Section ___. Water Rights.
A) Water Rights Included. The parties agree that it is appropriate to include certain
water rights beneficially used on the Property [or whatever term is used to define
the land that is subject to the conservation easement] in this Conservation
Easement Deed [or whatever term is used for the easement document] (the “Water
Rights”). The “Water Rights” consist of all of the Grantor’s right, title, and
interests in and to the water and water rights described on Exhibit __, [NOTE:
ALTERNATIVE LANGUAGE FOR USE IN SUCH EXHIBIT ARE
ATTACHED AND SHOULD BE ATTACHED AS AN EXHIBIT TO THE
CONSERVATION DEED] together with all associated canals, ditches, laterals,
headgates, springs, wells, ponds, reservoirs, water shares and stock certificates,
water allotments, contracts, units, permits, easements and rights of way, and
irrigation equipment.
B) Permitted Water Uses. The parties agree that the Water Rights are hereby
dedicated and restricted exclusively for conservation purposes, including, but not
limited to, the Conservation Values of the Property, agricultural, wildlife habitat,
horticultural, wetlands, recreational, forest, or other uses consistent with the
protection of open land, environmental quality, or life-sustaining ecological
diversity (the “Permitted Water Uses”). The preferred Permitted Water Uses are
the continued irrigation or other historical use of the Water Rights by the Grantor,
and the Grantor shall have the paramount right to use and enjoy the Water Rights
on the Property consistent with recent historical practices. In the event that the
Grantor can no longer use the Water Rights for their historical purposes, the
Water Rights shall be used for other Permitted Water Uses. The Grantor shall
have the right to maintain, repair, and if destroyed, reconstruct any existing
facilities related to the Water Rights (such as ditches, wells, and reservoirs),
unless the Conservation Values of the Property would be irreversibly damaged
thereby, as determined by the Grantee in its reasonable judgment.
C) Restrictions on Water Rights. The parties agree that the Grantor may not (1)
change the Water Rights to or use the Water Rights for municipal, industrial,
commercial, or any other new uses; (2) change the Water Rights for use other
than on the Property; (3) sell or lease the Water Rights, or encumber them
separately from the Property or otherwise legally separate them from the
Property; or (4) have the points of diversion, or the type or the place of use within
or without the Property changed, except after the Grantor’s receipt of a written
determination by the Grantee that such changes are not inconsistent with the
Permitted Uses and will not impair the Conservation Values of the Property. The
Grantor shall not construct, or permit others to construct, any new diversion,
storage, or other water structures upon the Property, shall not develop any
conditional water rights for use on the Property, and shall not otherwise undertake
any new development of water resources for use on the Property without the prior
written approval of the Grantee, which approval shall not be unreasonably
withheld.
D) Protection of Water Rights. In order to preserve and protect the Conservation
Values of the Property, the Grantor shall continue the recent historical use of the
Water Rights on the Property consistent with the Conservation Values and shall
not abandon or allow the abandonment of any of the Water Rights, by action or
inaction. The Grantor shall annually report to the Grantee the nature and extent of
use of the Water Rights during the prior year, which report need not be in writing,
but shall include copies of any reports submitted to the State or Division Engineer
or Water Commissioner by the Grantor. The Grantor shall provide the Grantee a
copy of any written notice received by the Grantor from any state water official
concerning the use, or possible abandonment, of the Water Rights.
If the Water Rights appear on the decennial abandonment list or the Grantee
determines that the Water Rights are otherwise subject to a threat of
abandonment, the Grantee shall give the Grantor written notice of such threat of
abandonment and shall meet with the Grantor to discuss the matter. If, and only if,
the Grantor fails to cure the threat of abandonment within 90 days of receiving
such notice from the Grantee, the Grantee shall, in addition to any other remedies
available to the Grantee under this Conservation Easement Deed or law, have the
right to (1) enter upon the Property and undertake any and all actions reasonably
necessary to continue the historical use of the Water Rights, if desired by the
Grantee; and (2) seek removal of the Water Rights from the decennial
abandonment list. If the Water Rights remain subject to abandonment, the
Grantor may, after consultation with the Grantor, seek to change the Water Rights
to another Permitted Water Use, including but not limited to use for instream
flow. The Grantor agrees to cooperate in any manner necessary to accomplish
such changes, and authorizes and appoints the Grantee as its agent and attorneyin-fact to file for and obtain any administrative or judicial approvals required to
effectuate such changes.
E) Change of Conditions. Grantor expressly waives any claim to use, change or
transfer all or any part of the Water Rights other than as provided in this
Conservation Easement, regardless of any future change in circumstances, change
in values, or other reasons, based on any theory of reasonable accommodation or
other theory that would release any or all of the Water Rights from the provisions
of this Conservation Easement without the Grantee’s express written consent,
which can be granted, withheld or conditioned in Grantee’s sole discretion.
F) Recording encumbrance on stock certificates. If the Water Rights include any
shares in ditch or reservoir companies, the Grantor shall promptly submit the
related stock certificate(s) to the appropriate ditch and reservoir company for
inclusion of the following notation thereon: “These shares are subject to the terms
and restrictions set forth in the Conservation Easement Deed from _______ to
_________ recorded in the Real Property Records of ___________ County,
Colorado on __________, 20__ at Reception No. __________________.” A copy
of the reissued stock certificate(s) shall be promptly provided by the Grantor to
the Grantee.
