House Bill 26-1340, Clarifies Revegetation Requirements and Accountability
- Anne Boswell Taylor
- 3 minutes ago
- 6 min read
~Norman L. Kincaide, Ph.D.
After the Pledge of Allegiance, Lower Arkansas Water Conservancy District came to order at 10:30 A.M. May 20, 2026. After a quorum was established, the board recessed to the Enterprise meeting, approved routine items then adjourned. The regular board meeting reconvened. Visitors were introduced and routine items were approved. There were no committee or legal reports.
Under General Manager’s Reports, Alli Schuch, Executive Director, Fountain Creek Watershed District (FCWD), gave a presentation on the In-Lieu Fee Program. Fountain Creek Watershed District celebrated seventeen years of district impact, improvements and inspiration, during which there were more than 25 watershed studies, plans and master plans. The District undertook twelve large scale creek restoration projects, while engaging in region collaboration, robust outreach and educational programs. A new Watershed Warrior volunteer program has just been initiated.
Major funding of $50 million came from the Southern Delivery System for capital construction, of which $10 million remains to be spent. This does not include maintaining these construction projects. There are member government annual contributions for the district general fund, grants and a sponsorship program. There is still no dedicated sustainable funding. The district has initiated a Watershed Warrior volunteer program that promotes residential raingardens and the sale of rain barrels. These measures reduce the amount of runoff from residential areas. Monetary Mitigation Funds projects resulted in $40 million spent on restoration projects to date.
For the future, the District must spend down the remaining $10 million, scale maintenance, develop a long-term vision, gain member government support, and find a source of sustainable funding. For the Monetary Mitigation Fund footprint and 1041 permit conditions are for one or more new projects in the Fountain Creek Watershed between Colorado Springs and the Arkansas River confluence in Pueblo that create a significant and not merely an incidental benefit to Fountain Creek within Pueblo County. Which are for improvement of water quality, flood control, erosion and sedimentation prevention.
The In-Lieu Fee Program involves the restoration, establishment, enhancement, and/or preservation of aquatic resources through funds paid to a governmental or non-profit natural resources management entity to satisfy compensatory mitigation requirements for Department of the Army permits. In-Lieu Fee (ILF) mitigation is used to compensate for environmental impacts, particularly to wetlands and aquatic resources. It allows permittees to pay a fee to a third party instead of conducting their own mitigation projects. This approach is governed by regulations under the Clean Water Act.
Mitigation is required when unavoidable impacts fall upon regulated resources (wetlands, streams and species). These fall under the Clean Water Act, Endangered Species Act, and Colorado Regulation 87. There are three types of mitigation. Permittee Responsible Mitigation (PRM) involves an individual project mitigation at one location. Here restoration is done in parallel to impacts, that is conducting environmental repair or recovery activities at the same time a project or disaster is causing damage. The permittee develops perpetual liability.
Mitigation Bank is multiple project mitigation at one location, wherein restoration is pre-impact. A third-party entrepreneur develops the plan with severance of liability, which is relatively new within the last five years.
 In Lieu of Fee involves multiple project mitigation at multiple locations, wherein the restoration is post-impact. In Lieu of Fee sponsor funds restoration out of collected fees with severance of liability, which is a new concept. Participation in the ILF program is voluntary. PRM can be costly and time consuming, whereas ILF offers a streamlined solution to federal and state environmental permits. Simply pay to mitigate and watch your dollars restore and build watershed resiliency. The ILF provides mitigation credits for unavoidable impacts to wetlands, streams and species. Impact Mitigation credit ratios are: 1:1.25 for wetlands and streams and 1:3 for species. ILF funds restoration out of collected fees paid to FCWD by permittees, not assessed through fees, taxes and grants.
One recent project was the Overton Road washout, which involved 1700 feet, was constructed between 2019-2020 at a cost of $1 million. This involved floodplain constriction with bridge abutments left in place. The goal was to stop lateral migration and erosion, armor the banks, remove bridge abutments and road embankments, and restore native riparian vegetation. Another project was Eagleridge, Pueblo, involving 5,000 feet. This was constructed in 2025 at a cost of $4.4 million, which was complicated by the removal of a homeless camp. The goals here were to reduce erosion and tie into the upper end of the Highway 47 project.
