administration activities established under Title 37, C.R.S. 6. More cost-effective approaches to achieve the water administration objectives identified in the legislative authorization of this program, considering the activities of the State Engineer and affected entities. Rule 12. Water Administration Fee Program Time Limitation. A. These rules effectuate Senate Bill 03-278, which is codified at sections 37-80-121, 37-92-502, and 37-92-503, C.R.S. (2003). In accordance with Senate Bill 03-278, the portions of those statutory sections established by Senate Bill 03-278 and these rules are repealed automatically on July 1, 2005. B. If, after reviewing the State Engineer's report on the effectiveness of the Water Administration Fee program, the legislature extends the program, or authorizes a permanent Water Administration Fee program, the State Engineer shall review and revise these rules to address issues related to the continued operation of the Water Administration Fee program. Rule 13. Severability. If any part of these rules is found to be invalid by a court of law, the remaining rules shall remain in full force and effect. Rule 14. Effective Dates. These rules shall take effect on March 1,2004 and shall remain in effect until amended as provided by law, or until June 30,2005, whichever date comes first.
IT IS FURTHER ORDERED that any person wishing to protest these rules may do so pursuant to section 24-4-106, C.R.S. (2003) (the State Administrative Procedure Act). Any protest of these rules must be filed with the District Court for the City and County of Denver. Adopted this 9 th day of January, 2004. Hal D. Simpson, State Engineer