G) [Optional provision for instream loans] Temporary Instream Flow Use of Water
Rights. The parties recognize that adverse environmental conditions, such as
drought, occur from time to time, and that such conditions may pose a greater
threat to the environmental quality and life-sustaining ecological diversity of
streams, rivers, lakes, and reservoirs than to the Conservation Values of the
Property. Therefore, the parties agree that the Grantor may enter into legally
enforceable water leases, contracts, emergency water loans, or similar agreements
for conservation purposes to temporarily increase instream flows and/or water
levels in streams, rivers, lakes, and reservoirs to preserve the natural environment
of such water body(s), provided that (1) the conservation organization has given
its prior written consent to such arrangements, and (2) the water rights shall not be
used for such uses more than three out of every 10 years without a written
determination by the Grantee that such use would not jeopardize the long-term
Conservation Values of the Property.
EXHIBIT __.
WATER RIGHTS
1. [When the water rights to be included in the conservation easement can be
described with specificity, include as much detail as possible, i.e., name of water
right, source of water, amount, court and case number, date(s) of appropriation
and date(s) of adjudication, well permit number(s), allotment contract(s), and/or
certificate number(s) for shares in ditch and reservoir companies.]
2. [When the water rights to be included in the conservation easement cannot be
described with specificity, but the intent of the parties is to include all of the
water rights.] The “Water Rights” consist of all of the Grantor’s right, title, and
interests in any and all water and water rights of any kind or nature historically used
on the Property, together with all canals, ditches, laterals, headgates, springs, ponds,
reservoirs, water allotments, water shares and stock certificates, contracts, units,
permits, wells, easements and rights of way, and irrigation equipment associated
therewith. The Water Rights include surface water rights and groundwater rights
(tributary, nontributary, not nontributary, and designated), whether decreed or
undecreed.
CHECKLIST OF WATER RIGHTS PROVISIONS IN DEED OF
CONSERVATION EASEMENT
DESCRIPTION OF ENCUMBERED WATER RIGHTS
Description of each water right (or portion thereof) encumbered by the
deed (may be an exhibit), including, if applicable:
Name of water right
Source of water
Court and case number
Permit number and issuing agency
Date of appropriation
Date of adjudication and/or permit
Well permit number(s)
Allotment contract(s)
Certification number(s) for shares in ditch, reservoir, and irrigation
companies
Statement that encumbered water rights include associated headgates,
canals, ditches, laterals, springs, wells, ponds, reservoirs, water shares
and stock certificates, water allotments, contract units, permits,
easements and rights-of-way, and irrigation equipment
DEALING WITH UNENCUMBERED WATER RIGHTS
Provisions when a portion of water right(s) beneficially used on the
encumbered land is encumbered and another portion reserved by the
landowner
Description of the portion of the water right(s) reserved (see above for
detail)
Agreement on where and how the landowner may use the reserved
water right in order to avoid an illegal expansion of historical use
Agreement on how water right will be shared in times of shortage (the
conservation organization will generally want priority)
Provisions concerning a water right(s) that is beneficially used on the
encumbered land but not encumbered by the deed (recommended, but
deed could be silent)
Statement that the water right(s) beneficially used on the encumbered
land is not necessary to encumber to protect the conservation values
Description of the water right(s) not encumbered (see above for detail)
Statement that inclusion of water rights complies with state statutory
requirements
PERMITTED USES OF ENCUMBERED WATER RIGHTS
Paramount right of landowner to continue historical uses
Right of landowner to maintain, repair and reconstruct any existing water
facilities unless the conservation values would be irreversibly damaged, as
determined by the conservation organization in its sole judgment
Temporary or permanent change of water rights to other conservation
purposes
Irrigation of other conservation lands
Enhancement of instream flows or littoral levels
Maintenance of wetlands and/or riparian areas for wildlife
Other conservation purposes
RESTRICTIONS ON USE OF ENCUMBERED WATER RIGHTS
Prohibited actions, absent the consent of the conservation organization
following its determination that such change will not be inconsistent with
the permitted uses or the protection of the conservation values:
Changing water right(s) to any new uses, including but not limited to
municipal, industrial, or commercial
Changing water right(s) for use off the encumbered land
Selling, leasing, transferring or encumbering water rights separate
from the encumbered land
Separating water rights from encumbered land
Changing point of diversion or type or place of use
Restrictions on land and water development, for example, draining
wetlands or inundating irrigated pasture, that would injure conservation
values, without prior written approval of conservation organization
Waiver by landowner to use, change or transfer all or any part of the water
right(s) other than as provided in conservation easement, without express
written consent of conservation organization
PROTECTION OF ENCUMBERED WATER RIGHTS
Obligation of landowner to continue historical use of water rights and not
abandon/forfeit water rights by action or inaction
Monitoring
Obligation of landowner to provide conservation organization with an
annual written or oral report, including any reports provided state
water officials, of water diversions and evidence of use, such as crop
reports
Obligation of landowner to provide conservation organization with all
notices concerning water right(s), including a notice of
abandonment/forfeiture, from state water officials
Avoiding abandonment/forfeiture of water right(s)
Obligation of conservation organization to give notice to landowner
and opportunity to cure any threat of abandonment/forfeiture
Right of conservation organization to enter property and continue
historical use of water right(s) to prevent abandonment/forfeiture
Right of conservation organization to attempt to administratively
prevent abandonment/forfeiture
Right of conservation organization to change water right(s) to another
conservation use, including related sale or transfer of such water
right(s)
Obligation of landowner to cooperate with conservation organization
to prevent abandonment/forfeiture
Does stewardship endowment take into account the possibility that the
landowner (or successor) may not maintain historical use?
Does stewardship endowment take into account the possibility that the
conservation organization may incur substantial costs in preventing
abandonment/forfeiture?
RECORDATION OF ENCUMBRANCE ON WATER RIGHTS
Deed of conservation easement should be recorded in every jurisdiction
where a water right is exercised, for example, the ditch headgate
(diversion point) could be in a different county than the place of use
Obligation of water right(s) owner to submit any stock certificate(s) to
appropriate ditch, reservoir, and/or irrigation company for notation of
encumbrance