Blake Osborn gave an update on Rule 10 by summarizing the return flows to the Arkansas River according to flood or sprinkler irrigation and the differences between return flows before improvement and after improvement. Slides were shown indicating the number of acres under flood and sprinkler irrigation and the number of new sprinklers from 2013 through 2026. Osborn said that Kansas continues to focus on pond seepage as it concerns return flow to the Arkansas River. Studies on this issue have been well founded and do not indicate seepage to be that severe an impact on return flows.
Jack Goble, General Manager of Lower Ark, provided an overview of the passage of House Bill 26-1340, Reclamation of Formerly Irrigated Land. There was a precipitous decline in irrigated from land in Bent (44%), Crowley (92%), Otero (44%), Prowers (33%) and Pueblo (56%) Counties from 1978 to 2022, totaling 120,000 acres. An Arkansas River Basin Dry-up Study, funded by the Colorado Water Conservation Board in 2021, was undertaken by conducted by experts with extensive experience. They conducted evidence-based review of water transfer cases in Division 2. These were Booth-Orchard to Pueblo, Colorado Canal to Colorado Springs and Aurora, Rocky Ford Ditch I & II to Aurora, Fort Lyon Canal to Colorado Beef, Hayden Ranch to Security Water, Hill Ranch to Pueblo West, Highland Canal to Lower Arkansas Water Management Authority, Amity Ditch to Tri-State, and Bessemer Ditch to Pueblo.
The research process reviewed change case decree requirements, conducted field assessments of lands, and interview associated entities. The questions considered were: Who was responsible for reclamation? Were standards created and used? Was weed management included? Was there appropriate oversight and accountability? Was there adequate access to lands for reclamation? Were invasive species controlled? Was dry land farming allowed or successful? And, was there a maintenance program to sustain success?
This inquiry, completed in April 2023, determined what worked and what didn’t and developed recommended terms and conditions needed for successful land reclamation. The main purpose of HB 26-1340 is to ensure that irrigated farmland that will have its water permanently removed for other uses is either successfully revegetated or converted to dry land farming. This bill applies only to Water Division 2, where water is permanently removed from land and the water right’s decreed use is changed from irrigation to other uses on or after January 1, 2027. The water right owner shall comply with the following requirements to be adopted by the water court in the new decree:
Adopt site specific criteria and associated scientific and objective evaluation methodology to determine revegetation or dry land farming. The water right owner must use the local county’s criteria if adopted, in an associated 1041 Permit or inter- governmental agreement.
The water court shall appoint a neutral third-party revegetation or dry land farming expert to conduct annual field reviews and write status reports to determine success and compliance with the adopted criteria (paid for by the water rights owner). Parties to the court case can comment or rebut. The court may impose additional, time-limited oversight periods for successfully reclaimed fields that present a substantial risk that reclamation will regress.
Three pathways incentivize compliance. Provide financial assurances, such as a bond or other security to the local land use authority. Link the amount of water available to the new uses to the amount of land successfully reclaimed, while still allowing all of the water to be used for existing uses. If the water right owner has obtained a 1041 Permit or IGA that requires financial assurances that will pay for revegetation or links to the amount of water available for new uses to the amount of land to be successfully reclaimed, those requirements shall be adopted by the water court decree. The practical issue with reclamation is that it may cost up to $1000 per acre, ultimately costing more than what the land is worth upon revegetation.
This bill sets clear expectations, creates accountability, provides flexibility for compliance and helps protect the land, neighboring land owners, and rural communities left behind when the water leaves. The bill sponsors are Rep. Ty Winter, Rep. Tisha Mauro, Senator Rod Pelton and Senator Nick Hinrichsen. Major proponents were Otero County, Bent County, Chaffee County, Fremont County, Northern Water, Water Rights Association of the South Platte and Colorado Department of Natural Resources. This was a team effort which included: Gerry Knapp, LAVWCD Revegetation Consultant, Katherine Carter, Special Counsel, Peter Nichols, Special Counsel, Brett Moore, Lobbyist, Sol Malick, Lobbyist, and Jack Goble, General Manager, LAVWCD. House Bill 26-1340 is now ready for the Governor’s signature.
The board adjourned to executive session to consider Aurora water purchases. Regular board meeting adjourned.